Boeing stock down as new plane faces scrutiny
NEW YORK (AP) — Shares of Boeing Co. fell Friday after federal aviation officials said they will review critical systems in the company's troubled new airplane.
The Federal Aviation Administration said it was conducting a complete review of the design and construction of Boeing's new 787, although top government officials declared the plane safe.
Boeing shares fell $1.96, or 2.6 percent, to $75.13 in afternoon trading.
The 787, which Boeing calls the Dreamliner, is made of composite materials and contains other technological advances designed to make it more fuel-efficient and comfortable. Boeing has delivered 50 of the 787s to airlines all over the world and has orders for nearly 800 more.
This week in Boston, a fire broke out in an auxiliary power unit on one 787 and a fuel leak delayed takeoff of another. On Friday, a 787 in Japan developed a cracked windshield.
Boeing officials said the problems are no worse than those experienced by the 777 jetliner when it was introduced in the mid-1990s. That plane is now a top seller.
Analysts downplayed the FAA review, saying that officials would have done something more dramatic if they considered the safety risk to be greater.
Jason Gursky of Citigroup said the FAA launched a formal review partly to assure the public that the plane is safe. "It appears unlikely that the review will uncover something critical enough that materially harms the outlook for the plane," he said in a note to clients.
Jefferies & Co. analyst Howard Rubel called the 787 issues "teething problems" and doesn't expect the FAA review to slow down production of the plane.
"If there were greater concerns, we could see more severe actions such as the grounding of aircraft," Rubel said. He added, however, that any further setbacks for the 787 will be magnified.