Boeing 767s Face Further Safety Checks
The hits keep on coming for Boeing Co. (NYSE: BA). More than 400 of its 767 planes face further safety checks, by order of the Federal Aviation Administration (FAA), according to a weekend report in the Wall Street Journal.
A new FAA directive calls for increased inspections of the elevators, the flight-control systems located in the tails of the wide-body jets that assist in raising and lowering the noses of planes while in flight. Modification and replacement parts that control the elevators are included in the order.
The 767 elevator system has faced scrutiny before. The FAA ordered inspections in 2000 to see whether “shear rivets” in the elevator mechanism had broken. The FAA has ordered additional tests related the elevator system since then, and Boeing has issued six service bulletins involving elevators and related parts. No accidents related to elevator malfunctions in 767s have been reported.
The latest FAA directive is scheduled to be published Monday in the Federal Register and to take effect in March. It will require U.S. airlines to replace any suspect parts within six years. Foreign regulators are likely to issue similar orders.
The work to inspect and repair the 767 is projected to cost airlines millions of dollars, though Boeing is likely to shoulder some of those costs. The report said that some carriers may have already replaced the parts in question to avoid the inspections.
Boeing shares had a stellar 2013 and the stock was the best performer of the entire Dow Jones Industrial Average by far. Our outlook for Boeing in 2014 was largely positive, despite some risks from ongoing quality issues and defense spending cuts. In fact, Boeing could be the most important stock in the Dow this year.
Boeing shares were inactive in premarket trading Monday, after closing at $136.65 on Friday. The 52-week range is $73.00 to $144.57.