Boeing said on Tuesday it could be forced to delay deliveries of its 787 Dreamliner after the company discovered a new production flaw that will require it to inspect all 90 jets in its inventory, the latest in a series of setbacks for the wide-body plane.
While the new production hiccup does not threaten flight safety, it comes after a month-long 787 delivery stoppage that was resolved in March and adds yet another delay for Boeing as the US planemaker struggles to rework the planes before they can be delivered to customers.
The problem involves a fitting for the 787's horizontal stabiliser installed by a Boeing production facility in Salt Lake City, Utah, the company said. The horizontal stabiliser, located at the base of an aircraft's tail, allows a plane to maintain longitudinal balance while flying.
Boeing will need to inspect all 90 Dreamliners in its inventory before they can be delivered, and expects that it will take two weeks to repair each aircraft, the company said.
The manufacturer said it found last week that the fitting included shimming – a material that fills gaps between the surfaces of an aircraft – that was improperly sized and did not meet specifications. On Friday it stopped approving for delivery all 787s suspected to have the flaw, the company said.
The issue does not immediately affect in-service 787s, Boeing said, but the company could not say how far back the issue stretches or whether Dreamliners currently operated by airlines will need a fix.
Boeing, which announced last week that it had increased 787 production from three to four jets a month, said the issue has not caused a halt in 787 production.
"There should be minimal production disruption given conforming shims require only minor changes," Jefferies analyst Sheila Kahyaoglu said in a note to clients.
Boeing shares, which fell 2.4 per cent immediately after the defect was announced, closed 0.7 per cent lower on Tuesday.
The US Federal Aviation Administration said in a statement it had validated Boeing's assessment that there was no immediate safety issue for 787s already in service.
The agency, however, said it would not issue any new airworthiness certificates for the 787 until the matter was addressed to its satisfaction.
The FAA typically delegates such authority to the manufacturer. But in some instances, like the 737 Max and 787, it has retained responsibility for approving each new aircraft.
Boeing said it has notified customers that rework would affect the timing of near-term 787 deliveries, but that it believed it could still deliver 70 to 80 Dreamliners this year.
The 787's latest problem mirrors production issues discovered in 2020 and 2021 that included improperly fitted shimming that led to paper-thin gaps between surfaces on the Dreamliner's fuselage.
Boeing stopped 787 deliveries at several points during that period, resuming them last August after agreeing to an FAA-approved modification plan for Dreamliners in the company's inventory.
The company faced yet another 787 delivery stoppage in February after Boeing found a data analysis error regarding the forward pressure bulkhead that was unrelated to the shimming problem. In March, the FAA said it would allow Boeing to restart 787 deliveries, because the US plane manufacturer had addressed concerns.
The latest 787 production defect comes as Boeing grapples with a 737 bracket installation issue disclosed in April, which slowed deliveries of the cash-generating family of narrowbody jets, including the bestselling Max 8 model.
Boeing chief executive Dave Calhoun in April called the problem a "gnarly defect" that was nearly impossible for workers to visibly assess. The company said last month it had begun delivering reworked 737s.
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COMPANY PROFILE
Initial investment: Undisclosed
Investment stage: Series A
Investors: Core42
Current number of staff: 47
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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UAE squad to face Ireland
Ahmed Raza (captain), Chirag Suri (vice-captain), Rohan Mustafa, Mohammed Usman, Mohammed Boota, Zahoor Khan, Junaid Siddique, Waheed Ahmad, Zawar Farid, CP Rizwaan, Aryan Lakra, Karthik Meiyappan, Alishan Sharafu, Basil Hameed, Kashif Daud, Adithya Shetty, Vriitya Aravind
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
NINE WINLESS GAMES
Arsenal 2-2 Crystal Palace (Oct 27, PL)
Liverpool 5-5 Arsenal (Oct 30, EFL)
Arsenal 1-1 Wolves (Nov 02, PL)
Vitoria Guimaraes 1-1 Arsenal (Nov 6, Europa)
Leicester 2-0 Arsenal (Nov 9, PL)
Arsenal 2-2 Southampton (Nov 23, PL)
Arsenal 1-2 Eintracht Frankfurt (Nov 28, Europa)
Norwich 2-2 Arsenal (Dec 01, PL)
Arsenal 1-2 Brighton (Dec 05, PL)
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A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5