CHICAGO ( TheStreet) -- Shares in Boeing (BA - Get Report) were falling Friday as the Federal Aviation Administration prepared to review the design, manufacture and assembly of the Boeing 787 Dreamliner.
U.S. Transportation Secretary Ray LaHood, FAA administrator Michael Huerta and Boeing Commercial Airplanes CEO Ray Conner announced the review at 9:30 a.m. EST Friday, as the markets opened.
Shortly after the opening, shares were down $1.52 to $75.56. Shares opened the year at $76.55. They remain at the high end of the 52-week trading range between $66.82 and $78.02.
In a prepared statement released at 9:40 a.m. Boeing said it retains confidence in the aircraft, noting: "It is a safe and efficient airplane that brings tremendous value to our customers and an improved flying experience to their passengers."The airplane has logged 50,000 hours of flight and there are more than 150 flights occurring daily," the company said. "Its in-service performance is on par with the industry's best-ever introduction into service -- the Boeing 777. Like the 777, at 15 months of service, we are seeing the 787's fleet wide dispatch reliability well above 90 percent. "More than a year ago, the 787 completed the most robust and rigorous certification process in the history of the FAA. We remain fully confident in the airplane's design and production system." Nevertheless, Boeing said that "we have experienced in-service issues in recent months and we are never satisfied while there is room for improvement," and it welcome the FAA review. The long-awaited 787 has faced a string of problems this year. On Monday, while a Japan Airlines 787 was on the ground at Boston Logan Airport, the lithium ion battery used by the auxiliary power unit began to smoke and then caught fire. On Tuesday, a JAL 787 leaked fuel on the taxiway. An ANA flight was cancelled on Wednesday due to a brake-control issue. Since the aircraft began commercial flights last year, a number of electrical incidents have been reported; one promoted an emergency landing by a United (UAL - Get Report)787 last month. Also, "United has reportedly found a wiring problem that affects the same electrical system that was problematic for JAL," wrote RBC Capital Markets analyst Robert Stallard on Wednesday. "Boeing's 787 has been hit by a series of negative news stories over the last couple of days, with the predictable press histrionics," Stallard wrote. "We are cautious of taking an exaggerated response to any of the developments so far, but we think it fair to say that these have exacerbated Boeing's unfortunate reputation as a trouble magnet." "What these events probably do highlight is Boeing's less than stellar performance on the 787 program, and unfortunately reinforce the generally lackluster investor sentiment that appears to be holding back the stock," he said. "We could see a short term rebound from this latest 787 sell off as these issues blow over, but the broader malaise has not been addressed. " Follow @tedreednc -- Written by Ted Reed in Charlotte, N.C.
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