How Many More Problems Before the Boeing 787 Dreamliner Is Grounded?

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By Douglas A. McIntyre Published
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The media is on the cusp of predictions about how many more flaws found by government agencies or large airlines it will take to ground the Boeing Co. (NYSE: BA) 787 Dreamliner fleet.

The New York Times reports that:

[A] pair of embarrassing problems last week revived concerns about the reliability of the plane, the first commercial aircraft to make extensive use of lightweight carbon composites that promise big fuel savings for airlines.

And from Reuters:

Improperly assembled parts in Boeing’s newest jet could cause the planes to run out of fuel, experience “engine power loss or shutdown, or leaks on hot engine parts that could lead to a fire,” the U.S. Federal Aviation Administration said in issuing a formal rule requiring U.S. carriers to inspect the fuel systems.

It might not take more than one serious fire or fuel problem to force Boeing to ground the entire 787 fleet. Boeing continues to insist that the problems with the plane are minor. But if the trouble reaches the severe end of the spectrum, Boeing’s management could well be wrong. The media may only be using hyperbole about the plane to garner readers or viewers. However, Boeing faces the prospect that the opinion of engineers and government experts could entirely offset many of the positive assessments of the aircraft both by carriers and passengers.

Boeing is fortunate that, so far, the engineering problems with the 787 have been modest ones. And Boeing has been quick to acknowledge them and to suggest repairs. Some of the troubles with the 787 cannot be laid at Boeing’s feet. There have been issues with the GEnx engine. However, ultimately, it does not matter whether General Electric Co. (NYSE: GE) is the guilty party. Future failures of the engine could have an effect similar to failures by Boeing. A plane judged as dangerous would be the target of regulators, no matter what the cause.

A grounding of the 787 fleet has some precedent. As the Seattle Times pointed out in June,

Boeing has temporarily grounded its 787 Dreamliner flight-test fleet while it checks for an assembly flaw in the horizontal tails built by Italian manufacturing partner Alenia

Also in June:

All Nippon Airways has grounded three Boeing 787 Dreamliners because of problems with the aircraft’s engines.

The ANA trouble was cause by issues with Rolls-Royce Trent 1000 engines.

Once again, the origin of any future crippling flaws do not have to originate from Boeing’s work. The risks, at this point, continue to compound fairly regularly, regardless of the source.

Douglas A. McIntyre

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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