U.S. launches safety review of 787 after recent woes
By Deborah Charles and Alwyn Scott
WASHINGTON/NEW YORK (Reuters) - The U.S. government ordered a wide review of Boeing's latest passenger jet, the 787 Dreamliner, citing concern over a fire and other recent problems, but insisting the plane was safe to fly.
It was unclear how long the review will take or how much it will ultimately cost Boeing, but the company was concerned enough that it sent a top executive at the last minute to a Washington press conference on the problem. Boeing shares fell 2.5 percent.
The 787 represented a leap in the way planes are designed and built, but the project was plagued by cost overruns and years of delays. Some have suggested Boeing's rush to get planes built after those delays resulted in the recent problems, a charge the company strenuously denies.
Either way, regulators said a thorough examination was needed to identify the root cause of the problems, including a fire on a parked 787 on Monday.
"There are concerns about recent events involving the Boeing 787. That is why today we are conducting a comprehensive review," Transportation Secretary Ray LaHood told a news conference followed by more than 100 reporters around the world.
Those concerns notwithstanding, though, LaHood also maintained the plane was still airworthy.
"I believe this plane is safe and I would have absolutely no reservations about boarding one of these planes and taking a flight," he said.
The review will focus on the 787's advanced electrical systems and cover their design, manufacture and assembly, the Federal Aviation Administration said.
The move comes on top of a separate probe by U.S. safety investigators into a battery fire which caused "serious damage" to an empty Japan Airlines 787 jet at Boston airport on Monday. Early findings of that probe are due next week.
Boeing shares fell 2.5 percent to $75.16 in midday trading. Since December 4, when the first of the recent incidents took place, the stock is up 1.5 percent, underperforming a 4.3 percent gain in the S&P 500.
Much like the company's customers, who have generally stood behind it, analysts give the company good marks for its early response to the crisis.
"Boeing is doing a good job getting in front (as much as a company can) of the FAA situation. My view is that if the FAA deems this as a non-design issue, Boeing will be fine. If this is a design issue, it will be more troublesome because we need to pause the production to fix the design and then proceed," said Morningstar analyst Neal Dihora.
CHALLENGE FOR BOEING'S COMMERCIAL CHIEF
The 787, the world's first mainly carbon-composite airliner, is Boeing's boldest effort to revolutionize commercial aviation by using new technology to cut fuel costs by 20 percent. Each lightweight jet has a list price of $207 million.
Airlines are pleased with the savings, and have so far given the plane their approval, both by ordering more than 800 jets and mostly sticking by it through the current spate of troubles.
After roughly 10 incidents on 787s in six weeks, one jet suffered a cracked cockpit window on Friday, while another had an oil leak.
The review is also a significant test for the recently-appointed chief executive of Boeing's commercial airplanes division, Ray Conner, who attended Friday's news conference.
Conner, who was previously Boeing's commercial sales chief, said the company was committed to making the plane as reliable as possible and that its backup systems had been working well.
"We have complete confidence in the 787 and so do our customers," Conner said.
"The redundancies that we have put into this machine are phenomenal and the airplane performed perfectly in that respect. Now, we'd like to make sure that none of these happen again and that's what we're going to try to do."
A growing media storm about the 787 glitches echoes global publicity a year ago over wing cracks on the A380 superjumbo, built by Boeing's European rival Airbus.
The A380 has also been deemed safe to fly and few airlines have reported a dip in bookings, but the problems are expected to end up costing Airbus up to 500 million euros in repairs.
In both cases, everyday glitches have been swept up in the wider storm of publicity and attracted unusual attention, along with more serious problems.
"I can't think of any similar investigations, but apart from the battery fire, all the other things we have seen are 'so what?'" Paul Hayes, safety director at aviation consultancy Ascend, said of the FAA Boeing review.
The 787 Dreamliner made its first commercial flight in late 2011 after a series of production delays put deliveries more than three years behind schedule. By the end of last year, Boeing had sold 848 Dreamliners. It now has 50 in service.
The 787 makes extensive use of electrical components to perform tasks previously carried out by heavier equipment such as hydraulics.
(Reporting by Kentaro Sugiyama, James Topham, Mari Saito, Mayumi Negishi and Maki Shiraki in TOKYO, Anurag Kotoky in NEW DELHI, Deborah Charles and Alina Selyukh in WASHINGTON, Ernest Scheyder and Alwyn Scott in NEW YORK, Karen Jacobs in ATLANTA and Aman Shah in Bangalore; Writing by Ian Geoghegan, Tim Hepher and Ben Berkowitz; Editing by Alex Richardson, Nick Zieminski and David Gregorio)
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