The cloud of uncertainty that hung over the fate of
The Boeing Company
) 787-9 Dreamliner was finally cleared by the U.S. Federal Aviation
Administration ("FAA") and the European Aviation Safety Agency
("EASA"). Both the regulatory bodies gave the go-ahead to the 787-9
aircraft for commercial operation. With this approval Boeing's
787-9 variant will now be able to fly passengers over the long
This clearance will likely enable the timely delivery of the first
787-9 Dreamliner to its customer Air New Zealand later this month.
The 787-9 is the next generation version of the flagship
Dreamliner. It comprises an extended fuselage structure that will
accommodate more passengers and cargo. Other benefits of the 787-9
include fuel-efficiency and lower emissions.
Boeing worked hard to earn this approval, undertaking rigorous
flight test programs. The company received an Amended Type
Certificate for the 787-9 which is a stamp of safety and
reliability. The certificate further allows Boeing to produce the
787-9 with strict adherence to the sanctioned design.
Past Issues Confronted by the 787
The 787 Dreamliner has been at the forefront of much controversy in
the past one year, as numerous technical challenges plagued
Boeing's prized aircraft. There was the overheating incident of the
aircraft's battery that started a fire on a Japan Airlines flight
back in Jan 2013.
Following this incident, other airlines like All Nippon Airways,
United Airlines and Air India complained of similar issues. This
forced the FAA to ban the 787 for three months and cost the company
an estimated $600 million for repairing the batteries. To further
add to the company's woes, ice crystal formations cropped up in
some of the 787 planes while flying at high altitudes during
787 Makes a Comeback
The glitches however failed to dent the confidence of this
aerospace major. The company redesigned the lithium ion batteries
by adding a protection around the cells to control overheating, a
steel case to prevent any fire from diffusion as well as a tube
that vents fumes outside the aircraft. The FAA welcomed the effort
and granted approval for the new improved version. Before long the
787s were back in the skies.
More good news poured in for Boeing as the FAA, in May 2014, gave
the green signal for additional extended operations (ETOPS) for the
787 Dreamliner. The move will allow the 787 to operate up to 330
minutes from a landing field, which opened room for additional
To Sum Up
The safety approval from the regulators has thus brought a sigh of
relief for Boeing. Having said that, its order book nor its share
price has ever shown any signs of weakness on 787 woes. Recently,
Boeing sealed an order from All Nippon Airlines for the supply of
an additional 14 787 jets.
Going forward, the approval will likely help Boeing secure sizeable
orders for the Dreamliner. The worldwide passenger traffic is
estimated to grow by 31% in 2017 from the 2012 level as per a media
report. This will certainly unlock vast avenues for growth for
Boeing's 787-9 given its enhanced features.
Leading the order race could be China and India followed by North
America and Europe. As per a Boeing report, the Middle East will
also act as a key market for the 787 where the 777 is also very
The 787 has already gained a lot of interest among international
airlines. As of now, 787-9 accounts for 40% of the total 413 787
jets ordered from overseas customer. Boeing's prospects in the
commercial airline industry indeed look upbeat. The 787-9 approval
couldn't have come at a more appropriate moment for the aviation
Currently, the company holds a Zacks Rank #3 (Hold). Other
better-ranked aerospace players include Zacks Ranked #1 (Strong
) as well as Zacks Ranked #2 (Buy)
Spirit AeroSystems Holdings, Inc.
Leidos Holdings, Inc.
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