Mounting Airline Losses from 787 Dreamliner Grounding

787 With Mt Rainier in DistanceK65116
787 With Mt Rainier in DistanceK65116

CEO Jim McNerney said to attendees at Boeing's (NYSE: BA) annual meeting that "The original promise of the 787 is fully intact." His comments were premature. Japan's two largest carriers said that fires started in the Dreamliner's batteries and the resulting grounding of the plane will affect their financial situations. That means the companies may ask Boeing for compensation.

According to Bloomberg:

ANA Holdings Inc., and Japan Airlines Co., the world's biggest operators of Boeing Co. 787s, forecast a bigger impact this year from the plane's grounding as they prepare to start commercial flights with the Dreamliner.

The grounding will cut ANA's sales by 9 billion yen ($92 million) in the year ending in March, compared with a 7 billion yen reduction a year earlier. Parking of the Dreamliner fleet will pare Japan Air's operating profit by 2.6 billion yen this year, compared with 1.3 billion yen last year, said Norikazu Saito, a managing executive officer.

McNerney's optimism about the 787 continues to be misplaced.

Filed under: 24/7 Wall St. Wire, Aerospace, Airlines Tagged: BA