The Federal Aviation Administration said Monday that it is satisfied with the changes Boeing Co. has made to address the production problems that halted deliveries of its 787 Dreamliner, clearing the way for the company to resume handing over the jets, all now built in North Charleston, “in the coming days.”
“Boeing has made the necessary changes to ensure that the 787 Dreamliner meets all certification standards,” the FAA said in a statement, according to CNBC. “The FAA will inspect each aircraft before an airworthiness certificate is issued and cleared for delivery.”
The announcement confirmed reports late last month. Reuters reported July 29, citing two people briefed on the matter, that the FAA had approved Boeing’s inspection and modification plan for resuming deliveries. A person familiar with the situation told The Post and Courier at the time that the report was accurate but stressed that the approval was one step in a process.
FAA acting Administrator Billy Nolen visited Boeing’s 787 factory in South Carolina on Thursday and met with FAA safety inspectors about steps to improve production quality, the agency said, according to CNBC. Nolen wanted to hear about the steps Boeing has taken to fix manufacturing problems and ensure independence for Boeing employees who work with regulators, the FAA said, according to The Associated Press.
“We continue to work transparently with the FAA and our customers towards resuming 787 deliveries,” Boeing said in a statement.
A long pause
The FAA has not allowed Boeing to hand over a 787 since May 2021, The Post and Courier reported. Boeing had resumed deliveries in March 2021 after a five-month halt, then stopped again, Reuters reported.
Production of the 787 has been marred by several problems, including gaps between the carbon-composite panels of the fuselage and unapproved titanium parts from a supplier in Italy, the AP reported. The fuselage gaps were first found in 2020 and led to inspections that turned up problems with a pressurization bulkhead at the front of the plane, according to the AP.
In February, the FAA said it would keep the authority to issue airworthiness certificates for new 787s until it is confident “Boeing’s quality control and manufacturing processes consistently produce 787s that meet FAA design standards,” Reuters reported.
The delays have been costly. Boeing disclosed in January a $3.5 billion charge tied to 787 delivery delays and customer concessions, plus $1 billion in abnormal production costs from the flaws and the related inspections and repairs, according to Reuters.
What it means for North Charleston
Boeing consolidated 787 production at its North Charleston campus in early 2021, The Post and Courier has reported. While deliveries were frozen, the plant slowed to about one jet every four weeks, The Post and Courier reported. The rate is expected to climb to as many as five a month once deliveries resume.
Boeing is “producing at very low rates and we’ll continue to do so until deliveries resume, gradually returning to 5 airplanes per month over time,” Chief Financial Officer Brian West told investors last month, according to Reuters.
About 120 completed 787s, worth more than $25 billion at list prices, are parked around the country waiting for customers, The Post and Courier reported. The jets were built at factories in Washington state and South Carolina, and each one will need to be cleared by the FAA, the AP reported.
Morgan Stanley analyst Kristine Liwag estimated that the 120 waiting Dreamliners could bring in $17 billion in revenue after discounts, The Post and Courier reported. She predicted Boeing would deliver about 20 of the widebodies through December, 66 in 2023 and 110 in 2024.
“This is a major milestone for the business and unlocks another lever of free cash flow generation,” Liwag wrote, according to the newspaper.
Boeing CEO Dave Calhoun said on the company’s quarterly earnings call July 27 that the 787 work was nearly done. “We track all the work and the issues that this team has wrestled with, and we are approaching closure on all of that,” he said, according to The Post and Courier.
First in line
American Airlines, which has more than 40 of the planes on order, expects to receive a 787 as early as Wednesday, CNBC reported. The airline said on a July earnings call that it expects nine 787s this year, Reuters reported.
Boeing collects a large share of each plane’s price at delivery, so restarting handovers would be a boost for the company, the AP reported. The 787 lists at $248 million to $338 million depending on size, though airlines pay far less, according to the AP.
