Boeing 787 stays under FAA oversight for factory-quality checks

Boeing Co.’s 787 Dreamliner suffered a new blow as U.S. regulators on Tuesday said they would retain authority for inspecting the jets before delivery.

The Federal Aviation Administration said in an emailed statement that it is taking the action to “allow the agency to confirm the effectiveness of measures Boeing has undertaken to improve the 787 manufacturing process.”

The company’s wide-body composite jet has been plagued by problems after discovery of flaws in the way sections of the plane were joined. 

Boeing shares pared their gains on the news, rising 3.2% to $216.70 at 12:21 p.m. in New York. Th stock earlier had risen as much as 4.5%

A Boeing spokesman didn’t immediately comment on the FAA’s announcement.

The action is the latest indication of tensions between the aircraft manufacturer and its regulator. The two tangled for months over how to redesign the 737 Max following two fatal crashes and the FAA has issued several civil fines against the company. 

Boeing revealed with its earnings last month that it faces $5.5 billion in total costs to inspect and repair Dreamliners and compensate customers for lost flying, wiping out its profits for the aircraft. The planemaker hasn’t handed over any of its marquee wide-body jets since June as Boeing and its suppliers grapple with tiny structure imperfections have cropped up around the jet’s air frame.

The Chicago-based company expects to spend around $2 billion to repair the 110 or so undelivered Dreamliners that have stacked up around its factories and in storage yards and signaled the work will extend through the end of next year. While Boeing hasn’t said when it expects to restart 787 deliveries, most suppliers don’t expect that to occur until the third quarter, according to analyst Ken Herbert of RBC Capital Markets.