Another Humilation for Boeing

According to Reuters:

The delay, while short, is another missed date for the 787 program which was delayed for nearly 3-1/2 years to address quality problems with the jet that uses substantial amounts of lightweight composite materials to replace aluminum in the fuselage and wings.

At the heart of Boeing’s new marketing campaign is a list of advantages of its 787, the same plane that as suffered a seemingly infinite number of delays.

The 787 Dreamliner will use 20% less fuel on comparable missions than other airlines in its class.

Boeing’s marketing staff has avoided the mention of other 787 troubles, which is why the call it a marketing campaign. It puts Boeing in the best light possible while avoiding its flaws. Boeing hopes that as it trumpets its track record of innovation, that the 787 delays will melt away, at least as far as customers and investors are concerned.

United Airlines is not the only one that has had to wait for the new plane. The list includes Air India, China Southern Airlines, Japan Airlines and Qantas, at least. Bloomberg reported that:

Qantas will get $433 million from Boeing, including more than $300 million compensation for 787 delays and a refund of deposits for the canceled order, Chief Financial Official Gareth Evans said today at a press briefing.

So, shareholders have suffered as well. It is part of a pattern that has many of those who hold Boeing shares underwater. Over the past five years, Boeing’s stock is off about 25% while the S&P has dipped less than 5%.

The 787 Dreamliner saga will be remembered as one of the greatest debacles in the history of modern manufacturing. But the jet gets more miles per gallon that much of its competition, and the people who built it are smart, according to Boeing. Except when on-time arrival is at stake.

Douglas A. McIntyre