Troubled Times Continue For Boeing and Their 787 Aircraft
Boeing’s situation seems to be only getting worse. Following recent crashes and mechanical hiccups that have left many airlines and various state governments questioning the manufacturer’s planes, it appears that the American aircraft manufacturer might be forced to cut the production of it’s 787 wide twin-isle Dreamliner.
The news of a possible revision of the 787's production rate first emerged early in the year. Citing some leaked documents, the Post and Courier, for instance, reported on August 4th that a few 787 Dreamliner recipients had raised production quality issues. Apparently, the likes of KLM Royal Dutch, Eva Air, Singapore Airlines, and Etihad had called Boeing to point out production loopholes and poor quality.
It has since emerged that managers are pushing employees to finish work quickly to avoid delays, which could be the primary cause of quality issues. Boeing is behind schedule on several deliveries.
Falling Aircraft Parts
The quality issues got more serious in the last few months. In mid-August, for example, A Norwegian Boeing 787 bound for Los Angeles had to return to Rome after encountering a technical problem shortly after takeoff.
While airborne, small fragments of the aircraft started falling around the Isola Sacra neighborhood. One Italian newspaper described the scene on the ground as “a rain of incandescent debris.” The falling debris damaged several cars and houses, with one victim reporting mild burns. None of the 289 passengers on board was injured though.
A spokesperson of the Norwegian airlines later told Euronews that the incident was caused by “technical failure of one of the engines.”
Fresh Trouble Thanks To US-China Trade Wars
As if the technical and mechanical issues with their aircraft aren’t enough, Boeing is now also likely to pay the price for the trade wars between the US and China.
Speaking on Wednesday, the 24th October during the company’s third-quarter earnings call, Boeing’s new CEO Dennis Muilenburg revealed that the severed trade ties between the two countries had depressed the company’s order outlook. This comes despite recent claims by US President Donald Trump that there was $20 billion worth of unfinished aviation business between China and Boeing.
It’s worth noting that there have been positive talks on the trade issues between the two countries. However, a truce is yet to be reached, and the situation will directly affect Boeing. To be specific, Boeing will be forced to cut the production rate of the 787.
Boeing recently reported that “Given the current global trade environment, the production rate of 787 aircraft will be reduced to 12 from 14 aircraft per month for approximately two years, starting late 2020.”
Muilenberg confirmed the revised production projections during the third-quarter earnings call, saying Boeing must be disciplined to remain profitable.
“There’s mutual interest that we continue to see,” he said. “The recent discussions have been positive; they’re moving in the right direction. But, for the sake of our company, we must remain disciplined with our production rate management.”
Boeing had raised the projected 787 production numbers in anticipation of orders from China. However, Trump’s administration’s trade wars with China resulted in those orders being frozen in 2017.
It’s a Wait and See
In the end, we’ll have to wait and see how Boeing navigates the turbulent waters. Given that they’re also having problems with the 777-9 and were earlier in the year forced to cut production rates for the 737 amid safety concerns, it promises to be an interesting few years ahead for the American aerospace giant.