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Nightmares

Boeing’s Dreamliner—a short history of a long-troubled aircraft

When it took off on its first commercial flight in 2011, Boeing’s 787 Dreamliner was hailed as the biggest revolutionary step in air travel since Concorde. It was marketed as lighter and more fuel-efficient than other similar planes, offering passengers higher levels of comfort.

In the last two days the craft has also sparked high levels of concern. Today, Japan Airlines brought a Dreamliner back to the gate at Boston airport when the jet leaked fuel.  This was just a day after an electrical fire broke out on another of JAL’s Dreamliners at the same airport. United Airlines has also found improperly installed wiring on one of its Dreamliner jets after examining them all in the wake of the JAL fire.

Boeing’s shares slumped almost 3% today. Some analysts say the problem is serious and could take Boeing a long time to solve. Carter Leake of BB&T wrote in a note summarized by the Wall Street Journal that:

Random electrical issues with aircraft can be very difficult to troubleshoot. If the problem is in the software, there are millions of lines of code to examine. If the problem is in the wiring there are over 50 miles of wiring and 50,000 connectors that could be the cause.

Boeing confirmed that Monday’s electrical fire started in a battery pack for the plane’s auxiliary power unit. Federal investigators are also scrutinizing what may have started the fire. Boeing has not yet said anything about today’s fuel leak and a spokesperson could not be reached for comment.

But Boeing’s Dreamliner woes have been lengthy and legendary. Due to several years of production delays and design setbacks, Boeing has a massive order backlog for 787s that has prompted once-keen customers to cancel contracts after waiting too long. Boeing remains profitable, and notched up over $1 billion in net income (pdf) for the third quarter. But the rapid pace of the Dreamliner’s latest glitches is certainly a worry for investors.

Here is a timeline of the Dreamliner’s issues since its launch:

September 2007: Boeing delays plans to deliver the first Dreamliner to Japan’s All Nippon Airways, citing technical issues.

March 2008: Goldman Sachs breaks the news that the aircraft will experience further delays.

December 2009: The Dreamliner finally completes its first test flight.

November 2010: But another test flight goes badly when a fire breaks out on board a plane. Cue further delays.

September 2011: Boeing has received regulatory approval to sell Dreamliners by now, but the long delays have led to a huge build up in unsold Dreamliners sitting on the tarmac. Boeing has over $16 billion in inventory—finished planes, partly-finished planes, and plane parts—tied up on its balance sheet, which one fund manager compares to “dinner in the anaconda.”

October 2011: The Dreamliner takes off on its first commercial flight. But China Eastern Airlines cancels an order for two dozen Dreamliners, which it ordered in 2005. Boeing is now tackling an order backlog totalling 800 planes, caused by its production delays.

July 2012: Boeing and US officials investigate why a Dreamliner jet has been spilling debris.

August 2012: Australian airline Qantas pulls an order for 35 Dreamliners, citing the weak market for international air travel.

January 2013: Safety problems put Dreamliners back in the news.

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