Boeing remains under strict scrutiny, suffers further factory issues

The US Federal Aviation Administration (FAA) has confirmed its plans to keep in place its heightened scrutiny of Boeing following on from a 737 Max losing a door panel mid-flight in January. This news comes at the same time as Reuters reported a new investigation was beginning at Boeing, with the airline investigating that over 900 fasteners were improperly installed on undelivered 787 Dreamliners. A statement to Reuters from Boeing confirmed the issue, saying: “Our 787 team is checking fasteners in the side-of-body area of some undelivered 787 Dreamliner airplanes to ensure they meet our engineering specifications. The in-service fleet can continue to safely operate. “We are taking the time necessary to ensure all airplanes meet our delivery standards prior to delivery. ""We are working closely with our customers and the FAA (Federal Aviation Administration) and keeping them updated.” The FAA has also confirmed that, according to FAA administrator Michael Whitaker, more inspectors will be present at Boeings factories “for the foreseeable future”. During prepared remarks at a senate hearing, Whitaker confirmed that the agency “will keep a closer eye on other aviation manufacturers with in-person oversight that supports its audits”. Boeing had previously submitted a plan describing its efforts to improve safety to the FAA. An analyst for Bank of America told SeekingAlpha that Boeing’s earnings and free cash flow for the next several years will be “less than previously estimated”, following a revision of their outlook based on the manufacturers current supply issues. “Boeing remains uniquely positioned to the robust air-traffic demand environment, with the moat that the duopoly creates,” Ronald Epstein, analyst at BofA: “On the other hand, turning around operations could take time and uncertainties remain in the near future. “We now expect 737 deliveries to average 24 a month in 2024, down from 34 a month before,” BofA now expects Boeing to report losses of $2.50 a share, compared with its prior estimate for a loss of $1.20 a share for 2024, however BofA maintained its ‘Neutral’ rating on Boeing’s shares.