The production problems plaguing Boeing Co.’s Dreamliner program “appeared to have grown rapidly”, with no end in sight, said the chief executive of a major aircraft leasing company to investors this week.
Air Lease Corp. CEO John Plueger said during a February 22 earnings call that the non-conformities that the aircraft maker encountered last year at 787 led to longer delays than his company had predicted.
Plueger described “increasing levels of inspection in progress” and said it was “difficult to see a definitive solution that is acceptable to aviation authorities and the future”.
Dreamliners made in North Charleston and Everett, Wash., Have been under inspection for several months while Boeing looks for flaws and reworks them as needed.
The South Carolina plant is taking over the entire 787 assembly in March, but given the still-to-do inspection work, workers in Everett will continue to evaluate the jets made at the Seattle area plant. Boeing also opened a website in Victorville, California, to check out the Dreamliners made in Washington.
The company has not reported a delivery of 787 since October, and dozens of newly built large bodies are piling up in stock. About 80 were waiting to be delivered to customers in late January.
The process, according to Plueger, “is dragging on more than any of us imagined”.
The delays left the Air Lease in Los Angeles waiting for the ordered planes. They include about 787 deliveries that have been delayed for 12 months, at which point the company and its customers would be entitled to cancel.
“So just say that we are working with affected customers and we will take action … based on what those customers want to do,” said Plueger.
When Boeing first revealed the 787’s production problem, it said it was specific to a part of the fuselage. In late 2020, the scope of the inspections was expanded to include all areas where the fuselage segments are joined. Suppliers were also asked to make their own checks.
Boeing said the flaws, which are deviations from what it called “very strict tolerances” for the flatness of the aircraft’s liner, do not represent an immediate flight risk. CEO Dave Calhoun defended the decision to subject the planes to a lengthy inspection process.
During a earnings conference call on January 27, Calhoun told analysts and investors that this was a time to “fix things and do things the way (they) would like to do them.”
Calhoun also warned that “few if any” 787s would be delivered in February.
Without a clear resolution in sight, the Air Lease CEO said he was “waiting for more definitions from The Boeing Company” about what appears to be a “story in progress”.
“I wish I could say that we definitely knew that there was an end to everything and when things would start,” said Plueger.
Problems with the 787 also arose during the February 23 earnings assessment for Spirit AeroSystems, based in Kansas, which makes aircraft parts, including the front sections of the Dreamliner fuselage.
Spirit CEO Tom Gentile said the biggest impact on Wichita’s 787 business was reducing the production rate.
Boeing is reducing production of the 787 to five planes a month in coordination with the North Charleston consolidation plan, which has been postponed until next month from the original projected mid-2021 date.
Gentile and Spirit finance chief Mark Suchinski said he hopes to deliver on a set schedule at the rate of five a month for the rest of the year. They also projected that Boeing’s goal will be to resume building seven or eight 787s a month, or about half the program’s peak rate of 14.
The drop to five a month was achieved after several previous 787 production cuts announced before and after the COVID-19 pandemic, which reduced demand for new commercial aircraft.
Boeing spokeswoman in South Carolina Libba Holland said the company had no updates on Dreamliner fare or delivery plans.