Things are not looking good for Boeing (NYSE:BA). Not good at all.
Last week, we ran down the list of problems reported with the plane maker's 787 Dreamliner, which began with an electrical fire on a test flight in Texas way back in 2010, moved on to rack up problems with brakes and fueling systems earlier this year, and then came full circle with electrical fires -- and even a small explosion -- earlier this month.
Last night, though, Boeing's problematic Dreamliner turned into a full-fledged nightmare.
Over on the other side of the globe, All-Nippon Airways (ANA) Flight 692 had just taken off from Yamaguchi Airport in Japan, bound for Tokyo's Haneda Airport. But only 18 minutes into the flight, the flight panel began flashing warnings of a critical battery error, and pilots reported an "odd" smell in the cockpit. Flight 692 immediately conducted an emergency landing, cutting short its flight and grounding at Osaka Airport, where inflatable escape chutes were deployed, and the planes 137 passengers and crew evacuated. Five people suffered minor injuries.
In response to the near-disaster, ANA -- the Dreamliner's inaugural customer, no less -- announced it is grounding its entire Boeing fleet to conduct safety inspections. Fellow Japanese carrier Japan Air Lines, which also suffered of 787-related safety incidents earlier this month, announced it is following suit. Between them, these two airlines have now grounded roughly half of the 50 Dreamliners that Boeing has built and delivered to its customers so far.
And this could be only the beginning. As of this writing, no other airlines have announced plans to ground their 787s. To the contrary, the only U.S. carrier currently flying the 787, United Continental's (NYSE:UAL) United Airlines, says it is not taking any "immediate action." And AMR Corporation (NASDAQOTH:AAMRQ) says that its American Airlines subsidiary is still intent on buying dozens of Dreamliners for its new air fleet. But over in India, another of the Dreamliner's very first customers, the local Civil Aviation authority says it is "reviewing the situation."
What happens next
Here in the U.S., meanwhile, a Federal Aviation Administration investigation into the plane's safety is gathering steam. Secretary of Transportation Ray LaHood appears to have prejudged the investigation's results, saying that, personally, he thinks "this plane is safe," and that he "would have no reservations in taking a flight on this plane."
That's nice to hear. There's an old saying, though, that "facts are stubborn things." Right now, the facts about the Dreamliner's safety are starting to stack up -- and not in Boeing's favor. In Japan, the transport ministry worries that passengers may lose "confidence" in the Dreamliner, and based on their decision to ground the plane, it seems Boeing's customers' confidence has been shaken as well.
None of this -- needless to say -- is going to be particularly good news for Boeing's 787 sales force. The company boasts often of how it has already sold nearly 850 Dreamliners around the globe, meaning that roughly one out of every five airplanes in Boeing mammoth 4,373-plane-long order backlog... is a 787. According to the company, this makes the Dreamliner "the most successful launch of a new commercial airplane in Boeing's history."
Foolish final thought
Or at least, it was the most successful commercial airplane, before the planes themselves started launching... and emergency-landing. As we all know, even "firm" orders aren't set in stone in this business, and it's only a matter of time before product defects, that have already turned into fleet groundings, begin to morph further into actual order cancellations -- and Boeing's backlog goes "poof" in a Tokyo minute.
I've said it before, and I'll say it again: The problems we're seeing with the 787 are not "normal squawks on a new airplane," as Boeing CEO Jim McNerney contends. They're serious problems, and if the company doesn't get them fixed before its reputation for quality goes entirely to the dogs, maybe even an existential problem for Boeing.
Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.