Boeing (NYSE:BA) delayed the launch of its 787 Dreamliner four times. That certainly allowed some customers to ask for penalties and it even may have allowed some airlines to cancel orders without financial consequences. Boeing has already reported a bad quarter due to weak sales and a worker strike. The recession in air travel and Boeing's tardiness in getting its new aircraft out the door may be about to exact a very large pound of flesh from the U.S. firm.
According to The Wall Street Journal, "A Dubai-based aircraft-leasing company called LCAL -- set up specifically to handle the Boeing 787 Dreamliner -- has decided to cancel 16 of the 21 jetliners it had on order."
Oddly enough, the cancellation could make Boeing a buy, if it can hold onto most of the balance of its 787 orders. That is a major task since airlines may start to suffer losses due to falling traffic.
But, the 787 has a huge attraction. It is more fuel-efficient than older jets. The price of crude will not stay down forever. And, many airlines have planes that are so old that they are reaching the end of their useful lives.
Bad news is already priced into Boeing's stock, which has dropped from a 52-week high of over $88 to $42. Any good news could get the stock to pop back up, even if it is for a brief time.
Boeing just needs to hang onto most of the rest of its plane orders.
Douglas A. McIntyre is an editor at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
2-08-2009 @ 6:40PM
markus said...
It took over 7 years to type-certify the SJ30-2. The interior system does not have its supplemental type-certificate yet. These are two issues that are REQUIRED before a delivery can be made to any airline. The 787's problems and technical issues with a new material could push this out even further that the SJ30. 10 years to type certification and delivery?