Boeing resumes deliveries of 787 Dreamliners

Boeing Co (BA.N ) resumed
deliveries of its high-tech 787
Dreamliner jet on Tuesday, ending a
period of nearly four months in which it
was unable to provide new planes to
customers because of safety concerns
about the battery system.
The delivery of the first jet with a redesigned
battery system marks a turning point in
Boeing's 787 crisis, allowing the jet maker to
book revenue for completed sales of the jet,
which costs $207 million at list prices.
Boeing shares rose 1.4 percent to close at
$96.11 on the New York Stock Exchange,
their highest levels since November 2007.
Resuming deliveries will lower Boeing's profit
margin in the near-term, though. The 787s
being delivered now are among the relatively
early jets that are more costly to make and
that were sold at steep discounts to attract
customers.
Boeing has never given a final cost estimate
for the 787's grounding and repairs, though it
absorbed nearly all of the impact in the first
quarter while still posting a rise in profit.
Some analysts have projected a final cost of
as much as $600 million.
The deliveries will improve Boeing's cash
flow this year, however, and will reduce its
inventory, something investors have been
anticipating as they bid up its stock.
Boeing said it delivered a new Dreamliner to
All Nippon Airways ( 9202.T ) on Tuesday, its
second delivery of the year. The first was
delivered before January 16, when regulators
grounded the worldwide Dreamliner fleet after
two lithium-ion batteries overheated and
smoked on two separate jets that month.
Boeing also reaffirmed Tuesday that it
expects to hit its target of delivering more
than 60 787s this year.
Analysts say the target should be easy to hit.
Boeing kept making Dreamliners while the
plane was grounded, so about 25 are parked
outside its factories waiting to be delivered to
customers, the company said.
Boeing also has sped up production. Last
week it rolled out the first 787 made at the
new rate of seven per month, up from five
per month previously. It aims to raise the
rate to 10 per month by year-end, with the
first delivery at the new rate in 2014.
BATTERY REDESIGN
After the two incidents in January, Boeing
redesigned the 787 battery system, adding a
steel enclosure and other safeguards to
prevent fire.
The Federal Aviation Administration approved
the redesigned system on April 19 and a few
days later cleared Boeing to begin installing
the $500,000 fix on the 50 delivered jets that
had been grounded, and those still at the
factory.
Ethiopian Airlines began carrying customers
on the new jet on April 27. The other seven
airlines that fly the jet have begun working
them into flight schedules, many with service
beginning later this month or in June. United
Airlines( UAL.N ), the first U.S. carrier with the
787, is due to resume service on May 31.
Boeing still faces potential problems with the
new plane, its first all-new jetliner in more
than a decade. [ID:nL2N0DE026] New planes
are typically glitch-prone, and the 787 is no
exception, logging a string of minor mishaps
in the months leading up to the grounding,
ranging from fuel line leaks to brake
problems and a cracked cockpit windscreen.
In addition, the U.S. National Transportation
Safety Board is still investigating what
caused a 787 battery to overheat and catch
fire on a parked Japan Airlines( 9201.T ) plane
in Boston. About a week later, another battery
overheated on an All Nippon flight in Japan,
prompting an emergency landing and
evacuation.
The NTSB investigation, which included
hearings in April, is expected result in
recommendations to the FAA that could alter
certification procedures for aircraft.



Source:reuters