The battery problems of the Boeing Co.’s 787 Dreamliner jets is currently being investigated, however, the progress is still pretty little. This means that this new plane can stay grounded for months and this has made many investors afraid that this will hit the Boeing financially big time. The losses can actually be higher than what was predicted initially.
The investors were initially expecting that safety inspectors would be working to come up with the exact cause of the two battery incidents in Japan and United States and the investigation would be wrapped up within a couple of weeks or so. It was also predicted that Boeing will implement a fix pretty quickly and the overall cost will not surpass a few hundred million Dollars. However, it does not seem to be happening, as far as the current situation is concerned.
The US National Transportation Safety Board has announced that the investigation procedure is in its initial stages. The Aerospace Analyst of BB&T Capital Markets, Carter Leake, stated that as the investigators announced the probe to be in initial stage, it has sent the hopeful investors a resounding message and proves that the fix will not be a quick one. Carter added that if the probe takes 6 or 9 months to be solved in its entirety, the current scenario will change completely. The costs for Boeing to provide fix will go higher and if the probe extend more than 6 months, Boeing may even consider cancelling the Dreamliner jets project altogether.
Since the 787 was grounded, the shares of Boeing have declined by 2.5% and this is a bit optimistic for the company. It seems that the investors are still not in the panic mode as this is kind of Wall Street’s way of showing confidence in the fundamentals of Boeing, as stated by Michael Merluzeau, who is the Managing Director of G2 Solutions.
Incidentally, other than 787, 4 different types of jets are manufactured by Boeing and the best seller of the lot is 737. The company, according to statistics, earns 40% of its total revenues through the defense arm of the same. Boeing is the biggest airplane maker in the world and it is still producing 787, even after it was grounded. However, none of these are being delivered and this strategy will definitely test investors’ faith.