Boeing 787 Dreamliner - New Concerns

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fountainhall

Boeing 787 Dreamliner - New Concerns

Post by fountainhall »

An article in The Observer that has just been loaded on to the newspaper's website has some disturbing information about pilots' concerns over the failure of a safety feature on the 787s. Boeing has issued an alert to airlines operating the aircraft. Worse, it seems, the FAA has admitted the fault presents a "risk to the flying public".
Airline pilots have voiced fears over the safety of a fleet of Boeing aircraft after a crucial fire-fighting system has been found to have the potential to malfunction.

Boeing has issued an alert to airlines using its flagship B787 Dreamliner, warning that the switch used to extinguish an engine fire has failed in a “small number” of instances. The switch also severs the fuel supply and the hydraulic fluid to prevent flames spreading.

UK airlines Tui, British Airways and Virgin Atlantic operate more than 60 Dreamliners between them. The US regulator, the Federal Aviation Administration (FAA), has decided not to ground the fleet, despite admitting a “risk to the flying public”.

Pilots, however, claim that the safety of passengers and crew is being compromised. “If there was an engine fire on a transatlantic flight and the aircraft had one of the defective fire switches, then we would have to fly with a burning wing for up to three hours before we could safely land,” a pilot with a British airline told the Observer.

In its alert to airlines, Boeing warns that long-term heating can cause the fire switch to stick in the locked position so it can’t be used to release the two fire extinguishers in each engine.

The FAA has issued an airworthiness directive, mandatory instructions to air operators, announcing that the problem is “likely to exist or develop in other products of the same design” and that “the potential exists for an airline fire to be uncontrollable”. However, it stopped short of grounding the aircraft and instead ordered airlines to check the switch every 30 days.
A pilot who spoke anonymously to The Observer stated -
“Boeing insists that the risk of an engine fire is very low, and that’s true, but it’s Boeing’s attitude to the risk that has upset us, especially in light of recent B737 Max issues. If the fire switch malfunctions, there’s no manual override to deploy the engine fire extinguishers and therefore no way of putting out a fire, but Boeing says that it’s fine, and the airlines agree. Such is the fear of Boeing’s power that no one dares speak out.”
Yikes!

https://www.theguardian.com/business/20 ... fety-fears
fountainhall

Re: Boeing 787 Dreamliner - New Concerns

Post by fountainhall »

I missed this report from the June 28 issue of The Seattle Times, a newspaper that has clearly got its finger on the pulse at Boeing as it is based close to where Boeing has its main factory. This article is headed

DOJ probe expands beyond Boeing 737 MAX, includes 787 Dreamliner
Federal prosecutors have subpoenaed records from Boeing relating to the production of the 787 Dreamliner in South Carolina, where there have been allegations of shoddy work, according to two sources familiar with the investigation . . .

The 787 subpoena significantly widens the scope of the DOJ’s scrutiny of safety issues at Boeing.

The two sources who revealed the subpoena spoke on condition of anonymity because of the confidential nature of the inquiries.

A third source said a handful of subpoenas were issued in early June to individual employees at Boeing’s 787 Dreamliner production plant in North Charleston, South Carolina.

It wasn’t clear if the subpoena served on the company was issued by the same prosecutors overseeing the 737 MAX investigation. But the third source, also speaking on condition of anonymity because of the confidentiality of the inquiries, said the subpoenas to employees at the South Carolina plant came from the “same group” of prosecutors involved in the 737 MAX investigation, including DOJ trial attorneys Cory Jacobs and Carol Sipperly in the Fraud Section.

Boeing divides its Dreamliner production between the South Carolina assembly plant, which rolled out its first plane in 2012, and the sprawling Everett facility where it has built jets for decades. The 737 MAX is built in Renton . . .

Allegations relating to the 787 Dreamliner have centered on shoddy work and cutting corners at the company’s South Carolina plant.

While there are differences in the 737 and 787 matters, prosecutors are likely looking into whether broad cultural problems run throughout the company, according to the third source and a person in South Carolina, who also spoke on condition of anonymity because of the sensitive nature of the matter.

That could include pressure to sign off on faulty work to avoid delays in delivering planes to customers, the source said . . .

Prosecutors will be looking for any evidence of the “hallmarks of classic fraud” — misrepresentation to federal regulators and customers, one of the sources said, comparing the investigation to the Justice Department’s probe of Volkswagen that led to criminal charges in an emissions scandal.

In 2017, Volkswagen pleaded guilty to three criminal felony counts and agreed to pay a $2.8 billion criminal penalty as a result of the company’s scheme to sell diesel vehicles in the U.S. by cheating on emissions tests mandated by the Environmental Protection Agency and the California Air Resources Board.
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Re: Boeing 787 Dreamliner - New Concerns

Post by Gaybutton »

Profits vs Safety

Why am I not surprised at which one usually wins? Does this have the potential of bankrupting Boeing? I wonder what William Boeing would have to say if he were still alive to know what has been going on and who is responsible for it.
fountainhall

Re: Boeing 787 Dreamliner - New Concerns

Post by fountainhall »

The barrons.com financial and investment site has an article today headed

How Much Boeing Stock Is Worth If the 737 MAX Never Flies Again

It points out that Boeing's stock price has risen 13.7% in the year to date including dividends, only slightly worse than the 18.7% total for the Dow as a whole.
Boeing shares now appear immune to any news about the MAX. The stock took its initial hit after the second fatal crash of a MAX jet in March, which led to a worldwide grounding of the fleet, but has largely been rangebound lately. Before that crash, Boeing stock traded above $420. It closed Tuesday at $362.75.

The stock’s paralysis over the past couple months, however, shows that recent news fails to answer nagging long-term questions about the MAX—questions about pricing, market share, and, ultimately, the viability of the plane . . .

Airplane pricing is a function of performance, and commercial aerospace companies can make up for weaker gas mileage and range, in part, by discounting planes up front. Lower prices would certainly hit Boeing profits, but Boeing would still have a narrow-body product while it redesigned the MAX from the ground up . . .

Baird analyst Peter Arment has suggested that Boeing earns about 1 cent of per-share profit for each MAX jet it ships. That—very roughly—works out to about $5 million per plane. What’s more, 1 cent means Boeing makes about $6 to $7 per share each year based on expected production rates. Wall Street 2021 earnings estimates for Boeing are about $25 a share.

If narrow-body profits were completely wiped out and investors were left with only the defense and wide-body aircraft earnings to justify the stock price, perhaps the stock price could fall to $250 to $300, based on our calculations . . .

One thing Barron’s does know is Boeing’s recent stock price performance demonstrates that investors are waiting. Nothing much will change for the stock until there is clarity about the MAX jet—something that can’t happen until later this year, at the earliest.
All this assumes that there are no long-term issues with the 787 Dreamliner. At present there is no such indication and the plane has been in the air for quite a few years now.
Jun

Re: Boeing 787 Dreamliner - New Concerns

Post by Jun »

fountainhall wrote: Wed Jul 17, 2019 7:59 pm If narrow-body profits were completely wiped out and investors were left with only the defense and wide-body aircraft earnings to justify the stock price, perhaps the stock price could fall to $250 to $300, based on our calculations . . .
The current share price is $367. Exactly 3 years ago, when Boeing had nothing like the current problems, the share price was just under $134.

So despite all the expense on the 737 Max, the unsold aircraft piling up and the litigation risk, the share price is currently about 2.75x that 3 years ago. I don't see a business transformation that justifies that level of movement.

And this analyst reckons it's worth over $300 if they never sell another 737 ?

This may or may not be a great investment, but I shall stop the analysis right there and look for a more obvious bargain.
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