Wednesday, November 17, 2010

What will drive another 787 delivery delay?

Morgan Stanley equity analyst, Heidi Wood, raised the spectre of additional delays to delivering the 787 to customers by trying to read between the lines of Boeing's latest statement that they released on Nov. 16th.

In my opinion, trying to read into something that is or isn't in a press release does smack of grasping at anything for information.

Is there a possibility of a delay?

Yes, a very real one. The fire was serious and had exposed some shortcomings in some of the systems that distribute electrical power through out the aircraft. No one knows what the problem is...yet. How long to fix it will be determined by the root cause of the fire, the fixes that needed to be implemented, and how to make sure that the insulation does not catch fire under any circumstance.

All that can be rectified but the driver of any delays won't be how long it'll take to fix any issues but the driver will be the FAA and any demands they place on Boeing to demonstrate that the power panels are safe and that there is very limited chance of fire in the aft bay and if there is a fire, that it is contained and doesn't damage any other vital systems. The other factor that Boeing will need to demonstrate (or re-demonstrate) is that the redundancies work as advertised. Boeing seemed to have been saying this yesterday though Heidi Woods was casting doubt about that in her research note.

When will the 787 return to flight? Only god and the FAA knows but we have to wait to hear the final results of the investigation before any educated judgement is rendered by those outside of the 787 program and the FAA.


GP said...

The analyst was right to question the company on the potential for a delay (that is her job) in a research note. All the Boeing information released since the fire has been PR material to diminish the significance of what happened, which they will do until a delay is announced.

Don't get me wrong, as a former aeronautical engineer who worked on composite aircraft, I am for this new plane. However, I have noticed that Boeing has been slow to announce all of the delays in the past, usually waiting until they can no longer deny the need for a delay and when it is clear to all that a delay will be announced. The fault lies with management, not the engineering staff.

Most of the new media has not focused on asking the right questions of Boeing, perhaps out of fear of being cut off from the PR machine. It really shows the lack of independent thinking and writing in new media versus old media or banking analysts.

Unknown said...

Asking the right questions and fear of being cut off is not in any way exclusive to Boeing. Airbus and EADS also play this game to the point of threatening to yank advertising if they don't like the questions being asked. Just look at what one respected news service is doing now - basically rewording and adding some background information to press releases. No wonder we are not hearing any tough questions about the QANTAS A380 incident.

And there was also the story of a well-known journalist getting transferred because LMT didn't like his/her stories on the F-35 program.