Boeing Dreamliner Deliveries Face New Delays

Boeing Co. BA -1.47% has halted deliveries of its 787 Dreamliners, adding fresh delays for customers following a recent five-month suspension in handing over the aircraft due to production problems, people familiar with the matter said.

Federal air-safety regulators have requested more information about Boeing’s proposed solution to address the previously identified quality lapses, these people said.

The settlement, which involves production problems that took place from 2015 to 2019 with the narrow-body passenger jet, comes as the agency has increased its scrutiny of Boeing’s production and quality controls of other aircraft such as the wide-body Dreamliner, often used on international routes.

As part of the settlement, announced Thursday, Boeing agreed to undertake steps to bolster its internal quality checks. They include assessing whether the manufacturer and its suppliers are ready to safely increase 737 production. It also agreed to allow the FAA to review those assessments—a requirement an FAA official said was rare but not unprecedented when the agency confronts manufacturing problems.

Boeing could face up to another $10 million in deferred penalties if it doesn’t follow through on the settlement terms. The penalty amounts are capped by federal law. Earlier this year, the FAA said Boeing would pay $6.6 million for failing to meet its obligations under a 2015 settlement and to resolve two enforcement cases. Boeing also reached a $2.5 billion settlement with the U.S. Justice Department to resolve a criminal investigation into the 737 MAX’s development.

Problems covered by Boeing’s latest FAA settlement aren’t related to two 737 MAX crashes in late 2018 and early 2019, which claimed 346 lives.

A Boeing spokesman said the company has fully resolved issues covered by the settlement in its production system and supply chain. He said the manufacturer is devoting time and resources to improving safety and quality across its operations, including ensuring that employees understand all regulatory requirements and comply with them.

Earlier this month, House Transportation Committee Chairman Peter DeFazio, an Oregon Democrat, said he was requesting information from Boeing and the FAA about the plane maker’s recent production problems.

It wasn’t clear how long the halt might last, these people said. American Airlines Group Inc. AAL -0.78% was slated to receive a new Dreamliner this week, but that delivery isn’t expected until next week at the earliest, one of these people said.

A Boeing spokesman said the company was working in a timely and transparent manner to provide regulators with more information related to undelivered 787s. The Federal Aviation Administration on Friday confirmed that Boeing had halted Dreamliner deliveries, saying that the plane maker needs to demonstrate that its proposed inspection method complies with federal-safety regulations.

The temporary halt could further pressure Boeing’s finances, as customers typically pay the bulk of an aircraft’s price on receipt, and disrupt airlines’ plans as travel demand picks up along with rising Covid-19 vaccinations.

Deliveries are on track to fall short of expectations set by Chief Executive David Calhoun last month, when he told analysts the manufacturer planned to hand over 10 to12 Dreamliners to customers each month.

The FAA launched a review of Boeing’s Dreamliner production last year and has increased scrutiny of its 737 MAX manufacturing operations following earlier factory slip-ups.

Boeing has delivered 12 Dreamliners in the two months since it resumed deliveries of the aircraft on March 26.

As part of its Dreamliner scrutiny, the agency has recently requested more information about the plane maker’s proposed method for addressing quality issues using a system that would allow for targeted checks of newly produced aircraft, rather than broader inspections of more areas, people familiar with the matter said. Boeing’s proposed method is based on a statistical analysis of data.

Until Boeing can satisfy the FAA’s requests, the agency is requiring Boeing to perform the broader inspections, which are more time-consuming and labor-intensive, these people said.

Many of the 787 quality lapses involve tiny gaps where sections of the jet’s fuselage, or body of the plane, join together. Problems have emerged in other places, too, including the vertical fin and horizontal stabilizer at the tail. Such gaps could lead to eventual premature fatigue of certain portions of the aircraft, potentially requiring extensive repairs during routine, long-term maintenance.

Boeing’s 737 MAX Resumes Commercial Service in U.S.
American Airlines put Boeing’s 737 MAX back in the air with passengers in late December on a flight from Miami to New York. It was the first time in nearly two years that the MAX carried passengers in the U.S. Photo: Marco Bello/Reuters (Video from 12/29/20)
The plane maker has delivered a total of 12 Dreamliners in the two months since it resumed deliveries of the aircraft on March 26, following a five-month halt while it addressed the production lapses, according to aviation data firm Ascend by Cirium. Boeing’s last Dreamliner delivery was on May 4, Cirium data show.

Boeing has reduced output of the Dreamliner to five a month after shuttering assembly at its Everett, Wash., plant near Seattle and focusing production at North Charleston, S.C. It had built up a backlog of around 100 finished planes by the end of April, and had hoped to deliver most of them by the end of the year.