Lengthy Dreamliner 787 probe, fixing problem, may cost Boeing dear
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 Richard Aboulafia, an analyst at aerospace research firm Teal Group.
PRODUCTION DELAY LOOMS
More important is the effect on Boeing's production rate, which is scheduled to jump to 10 a month by the end of this year, from five now.
That jump is crucial to Boeing's plans to eventually make a profit on
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