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Boeing delivery slowdown adds to buyers' ire

by JULIE JOHNSSON AND ALAN LEVIN BLOOMBERG NEWS (WPNS) | November 25, 2021 at 1:44 a.m.

Frustration is mounting for customers waiting to take new Boeing 787 Dreamliners -- planes caught in a regulatory and production quagmire that has halted all but a few deliveries since October 2020.

The popular wide-body jets will be needed to carry travelers across oceans as borders sealed shut by the covid-19 pandemic start to reopen. But airlines and lessors trying to plan for the expected rush of travelers don't know when their Dreamliners will arrive -- only that it won't be this year, as Boeing executives once said.

"The story line from Seattle has been manana, manana, manana," Steven Udvar-Hazy, chairman and co-founder of Los Angeles-based Air Lease Corp., said of Boeing's commercial division, which is based in Washington. "In July they said, 'Oh, by August we'll be fine.' Then in August it was September. We have 11 aircraft that are ready and we can't get them delivered."

More than 100 Dreamliners are stuck at Boeing, tying up inventory worth about $20 billion by Air Lease's calculation and hampering the plane maker's financial turnaround and efforts to pay down its $62 billion debt.

Boeing is working to find and repair tiny structural imperfections about the width of a piece of paper in the carbon-fiber aircraft while addressing quality lapses among suppliers and their subcontractors. Both issues came to light as the Chicago-based plane maker did a deep dive in its factories and production system in the wake of two fatal crashes of its 737 Max.

"We are conducting inspections and rework and continue to engage in detailed, transparent discussions with our regulators, customers and suppliers," Boeing said in an emailed statement. "We know this important work has impacted our deliveries. While we never want to disappoint or cause delays for our customers, quality and safety always come first. These actions are essential to bolstering the long term health of the program and are preparing us for sustained growth and success as market demand returns."

A Boeing spokesman wouldn't confirm a Wall Street Journal report Friday that deliveries aren't likely to restart until February or March. Company executives avoided any discussion of when the handovers might resume during an October earnings call, saying the timing would be determined by the U.S. Federal Aviation Administration and customers. In July, they had sounded upbeat while saying fewer than 50 Dreamliners would be delivered this year.

For each manufacturing glitch that strays from its design specifications, Boeing has to file a so-called notice of escapement with the FAA that evaluates the problem, recommends a fix and provides an engineering analysis to back up its finding.

The company is still working through those notices, along with a broader inspection regimen for the 787, according to people familiar with the situation.

There are about 20 locations on Dreamliners where potential quality breaches have been identified, said one of the people, who asked not to be identified discussing a confidential matter. At a Boeing fabrication plant in South Carolina, for example, mechanics are inspecting the area surrounding doors at the rear of the aircraft for tiny gaps, one of the people said. Dreamliners continue to roll off the line in North Charleston at a slow rate of two planes a month, the person said.

Conducting the inspections can be time consuming and costly since, in some areas of the plane, workers have to tear out passenger cabins to gain access. Since not every Dreamliner has every flaw, Boeing has proposed creating a methodology to narrow the checks based on its own analysis and past inspections.

The plane maker had initially requested permission to inspect a handful of planes and, if they passed, use its regimen for the rest of the undelivered aircraft, the people said. The FAA rejected that plan, and company and the regulator haven't yet agreed on an appropriate level of inspections, said one of the people.

Print Headline: Boeing delivery slowdown adds to buyers' ire

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