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Exclusive-U.S. FAA finds Boeing 787 certification documents incomplete -sources

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© Reuters. FILE PHOTO: The Boeing logo is displayed on a screen, at the New York Stock Exchange (NYSE) in New York, U.S., August 7, 2019. REUTERS/Brendan McDermid/

By Eric M. Johnson and David Shepardson

SEATTLE/WASHINGTON (Reuters) -U.S. air-safety regulators have told Boeing (NYSE:BA) Co the documentation it submitted to win approval to resume 787 deliveries to airlines after a year is incomplete, two people familiar with the matter said.

The U.S. Federal Aviation Administration (FAA) identified a number of omissions in Boeing’s documentation, submitted in late April, and has sent portions of it back to the planemaker, one of the people said.

A second person said it was too early to say whether FAA concerns would lead to a new delay in resuming deliveries, which have been suspended for the past year due to production flaws.

Boeing shares pared gains on Friday afternoon to trade up 1% at $125.12 after rising as much as 6.2% earlier in the session.

Boeing Chief Executive Dave Calhoun highlighted the submission in the company’s April 27 earnings call, calling it a “very important step” and saying it was preparing the first 787s for delivery, but stopped short of providing a date.

People briefed on the matter say the submission was made shortly before the call.

A Boeing spokesperson said the company continues to have a transparent dialogue and work closely with the FAA on the remaining steps.

An FAA spokesman declined to elaborate, saying only, “Safety drives the pace of our reviews.”

Clearing a swollen inventory of twin-aisled Dreamliners and its best-selling 737 MAX jets is vital to the U.S. planemaker’s ability to emerge from the overlapping pandemic and jet-safety crises, a task complicated by supply-chain bottlenecks and war in Ukraine.

Deliveries of the 787 have been halted for a year as Boeing worked through inspections and repairs in an industrial headache expected to cost about $5.5 billion. Boeing has more than 100 of the advanced composite twin-aisle jets parked in inventory, worth about $12.5 billion.

In February, the FAA said it would not allow Boeing to self-certify individual new Boeing 787 planes. Then-FAA Administrator Steve Dickson said the agency needed from Boeing “a systemic fix to their production processes. They’ve got to produce the quality on their production line that we’re looking for and that they’ve committed to.”

The FAA said in February it would retain the authority to issue airworthiness certificates until it is confident “Boeing’s quality control and manufacturing processes consistently produce 787s that meet FAA design standards.”

Reuters reported in late April that Boeing has advised key airlines and parts suppliers that deliveries would resume in the second half of this year, with one industry source saying deliveries could resume in a matter of weeks.

Boeing’s certification package is a sprawling set of documents and data that shows the jet’s compliance, though the FAA controls the final determination. The package lays out inspections and repairs Boeing will undertake on dozens of planes sidelined by production flaws. The documentation is a crucial step before Boeing can resume deliveries.

Boeing’s chief financial officer, Brian West, made upbeat comments on the 787’s progress at a Goldman Sachs (NYSE:GS) conference this week.

“This certification plan submission was an important milestone, and it reflects a very thorough comprehensive set of documents that verifies that we are in conformance,” West said. “And there’s been an enormous amount of work into that, working side by side with the FAA along the way.”

Boeing suspended deliveries of the 787 in late May 2021 after the FAA raised concerns about its proposed inspection method. The regulatory agency had issued two airworthiness directives to address production issues for in-service airplanes and identified a new issue in July.

“I’ll remind you that we haven’t really seen anything new in a while,” West added. “So we’re working hard on making sure that that submission is thorough, and now the FAA has it, and we are standing by ready and willing to enter any discussion, answer any question and help them do their work as they move through their certain protocols.”

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Rocket Lab USA Shares Gain 5% on Q1 Earnings Beat and Raise

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© Reuters. Rocket Lab USA Shares Gain 5% on Q1 Earnings Beat and Raise

Rocket Lab USA, Inc. (RKLB) shares were trading more than 5% higher after-hours following the company’s reported Q1 results, with EPS of ($0.06) coming in worse than the consensus estimate of ($0.04).

Revenue grew 124% year-over-year to $40.7 million, beating the consensus of $27.48 million, with Space Systems contributing 84% of total quarterly revenue, growing 1,873% year-over-year.

The company provided its Q2/22 outlook, expecting revenue in the range of $51-54 million, compared to the consensus of $41 million, with expected Launch Services revenue of approximately $19 million and expected Space Systems revenue of $32-$35 million.

The company also announced that the CAPSTONE spacecraft has arrived at the launch site Rocket Lab in New Zealand and begin the preparation for the launch to lunar orbit using the Electron launch vehicle and Lunar Photon spacecraft bus.

By Davit Kirakosyan

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United Airlines lifts second-quarter revenue forecast

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© Reuters. FILE PHOTO: United Airlines planes are parked at their gates at O’Hare International Airport ahead of the Thanksgiving holiday in Chicago, Illinois, U.S., November 20, 2021. REUTERS/Brendan McDermid

By Rajesh Kumar Singh

CHICAGO (Reuters) – United Airlines Holdings (NASDAQ:UAL) Inc on Monday raised its revenue estimate for the current quarter despite trimming capacity, underscoring a booming travel demand.

The Chicago-based carrier now expects total revenue per available seat mile to be up 23%-25% from the same period in 2019, up from a prior forecast of 17%.

Last month, the airline said it expects to generate the highest quarterly revenue in its history in the quarter through June, helping it return to profit.

While the surge in bookings is largely driven by leisure travelers, office repoenings and easing border restrictions have bolstered the industry’s outlook.

Last week, United said this summer is expected to be the busiest since the pandemic. It estimates nearly 5.3 million customers will fly with United during the Fourth of July holiday period.

Strong consumer demand is also helping United and other carriers deal with soaring fuel costs, which have more than doubled in the past year.

United also raised its fuel bill estimate for the quarter by 17%. It is now projected to increase by about 40% from the first quarter of this year.

Non-fuel operating expense is also expected to be higher than the previous estimate, the company said. United, however, still expects an adjusted operating margin of 10%.

The company has adjusted its plans to ramp up capacity. In the current quarter, it now expects its capacity to be down 14% from pre-pandemic levels.

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Tencent Music Reports Q1 Miss, Revenues Down 15.1%

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© Reuters. Tencent Music (TME) Tencent Music Reports Q1 Miss, Revenues Down 15.1%

Tencent Music Entertainment Group (NYSE:TME) reported its Q1 results, with EPS of $0.06 coming in worse than the consensus estimate of $0.07. Total revenues declined 15.1% year-over-year to $1.05 billion, missing the consensus estimate of $1.23 billion, due to the headwinds in an evolving market landscape.

Revenues from online music services in Q1 were down 4.8% to $413 million. Revenues from music subscriptions grew 17.8% year-over-year to $314 million, with online music paying users reaching 80.2 million (up 31.7% year-over-year) and paying ratio increasing to 13.3% from 12.4% and 9.9% in Q4 and Q1/21, respectively.

Revenues from social entertainment services and others in Q1 were down 20.6% to $635 million.

Shares of Tencent Music were down 40% year-to-date into the results.

By Davit Kirakosyan

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