The Boeing Company
) received the necessary approval from the U.S. Federal Aviation
Administration (FAA) to test the 787 battery. Boeing 787
airplanes were grounded after two battery overheating incidents
in Jan 2013. Boeing is trying hard to find a solution to battery
overheating and the successful completion of the new set of
testing will likely pave the way for FAA's approval leading to
the resumption of commercial operation.
Boeing has made a three-layer improvement plan to overcome the
overheating problems of 787 batteries. First, the new design of
the battery will prevent faults from occurring and isolate any
that do; second, the enhanced operating and testing processes
will ensure highest levels of quality and performance of the
battery and its components and finally, though unlikely, even if
any battery failure reoccurs, the new enclosure system will keep
any level of battery overheating from affecting the airplane.
The 787 Dreamliner is the first passenger jetliner manufactured
mostly of lightweight and environmentally friendly composite
material. This is a welcome change from traditional materials
like aluminum and titanium. The new airplane was preferred by
airline companies as it also promises fuel efficiency, consuming
20% less fuel than the airplanes of its peers.
This 787 model forms an integral part of Boeing's commercial
airplane revenue target for 2013, which is in the range of $51
billion to $53 billion. Commercial Airplanes' 2013 deliveries are
expected to be between 635 and 645 airplanes. This includes
around 60 units of 787 deliveries taking into account the planned
increase in build rate and additional production flow time
provided throughout factory and across supply chain as the
company introduces the new 787-9.
Currently, Boeing has 890 net orders for the 787. Up
through Mar 5, 2013, the company received orders for 42
airplanes. To cope with the ever increasing backlog of
787s, Boeing has made plans to increase its current production
rate of 5 per month to 10 per month by the end of this year.
Although Boeing has received regulatory nod to carry on test of
new batteries, we are still uncertain about the outcome.
Consistent order booking of other variants of commercial
airplanes is nevertheless helping the company.
Recently, Boeing received orders worth $4 billion for its
commercial airplanes. The orders include 17 airplanes of the 737
United Continental Holdings Inc.
) ordered eight 737-900ERs, Qantas ordered five aircrafts and
leasing company GECAS ordered for another four airplanes. On the
other hand, 10 big 777 airplanes have been ordered by
Air Lease Corp.
Apart from the commercial airspace, Boeing is also one of the
leading players in the U.S. Aerospace and Defense sector. The
uncertainty prevailing over the U.S. defense budget and
sequestration might impact the defense revenue of the company.
Boeing and its aerospace peer
Lockheed Martin Corporation
) currently retain a Zacks Rank # 2 (Buy).
AIR LEASE CORP (AL): Free Stock Analysis
BOEING CO (BA): Free Stock Analysis Report
LOCKHEED MARTIN (LMT): Free Stock Analysis
UNITED CONT HLD (UAL): Free Stock Analysis
To read this article on Zacks.com click here.