itself," said Russell Solomon, an analyst at Moody's Investors Service. "You start getting into three, six months out and it has a bigger impact and my guess is that they (Boeing) would have to potentially cut the production rate."
BREAKING DOWN THE COST
Besides the actual cost of fixing the 50 787s in service, plus another 50 or so in production or waiting for delivery, Boeing will have to compensate carriers unable to use 787s as planned and pay penalties for late deliveries, most likely in the form of discounts on future purchases.
It also is not clear whether any fix - particularly if the probes lead to the identification of a major design fault - would also be costly.
At the same time, it will be starved of the cash it was expecting for delivering 787s it is still producing at the current rate of five per month, which could add up to $300 million per month, analysts estimate.
And the longer the planes are grounded, the more Boeing is exposed, as airlines may start to reconsider orders and - in extreme cases - cancel some, especially if the battery fix adds weight to the plane and reduces its vaunted fuel efficiency.
Boeing, which is expected to report a drop in fourth-quarter earnings next Wednesday, is not talking specifically about costs of the 787 issue yet.
"It's too early to know the financial effects," said Boeing spokesman Charles Bickers. "We're focused on working through the process, getting to a resolution and returning the airplanes to service."
Douglas Harned, an analyst at Bernstein Research, puts the cost of a fix at no more than $350 million, or about 30 cents per Boeing share, in a worst-case scenario. Howard Rubel at Jefferies estimates the cost at somewhere between $250 million to $625 million, but notes that some of the cost may be borne by suppliers.
"There's still the hope of a relatively easy fix followed by a return to service within a week or two, but there's also the strong and growing risk that they'll need to redesign the battery system, which could mean another six to nine months," said