Wing flaw cuts into 787's profits

The above is a structural design flaw that will, without question, lower the plane's profitability in initial deliveries to airlines. The Times quoted Barclay's (NYSE: BCS) analyst Joe Campbell as saying that with the wing repair and resulting cost overrun, "Boeing is highly likely to lose large sums of money on the first 400 to 600 aircraft."

Airlines have booked 850 orders for the Dreamliner, and one has to wonder if this latest delay -- the 787 in already two years too late -- will prompt some carriers to delay or cancel orders. Boeing's shares have drifted lower in the past two months, from about $51 to about $43, amid a 787 first flight delay.

From an commerce-generation and jobs standpoint, one hopes that will not be the case. However, if Boeing cannot correct this latest 787 issue relatively quickly, one can understand why carriers would begin to seek other commercial plane options. The Dreamliner is the first major airliner to use composite materials for most of its construction, and given the early setbacks, questions may begin to be raised concerning the appropriateness of using composite materials for a commercial airliner. While not prejudging the evolving and innovative technology, Boeing's progress to date with the 787 hasn't exactly offered conclusive evidence that composites represent the next-generation technology toward which commercial aviation should unwaveringly move.

Further, as noted, one can't underscore the importance of the 787. Commercial aviation represents one, critical, high-value-added export for the United States. Sales of commercial planes are vital to the United States' effort to end its trade deficit and to begin to establish trade surpluses -- a key component of any nation's wealth. Commercial plane construction is also responsible for hundreds of thousands of domestic U.S. jobs. Still, an unsafe plane is, simply, no plane at all. Hence, an enormous amount is riding on Boeing's ability to correct the wing flaw: here's hoping they're able to do so.

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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.