Boeing’s in the Spotlight: Any Cause for Concern?
“In light of a series of recent events, the FAA will conduct a comprehensive review of the Boeing 787 critical systems, including the design, manufacture and assembly,” reported the Federal Aviation Administration in a statement on Friday. “The purpose of the review is to validate the work conducted during the certification process and further ensure that the aircraft meets the FAA’s high level of safety.”
The aircraft in question, of course, is Boeing’s (NYSE:BA) 787 Dreamliner. For those in the dark, the Dreamliner is widely seen as a huge step forward in the evolution of aircraft. The plane is composed of light-weight composite materials and is built using advanced manufacturing practices that not only eliminate inefficiencies, but make the plane stronger — supposedly. The aircraft is up to 20 percent more fuel efficient than comparable models.
But a series of unfortunate events has plagued the aircraft. What began as regular growing pains has turned into an investigation by the FAA, as five separate incidents in the past week alone have either grounded Dreamliner flights or otherwise raised alarms. Mishaps this week include: a battery fire, a fuel leak, brake issues, a cracked cockpit windshield, and an oil leak.
Boeing’s status as a leading aerospace company and Dow component, and the fact that the Dreamliner is in many ways a flagship aircraft, has brought the heat of the spotlight on the company, the aircraft, and the FAA. One glance at the stock chart and you can see market psychology at work.