Dreamliner safety scares send Boeing's shares diving
By Rebecca Burn-Callander Wednesday, 09 January 2013
First there was the fire, then was the fuel leak. Today, it appears that a 'brake problem' has also been discovered aboard the 787 Dreamliner. Bad news for Boeing, which has seen shares plummet by 4.63% so far this week.
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On Monday, a fire broke out aboard a Dreamliner 787 operated by Japan Airlines shortly after landing at Boston Airport from Tokyo. The following day, the Dreamliner was in the headlines again. A fuel leak caused Japan Airlines to cancel a take off. Some 40 gallons of fuel spilled out of the plane as the airplane taxied away from the gate (perhaps someone forgot to put the filler cap back on?). And now, a brake problem on another Dreamliner has forced an All Nippon Airways flight to be cancelled in Japan.
It’s a publicity nightmare for Boeing, the manufacturer of the aircraft. After closing 2% lower on Monday, Boeing’s shares dropped a further 2.63% on Tuesday trading in New York. And today’s developments could slash the firm’s share price yet further. While no passengers or crew have so far been hurt by the faults, the question remains on everyone’s lips: what if these problems had taken place while airborne?
Monday’s fire is currently being investigated by aviation officials. It is believed that the fire, which filled the plane with smoke moments after passengers disembarked, was caused by an electrical fault. The US National Transportation Safety Board has said that it will hold off on any investigations as no accidents have actually taken place – yet.
But aviation pundits are up in arms about yesterday’s fuel leak. Back in December, the US Federal Aviation Administration identified errors in the assembly of fuel line couplings in the Dreamliner and warned that these errors could result in fuel leaking on to hot engine parts and start a fire, cause engine failure, or simply see the plane run out of fuel. Why were these claims not investigated further?
The launch of the Dreamliner aircraft, one of the most advanced planes ever built, has been beset with problems since manufacturing began. Technical glitches delayed launch from 2009 to late 2011 and even once the planes finally began rolling off the production line, the industry whispered that the Dreamliner was still not quite right.
Last year, a United Airlines flight was forced to make an emergency landing after an electrical problem on board. Then, in December, Qatar Airways was also forced to ground a Dreamliner after several finding similar electrical problems plaguing its aircraft.
So, yes, the Dreamliner is proving to be a headache for Boeing but perhaps investors should cut it a little slack. The Dreamliner is one of the most technologicically advanced flying machines produced at the hands of man. And it is very possible that it was shareholders themselves who hurried along its release. But history teaches us that teething problems, once overcome, are rapidly forgotten. One thing’s for sure, however, airlines across the world are going to think very carefully before ordering any more of these Dreamliners.
And let's just hope the Dreamliner doesn't become dubbed, 'the Nighmareliner'.