Major Lessor Tells Boeing To Sort 787 Issues Before Starting A New Plane

While much talk has focused on what plane Boeing will develop next, major leasing company Air Lease Corporation believes the answer should be none. During its earnings call yesterday, CEO John Plueger said that the planemaker should focus on getting its own house in order, specifically noting that a resolution to the ongoing problems with the 787 Dreamliner should be a priority.

Xiamen Air Boeing 787-9 Dreamliner B-1567
Photo: Vincenzo Pace | Simple Flying

ALC tells Boeing to get its house in order

Over the previous months and years, there has been much talk about where Boeing will invest its next research and development efforts. Right now, the planemaker has two gaps in the market that need to be filled. First is a new narrowbody; a clean sheet design to replace the 70-year-old 737 airframe. Second is a middle-of-the-market solution to plug the gap being left by the retirements of 757 and 767 aircraft.

Speculation on which way Boeing will lean has been abundant. Many believe that the middle of the market segment is a key gap in the lineup and will see Boeing’s attention sooner rather than later. Others believe the head start Airbus has in that sector with the A321LR and forthcoming XLR means Boeing has already missed the boat, and should therefore focus on replacing its workhorse narrowbody.

However, one of the world’s largest lessors, Air Lease Corporation, has another take on the situation. Speaking at the lessor’s earnings call yesterday, CEO John Plueger said that, before Boeing embarks on any new aircraft project, it needed to get its current products in order. He said,

“We want Boeing to … get its house right, to get its house in order. The 787 delays are impacting us, as well as the rest of the delivery, the manufacturing process. Boeing has gone through a tremendously difficult time and while they certainly have made a lot of progress, the blunt truth is we need them to fix the remainder of their house first before we have any interest in talking about new aircraft.”

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787 issues ‘mushrooming’

While ALC cited both the previous issues with the MAX and the ongoing problems with the Dreamliner products as headaches it is tired of dealing with, Plueger noted that the 787 is by far the most pressing issue now. He said,

“It’s clear that the production issues that have arisen on the 787’s seemed to have mushroomed, and there’s just greater and greater levels of inspection going on due to the non-conformity findings.”

787 pictures
Production issues with the 787 have seen deliveries delayed as inspections are stepped up. Photo: Boeing

The issue, he said, is not so much that the 787 is undergoing inspections which are impacting operations and deliveries of the type, but that there seems to be no clear path out of the situation. He continued,

“It is difficult to see a definitive fix that is agreeable by the aviation authorities going forward.”

He noted that, because the issues raised with the current fleet of 787s are very difficult to fix, the only way forward will be to ‘use-as-is.’ He said this would mean engineers and authorities agreeing that the machining issues on the Dreamliner fleet do not negatively impact safety and therefore the aircraft can be flown regardless.

Boeing’s 787 is undergoing in-depth scrutiny after minuscule imperfections were found in the fuselage. The defects amount to gaps around the width of a human hair, which might not meet specified skin flatness tolerances.

Boeing 787-10 dreamliner production south Carolina
With some deliveries now outside of the 12-month window, cancellations could begin to flow through. Photo: Boeing

Cancellations could be coming

Air Lease noted that the ongoing delays to deliveries of the 787 mean some are now passing the 12 month contract period for pain-free cancellations of the order. Although none have yet, this does open the door for Boeing customers to bolt from their contracts without penalty. Plueger noted,

“This has been dragging on longer than any of us have imagined. In fact, I don’t think Boeing has delivered a 787 to anyone since the end of October. So we have … a number of aircraft waiting, and yes, some of them are coming up on their 12 months, and some have already passed the 12-month point past delivery.”

The last thing Boeing needs now is a swathe of cancellations for its widebody product. As such, ALC is hoping that a resolution to the ongoing Dreamliner issue is reached sooner rather than later.