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Boeing halts deliveries of 787s again, works on fix

by SIDDHARTH PHILIP BLOOMBERG NEWS | May 29, 2021 at 1:46 a.m.
A Boeing 787-9 Dreamliner aircraft at the Farnborough International Airshow in Farnborough, U.K., on July 14, 2014. MUST CREDIT: Bloomberg photo by Simon Dawson.

Boeing has halted deliveries of its 787 Dreamliner, just two months after restarting them, as the company works to get regulatory approval for its plan to resolve previously disclosed quality issues.

The plane-maker is providing the U.S. Federal Aviation Administration with added analysis and documentation of proposed fixes for undelivered jets, according to a company statement Friday. The latest setback follows a five-month delivery hiatus that ended in March, caused by potential manufacturing flaws in the carbon-fiber shell of Boeing's most advanced aircraft.

"Boeing still needs to show that its proposed inspection method would meet FAA's federal safety regulations," the regulator said in an email. Because the FAA hadn't approved Boeing's proposed system of compliance, the company chose to suspend shipments of the plane, the agency said.

The new interruption to a key source of cash deals Boeing yet another blow tied to manufacturing lapses in its marquee jets. Shortly after the company resumed Dreamliner shipments this year, it ordered 737 Max planes to stop flying because of a potential electrical fault. While Max deliveries began again this month, the glitch marred the model's return from a 20-month worldwide grounding after two deadly crashes.

Boeing shares slipped 1.5% in New York, the biggest drop on the Dow Jones Industrial Average. Boeing had advanced 17% this year through Thursday amid rising optimism for a recovery in aviation as vaccination rates for covid-19 rise across the globe.

Boeing said there would be no impact on planes that are in service.

Regulators have sought more information on fixes Boeing has proposed for the potential Dreamliner faults, a person familiar with the matter said. The issues that led to the latest halt aren't new and don't affect flight safety, the person said.

Last year, Boeing discovered tiny dimples in the inner lining where the 787's carbon-fiber fuselage barrels are fused to form the jet's frame.

Boeing said in late April that it had about 100 Dreamliners in inventory and expected to clear most of those by year-end. At the time, Chief Executive Officer Dave Calhoun said he expected to deliver about a dozen of the twin-aisle aircraft monthly. That schedule could be at risk the longer the talks with the FAA drag on, crimping Boeing's ability to meet its cash-flow goals.

The Chicago-based company has struggled to get past a series of missteps that have led to heightened regulatory scrutiny. This week, Boeing agreed to pay at least $17 million to settle U.S. enforcement cases about the installation of unapproved equipment on hundreds of single-aisle 737 jets.

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