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Exclusive-U.S. FAA finds Boeing 787 certification documents incomplete -sources

Stock Markets May 13, 2022 01:22PM ET
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© Reuters. FILE PHOTO: The Boeing logo is displayed on a screen, at the New York Stock Exchange (NYSE) in New York, U.S., August 7, 2019. REUTERS/Brendan McDermid/

By Eric M. Johnson and David Shepardson

SEATTLE/WASHINGTON (Reuters) -U.S. air-safety regulators have told Boeing (NYSE:BA) Co the documentation it submitted to win approval to resume 787 deliveries to airlines after a year is incomplete, two people familiar with the matter said.

The U.S. Federal Aviation Administration (FAA) identified a number of omissions in Boeing's documentation, submitted in late April, and has sent portions of it back to the planemaker, one of the people said.

A second person said it was too early to say whether FAA concerns would lead to a new delay in resuming deliveries, which have been suspended for the past year due to production flaws.

Boeing shares pared gains on Friday afternoon to trade up 1% at $125.12 after rising as much as 6.2% earlier in the session.

Boeing Chief Executive Dave Calhoun highlighted the submission in the company's April 27 earnings call, calling it a "very important step" and saying it was preparing the first 787s for delivery, but stopped short of providing a date.

People briefed on the matter say the submission was made shortly before the call.

A Boeing spokesperson said the company continues to have a transparent dialogue and work closely with the FAA on the remaining steps.

An FAA spokesman declined to elaborate, saying only, "Safety drives the pace of our reviews."

Clearing a swollen inventory of twin-aisled Dreamliners and its best-selling 737 MAX jets is vital to the U.S. planemaker's ability to emerge from the overlapping pandemic and jet-safety crises, a task complicated by supply-chain bottlenecks and war in Ukraine.

Deliveries of the 787 have been halted for a year as Boeing worked through inspections and repairs in an industrial headache expected to cost about $5.5 billion. Boeing has more than 100 of the advanced composite twin-aisle jets parked in inventory, worth about $12.5 billion.

In February, the FAA said it would not allow Boeing to self-certify individual new Boeing 787 planes. Then-FAA Administrator Steve Dickson said the agency needed from Boeing "a systemic fix to their production processes. They've got to produce the quality on their production line that we're looking for and that they've committed to."

The FAA said in February it would retain the authority to issue airworthiness certificates until it is confident "Boeing's quality control and manufacturing processes consistently produce 787s that meet FAA design standards."

Reuters reported in late April that Boeing has advised key airlines and parts suppliers that deliveries would resume in the second half of this year, with one industry source saying deliveries could resume in a matter of weeks.

Boeing's certification package is a sprawling set of documents and data that shows the jet's compliance, though the FAA controls the final determination. The package lays out inspections and repairs Boeing will undertake on dozens of planes sidelined by production flaws. The documentation is a crucial step before Boeing can resume deliveries.

Boeing's chief financial officer, Brian West, made upbeat comments on the 787's progress at a Goldman Sachs (NYSE:GS) conference this week.

"This certification plan submission was an important milestone, and it reflects a very thorough comprehensive set of documents that verifies that we are in conformance," West said. "And there's been an enormous amount of work into that, working side by side with the FAA along the way."

Boeing suspended deliveries of the 787 in late May 2021 after the FAA raised concerns about its proposed inspection method. The regulatory agency had issued two airworthiness directives to address production issues for in-service airplanes and identified a new issue in July.

"I'll remind you that we haven't really seen anything new in a while," West added. "So we're working hard on making sure that that submission is thorough, and now the FAA has it, and we are standing by ready and willing to enter any discussion, answer any question and help them do their work as they move through their certain protocols."

Exclusive-U.S. FAA finds Boeing 787 certification documents incomplete -sources
 

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