A Price Tag on Boeing’s Bad News Bears

A $5 billion revenue write-off is the worst-case scenario predicted by Jefferies & Co. analyst Howard Rubel. This is the scenario where Boeing (NYSE:BA) is forced to fundamentally alter the design of the 787 Dreamliner as a result of the ongoing global investigation into what caused a series of battery mishaps on the new aircraft.

But the odds of such a tremendous write-off are small, just 4 percent according to Rubel. Bloomberg reports that most analysts, experts, and observers expect the loss to be much smaller, on the order of a few hundred million dollars. The total impact will be the sum of a dozen separate costs, ranging from repairs, replacement, and redesign to possible compensation for carriers like United Air Lines (NYSE:UAL), which have had their fleets of new 787s grounded as a result of the investigation.

The systemic impact of the probe is hard to estimate, but it feels safe to call it enormous. The downside to carriers exceeds the costs of simply keeping planes on the ground. Airlines will have to curb their expansion plans and delay initiatives to open up new routes. As the carriers with the largest 787 fleets, All Nippon Airways and Japan Airlines are particularly hard hit, forced to keep a combined 24 aircraft on the ground until the investigation is finished…