(By Balachander) Boeing Co. (NYSE: BA) shares are off on Friday as the U.S. Federal Aviation Administration (FAA) said it will review the 787 Dreamliner's recent issues and critical systems.
"While the 787's reliability is on par with the best in class, we have experienced in-service issues in recent months and we are never satisfied while there is room for improvement," Boeing said.
The 787, which is mainly built out of composite materials, is touted as the Boeing's future cash cow as each plane costs about $200 million.
However, the 787, is not giving a "Dream Run" for Boeing with several incidents causing negative publicity. This week, one 787 plane caught fire, and another suffered a fuel leak.
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"We are confident that the aircraft is safe. But we need to have a complete understanding of what is happening," said FAA Administrator Michael P. Huerta.
The FAA said it reviews 787 in-service events as part of its continued operational safety process.
The regulator will conduct a comprehensive review of the Boeing 787 critical systems, including the design, manufacture and assembly.
"The safety of the traveling public is our top priority," U.S. Transportation Secretary Ray LaHood said. "This review will help us look at the root causes and do everything we can to safeguard against similar events in the future."
Boeing said it remains "fully confident" in the airplane's design and production system.
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Regulators expects the review to begin in Seattle, but may expand to other locations over the course of several months.
Boeing is one of two large commercial aircraft manufacturers globally, and one of the largest defense contractors in the world. iStock believes that the 787 program has begun to find its footing, and successful execution could drive Boeing's fundamentals and stock.
The company reported higher than expected 787 deliveries for the fourth quarter at 23, including 11 in December, totaling 46 in 2012. The strong deliveries would help the company reducing cash burn.
BA shares retreated 2.40 percent to trade at $75.22. Over the past year, the stock has been trading between $66.82 and $78.02.