Boeing just sold hundreds of Dreamliners — now it just needs to figure out how to consistently deliver them

Boeing 787 factory tour.
Boeing can once again delivery its 787 Dreamliner jet after pausing deliveries for the third time in three years.Taylor Rains/Insider
  • The Federal Aviation Administration gave Boeing the go-ahead to resume deliveries of its Dreamliner aircraft.

  • Deliveries were paused for a third time in three years in January due to an "analysis error."

  • Travel analyst Henry Harteveldt said the 787's recent delivery delays may push airlines to consider a competing jet.

On March 10, the Federal Aviation Administration gave Boeing the green light to resume deliveries of its hot-selling Boeing 787 Dreamliner, which was paused for the third time in three years on January 26.

The weeks-long delivery pause was due to an "analysis error by [a] supplier" related to a fuselage component, Reuters reported, but Boeing said the issue wasn't a safety threat.

This is not the first time Boeing has had to stop 787 deliveries. Production flaws started in 2019 when company engineers identified paper-thin gaps in the aircraft's fuselage, forcing the grounding of eight Dreamliners.

The issue swelled into an FAA investigation that led to a temporary delivery pause in October 2020. It wasn't until the end of March 2021 that deliveries resumed, and Boeing sent off a total of 14 by May 2021.

But, further production issues and new concerns over the jet's inspection method forced the FAA to halt deliveries again —  a pause that stretched 15 months until August 2022. A total of 120 jets worth a collective $25 billion couldn't be delivered, per the Wall Street Journal.

Henry Harteveldt, travel analyst and president of Atmosphere Research Group, told Insider the inconsistency raises concerns about Boeing's ability to deliver aircraft on time — and could push airlines to consider a competing plane instead, like the Airbus A350.

"When a delay is short, airlines learn to deal with that," he said. "But, when the delay stretches many months, airlines are impacted because they build their schedules and business plans around expected deliveries of aircraft."

American Airlines, in particular, announced on Friday it has to cut its upcoming Philadelphia to Madrid route due to the absence of needed 787s, the Wall Street Journal reported. The airline was forced to cut some international flights for the same reason last year.

Despite the latest pause, Boeing said it didn't "anticipate a change to our production and delivery outlook for the year."

Dreamliner orders are piling up

In the past four months alone, the planemaker has received about 200 orders for Dreamliner aircraft, including 100 from United Airlines, 20 from Air India, and 78 from two Saudi Arabian carriers in a deal worth $37 billion.

Boeing CEO Dave Calhoun told Reuters in mid-March that the demand for 787s is the "biggest I've ever seen," with the company telling Insider it expects to deliver 70-80 Dreamliners in 2023.

Harteveldt told Insider the Boeing 787 is favorable due to its fuel efficiency, versatility, and passenger comfort.

"The 787 comes literally in three sizes: small, medium, and large, and is capable of operating even ultra-long-haul flights," he said.

With the order book filling up, Boeing has plans to increase production to 10 jets per month by 2026 while simultaneously managing potential supply chain issues. The production rate is currently less than a third of that.

Boeing told Insider it will "continue to produce at a slow rate as we increase back to five per month."

Harteveldt said Boeing needs enough factory space, employees, and supplies to significantly increase output, but outside factors could bottleneck production.

"In the case of the 787, you've got components coming in from many countries around the world," he told Insider. "So it's not just Boeing doing the work, but also dozens, maybe hundreds, of contractors and subcontractors who are involved."

Richard Aboulafia, managing director of aviation consulting firm AeroDynamic Advisory, told Insider the FAA's strict response to the Dreamliner issues goes back to the 737 MAX tragedies of 2018 and 2019, which killed 346 people and led to a worldwide grounding of the plane.

Historically, the FAA allowed Boeing to self-certify its own aircraft under agency oversight, including the flawed system that caused both MAX crashes. The FAA has since taken over the responsibility of determining if a new individual MAX or Dreamliner jet is airworthy.

"The FAA fell under a great deal of scrutiny, not only in the US but also from international regulators," Aboulafia said. "Reciprocity was hanging on by a thread, so the agency felt a need to get their way back by applying more oversight."

Read the original article on Business Insider