Boeing Gets Its Wings

When Boeing (NYSE: BA  ) recently announced it had received Federal Aviation Authority certification for its 747-8F freighter, that was one small step toward fulfilling investor hopes for the company's revival. Then Boeing made the giant leap everyone's been waiting for.

In simultaneous announcements, Boeing confirmed Friday that both the FAA and the European Aviation Safety Agency have certified the 787 Dreamliner for commercial operation. Boeing's now cleared to begin delivering Dreamliners to inaugural customer All Nippon Airways on Sept. 26. After that, there's a long line of anxious customers to service: Delta (NYSE: DAL  ) , United Continental (NYSE: UAL  ) , and AMR (NYSE: AMR  ) are just a few of the airlines waiting to get their hands on the new bird.

What's it mean to you?
Assuming you don't run an airline, but do own Boeing stock, what this means to you is simple: Certifying the 787 for flight marks the "end of the beginning" of Boeing's long trip back into investors' good graces. Three years of delays, excuses, and broken promises have left Boeing's credibility in tatters, but the good news in the past couple of weeks gives Boeing a chance to begin rebuilding after the storm.

Despite all its troubles so far, and despite the threat of both customers and suppliers such as Spirit AeroSystems, General Electric (NYSE: GE  ) , and United Technologies (NYSE: UTX  ) suing Boeing over disruptions to their business caused by its delays ... even despite all this, Boeing insists its 787 program will ultimately earn it a profit. Management admits that it could take "several hundred deliveries" for the company to begin breaking even on its investment. But Boeing has 827 planes on order already, and will almost certainly sell more in years to come, now that it's proven the 787 can fly.

Given time, Boeing will earn a profit on this plane. Given time, investors will begin to trust Boeing again.

Is Boeing's stock price ready for liftoff? Add it to your Fool Watchlist, and find out.

Fool contributor Rich Smith does not own shares of any company named above. The Motley Fool has a disclosure policy.

Motley Fool newsletter services have recommended buying shares of Spirit AeroSystems Holdings. Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.


Read/Post Comments (8) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 28, 2011, at 10:55 AM, prginww wrote:

    boeing is a "no-brainer" investment at these levels if you are going to hold for 3-5 years.

  • Report this Comment On August 28, 2011, at 1:47 PM, aug313 wrote:

    Boeing could be the corner stone of your portfolio if you have a 2-4 year time line.

  • Report this Comment On August 28, 2011, at 2:38 PM, plange01 wrote:

    boeing is a growing disaster with no end! its now three year old nightmare liner is not where near ready and already obsolete!

  • Report this Comment On August 28, 2011, at 2:55 PM, ShrikeTheFoolish wrote:

    Plange,

    Your comment only proves that even idiots are allowed to have opinions.

    Boeing is fine. Your sensationalism is not.

  • Report this Comment On August 28, 2011, at 10:47 PM, karmatourer wrote:

    What a stupid reference to Delta re: the 787.They pushed back their place in line to 2020 or so.

  • Report this Comment On August 29, 2011, at 2:40 AM, prginww wrote:

    The Board of Directors of any other company would have looked at the record of the past seven years and demanded the immediate resignation of the guy at the top, who was so busy lobbying for a seat on the board of IBM, moving corporate headquarters as far from operations in the Seattle as possible, presiding over yet another crippling strike by coddled union employees, that he allowed Airbus to walk away with the market.

    His lack of oversight of the most important development project in the history of the company, the 787, resulted in a 3-year delay - when Boeing should have been wiping the floor with its competitor. The roll-out fiasco made Boeing the laughingstock of the industry - big, expensive rollout of a plane that was not even CLOSE to being able to get off the ground, stuck together with chewing gum and baling wire.

    Then the full one-year delay in the stretch version of the 747-400, which is easily a better aircraft than the A-380, further alienates the customer base, and gives Airbus time to iron out production glitches in their flagship, ceding the wavering market for supper-jumbos to Airbus for a decade.

    Now, after nearly a year of dithering, the company is about to launch development of a re-engined 737, barely equaling the almost ready-to-fly A-320 neo, providing no technological advantage either to the Airbus product or to the soon-to-be-flying Chinese C-919, putting the entire breadbasket of the company - the 737 - at risk of marginalisation.

    As long as McNerney is at the head of Boeing, investors need to keep more than just a close eye on the company - there is no reason to expect the potential for more dithering to diminish, for the company to continue to lose market share, and eventually its investment attraction.

  • Report this Comment On August 29, 2011, at 9:48 AM, praizinplace wrote:

    Yet another piti-FOOL excuse for an article. Used a whole lotta words to say absolutely nothing. Your so called "tattered reputation" has kept BA in step with EADS over that same 3 year period and we won't even discuss LMT's trending during that time.

    On a side note, you need to hire realtechwiz as your new drinker of foolish koolaid, he/she uses a bunch of words to say nothing as well, great job!

  • Report this Comment On August 29, 2011, at 3:16 PM, praizinplace wrote:
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