Boeing recently halted deliveries of 787 jets in February.
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American Airlines can’t get all the 787 Dreamliner jets it wants from Boeing, and it’s causing scheduling issues for the airline.
on Friday, wall street journal informed of that American Airlines (ticker: AAL) was suspending its Philadelphia to Madrid route for a few weeks in May and June, citing delivery delays for the jet. Both companies confirmed the position.
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Boeing recently halted deliveries of 787 jets in February, not because of a parts shortage, but because of paperwork. The company said at the time, “an analysis error by our supplier related to the 787 forward pressure bulkhead” was to blame for the stoppage.
“We continue to work with our customers, including American Airlines, on the timing of the delivery and deeply regret the disruption to their operations,” a Boeing spokeswoman said in an emailed statement Friday.
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A US spokeswoman said the company would offer alternative travel arrangements to affected customers. American remains “committed to our customers and team members and to minimizing the impact of the 787 delivery delay,” she said in the emailed statement.
Investors have heard a lot from Boeing (BA) in recent years about production problems and delivery delays. The pause of the American route is the result of a backlog created by all of Boeing’s production issues that span years now.
All investors can hope for is that the latest delay story is the beginning of the end — and they finally have some reason for optimism that these delivery issues may be coming to an end. Boeing CEO Dave Calhoun recently said that delivery problems were diminishing for the company as the supply of parts improved.
There is no definite timetable for resuming 787 deliveries after the February pause. That would be up to the Federal Aviation Administration. Investors are paying attention to the delay based on how the stock is performing and haven’t yet completely believed Calhoun’s comments.
Boeing stock fell 1% in late trading Friday, while American Airlines stock was flat. The S&P 500 and Dow Jones Industrial Average were up 0.2% and 0.1%, respectively. Boeing’s stock has fallen about $12, or 6%, since the 787 delivery halt. The S&P 500 is down about 1% over the same period.
In 2022, Boeing plans to deliver 480 jets, up from 340 delivered in 2021. Boeing delivered 806 jets in 2018, the year before the grounding of the 737 Max or any impact from the Covid-19 pandemic. Wall Street expects Boeing to deliver about 580 planes in 2023.
Until Boeing’s performance and production rates return to normal, investors may react nervously to reports of delays that could upset the company’s customers.
Write to Al Root at [email protected]
