Good news, investors! On Friday, the Federal Aviation Administration approved Boeing's (NYSE: BA ) detailed design changes for the battery on the 787 Dreamliner. Considering the grounding of the Dreamliner has cost Boeing an estimated $600 million and counting, the FAA's decision is great news for the company. It's also great news for Boeing's Dreamliner partners.
Photo: Jose A. Montes, via Wikimedia Commons.
Will it fly?
With the FAA's decision, Boeing is expected to issue a service bulletin, which will facilitate quick repairs to the 50 planes owned by airlines around the world. Once repaired, the FAA is expected to issue a final directive, ending the Dreamliner's grounding. Even better news? Boeing will be allowed to resume deliveries of the 787 and expects to deliver all of the planes ordered for this year.
Now let's just hope the fixes work, as investigators in the U.S. and Japan haven't yet determined what caused the lithium-ion battery to overheat in the first place. Still, Mark Sinnett, Boeing's chief engineer for the 787, said that based on recent tests, the redesigns -- including better insulation, a stainless steel enclosure that'll vent possible smoke and contain fire as well as vent hazardous gases out of the plane, make the battery less likely to overheat.
Boeing's not the only one to benefit
In addition to the good news for Boeing, partners on the Dreamliner are also probably breathing a sigh of relief. Rockwell Collins (NYSE: COL ) and General Electric (NYSE: GE ) , both have a stake in the Dreamliner's success -- Rockwell supplies avionics equipment for the 787 and is expecting to increase production from four planes to 10 by the start of its fourth quarter, and GE supplies engines for the 787.
Will the stock soar?
Following the FAA's announcement, Boeing's stock rose approximately 2% and closed on Friday at $87.96 a share. That's great news for investors and hopefully signals a turnaround for the Dreamliner.
Boeing operates as a major player in a multi-trillion-dollar market in which the opportunities and responsibilities are absolutely massive. However, emerging competitors and the company's execution problems have investors wondering whether Boeing will live up to its shareholder responsibilities. In our premium research report on the company, two of The Motley Fool's best minds on industrials have collaborated to provide investors with the key must-know issues surrounding Boeing. They'll be updating the report as key news hits, so don't miss out -- simply click here now to claim your copy today.
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