Breaking: Boeing, hit with $6.6 million FAA fine, faces much bigger 787 repair bill – sources
Boeing Co will pay $6.6 million to US regulators as part of a settlement over quality and safety-oversight lapses going back years, a setback that comes as Boeing wrestles with repairs to flawed 787 Dreamliner jets that could dwarf the cost of the federal penalty.
Boeing is beginning painstaking repairs and forensic inspections to fix structural integrity flaws embedded deep inside at least 88 parked 787s built over the last year or so, a third industry source said.
The inspections and retrofits could take up to a month per plane and are likely to cost hundreds of millions – if not billions – of dollars, though it depends on the number of planes and defects involved, the person said.
Boeing shares extended losses in the final hour of trading, closing down 5.6%, after Reuters first reported the settlement with the Federal Aviation Administration over the planemaker’s failure to comply with a 2015 safety agreement.
The penalties include $5.4 million for not complying with the agreement in which Boeing pledged to change its internal processes to improve and prioritize regulatory compliance and $1.21 million to settle two pending the Federal Aviation Administration (FAA) enforcement cases.
“The FAA is holding Boeing accountable by imposing additional penalties,” FAA Administrator Steve Dickson said in a statement.
Boeing paid $12 million in 2015 as part of the settlement.
The planemaker is strengthening processes and operations “to ensure we hold ourselves accountable to the highest standards of safety and quality,” a spokesman said by email, adding that settlement “fairly resolves previously-announced civil penalty actions while accounting for ongoing safety, quality and compliance process improvements.”
Boeing engineers are working to determine the scope of inspections, including whether jets can be used as-is without a threat to safety, two people said. Boeing has not told airlines how many jets are impacted, another person said.
The FAA has been investigating instances of oversight lapses, debris left inside finished aircraft, and managers putting pressure on employees handling safety checks for the FAA, people familiar with the proceedings said.
The FAA has also wrapped into a single investigation three separate 787 defects arising over the last year that have triggered the invasive inspections, the people said.
Boeing told the FAA in August 2020 about the latest flaw, involving structural wrinkling in the interior fuselage skin where carbon-composite barrels that form the plane’s lightweight body are melded together.
The defect went unnoticed for months or longer because computerized safeguards that crunch data looking for quality flaws had not been programmed to look for the gaps, a third industry source said.