Market Overview

Boeing Faces Wider Federal Probe Over Dreamliner Jets Failing To Meet Company's Own Benchmarks

Boeing Faces Wider Federal Probe Over Dreamliner Jets Failing To Meet Company's Own Benchmarks

The Boeing Co (NYSE: BA) is under scrutiny from the United States Federal Aviation Administration due to production problems at its 787 Dreamliner factory, the Wall Street Journal reported Monday.

What Happened: The review by the federal regulators extends back to almost a decade and pertains to non-adherence to the aerospace company’s own design and manufacturing benchmarks, according to an internal FAA memo seen by the Journal.

The Dreamliner’s rear fuselage reportedly fell short of engineering standards and the FAA is mulling mandatory inspections that could span 900 out of the 1,000 such planes rolled out since 2011.

Recently discovered additional lapses in production led to the grounding in August of eight Dreamliners, which are currently being repaired, the Journal reported.

Why It Matters: Boeing has notified airlines that fly Dreamliners, including United Airlines Holdings Inc (NASDAQ: UAL) and several other international carriers, about the units that need immediate repairs, according to the Journal. 

Escalated safety inspections and repairs could reportedly disrupt airline maintenance and flight schedules. The safety defect doesn't pose an immediate danger to Dreamliners, people familiar with the matter told the Journal.

Boeing's 737 MAX aircraft line remains grounded after two fatal crashes last year that claimed the lives of hundreds. FAA is said to be in the final stages of approving the aircraft to be back in the air again, and the Chicago-based company received its first order to supply two 737 MAX planes last month.

Price Action: Boeing shares closed 1.35% higher at $171.05 on Friday and traded 0.12% lower in the after-hours session.

Photo by Anna Zvereva via Wikimedia


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