Thursday January 17, 2013

Boeing crisis deepens as Dreamliners grounded worldwide

TOKYO: Aviation regulators on Thursday grounded most of the world's 787 Dreamliner fleet until a fire risk linked to the plane's batteries can been fixed, deepening a crisis for its US manufacturer Boeing.

Regulators in Japan, India and Chile followed the lead of the US Federal Aviation Administration (FAA) in ordering an indefinite halt to all operations, after a Japanese Dreamliner on Wednesday was forced into an emergency landing.

The FAA, which sets the benchmark for aviation standards, highlighted "a potential battery fire risk in the 787" after a suspected battery leak emerged as the focus of inquiries into the aborted All Nippon Airways flight.

Analysts said the ANA incident, following a series of safety scares involving the Dreamliner over the past week, needed careful crisis management from Boeing, which is staking its future on the next-generation plane.

The aircraft relies on battery-powered electronics rather than the hydraulics used in older planes, and Boeing says its use of lightweight composite materials is a breakthrough for airlines anxious to cut their fuel bills.

Boeing chief executive Jim McNerney said the company "deeply regrets" the impact of recent events on airlines and passengers, and vowed to take "every necessary step" in concert with the FAA to resolve the problems.

However, he stressed: "We are confident the 787 is safe and we stand behind its overall integrity."

But as a result of the mishap on the domestic ANA flight, 39 out of the 50 Dreamliners in operation by airlines around the world have now been grounded.

United Airlines, the only US carrier to fly the Dreamliner, joined ANA and Japan Airlines (JAL) in withdrawing the model from service. Air India and Chile's LAN Airlines followed suit.

"We will track the FAA enquiry into the Dreamliner. We can't say when we will allow it to fly again, it depends on when Boeing gives us satisfaction over safety concerns," Arun Mishra, India's civil aviation chief, told AFP.

Japan is home to 24 of all the Dreamliners in operation, and the government in Tokyo said it was taking no chances pending an investigation into whether the lithium-ion battery on the ANA flight had overheated and caught fire.

"Following the FAA decision, Boeing 787s will not be allowed to fly until their battery safety is assured," Japan's vice transport minister Hiroshi Kajiyama said.

Lithium-ion batteries are widely used in consumer electronics such as laptops and mobile phones, and airlines worldwide warn passengers against carrying too many in their checked or hand baggage because of the risk of overheating.

The powerful lithium-ion batteries used on the Dreamliner have emerged as the focus of concern in light of the ANA incident and another one on a JAL flight in the United States last week, with smoke reported on both planes.

Electrolyte leaks and burn marks have been found on the battery's metal casing, ANA said. Kyodo News reported that officials from the Japan Transport Safety Board were working on the principle that it overheated.

"Liquid leaked through the (forward battery compartment) room floor to the inside of the outer wall of the aircraft," Kyodo quoted investigator Hideyo Kosugi as saying.

Kajiyama told reporters: "Just by observing with the naked eye, the battery showed abnormalities, but electricity-linked equipment is complex so we need more investigation."

The batteries are made by Japan's GS Yuasa, one of a host of contractors hired by Boeing to build the Dreamliner in a complex web of global outsourcing that led to years of delays before ANA took delivery of the first plane in 2011.

GS Yuasa said it supplies its batteries first to France's Thales Group, which then assembles a system with other electronics for shipping to Boeing.

"So far, it is not clear whether the cause of the problem was the batteries or the electronic system," a GS Yuasa spokeswoman said, defending the Japanese company's "substantial experience and technologies".

GS Yuasa stock was down more than five percent in Tokyo trading Thursday, while JAL and ANA stock was down a lesser amount.

Boeing shares finished Wednesday 3.4 percent lower on Wall Street, even before the FAA announcement.

"Boeing engineers, aircraft experts and several Wall Street analysts have defended problems with the jet as routine for a new airplane. The power of those defences is now over," Douglas McIntyre of 24/7WallSt.com wrote in a report. - AFP