Investor Alert: FAA Grounds Boeing 787s

As investors are no doubt aware, Boeing's (NYSE: BA  )  famed 787s were grounded in Japan by carriers All Nippon Airways and Japan Airlines early this Wednesday. What came as a surprise to most, though, was the Federal Aviation Administration's announcement to ground all 787s in the U.S. today. The FAA issued a statement saying the planes' battery issues will be investigated and that the agency will need to deem the batteries safe before the planes can return to service.

Currently, United Continental Holdings (NYSE: UAL  ) is the only U.S. airline with 787s in service; it operates six of them. While the grounding of six airplanes is hardly a reason for panic, Boeing shareholders' real worries arise in what a decision will mean for current and future 787 orders. As of Sept. 30, Boeing had $20.7 billion of work-in-progress inventory associated with the 787 program, which represents 52% of total commercial aircraft inventory. When you put the 787 into that perspective, a negative outcome is by no means inconsequential to the company. Investors should keep a steady eye on the FAA for now, as any negative outcomes could have profound effects on Boeing. 

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  • Report this Comment On January 16, 2013, at 7:21 PM, SuntanIronMan wrote:

    This is the problem with investing in a company that is essentially is betting everything on a single product. Obviously Boeing makes other commercial airplanes, as well as being a defense contractor. But the reason to buy the shares of Boeing was and still is the Dreamliner.

  • Report this Comment On January 17, 2013, at 9:51 AM, kabrink wrote:

    This is more about an Obama attack on Boeing than it is about safety.

  • Report this Comment On January 17, 2013, at 10:27 AM, catoismymotor wrote:

    kabrink, and why do you believe that?

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