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Boeing 787 GROUNDED2

Courtesy of Boeing Co.

The 787s operating around the world were grounded Wednesday.

'Dreamliner' battery problem is becoming Boeing's nightmare

by Aubrey Pringle
Jan 17, 2013

Turbulent 2013 for Boeing Co. shares

Aubrey Pringle/MEDILL


The 787 saga has resulted in ups and downs for Boeing's stock this month.

After the Federal Aviation Administration grounded all U.S.-operated 787 aircraft late Wednesday, Boeing Co.’s shares were not soaring either.

The Chicago company’s stock price dropped nearly 3.4 percent Wednesday and remained almost as low Thursday, finishing at $75.26.

Two separate 'Dreamliner' fire scares in the past two weeks have been linked to the plane's lithium-ion batteries. Due to these incidents and a series of other malfunctions, Boeing 787 planes will not fly again until the aircraft and its batteries have been deemed safe, according to the FAA.

U.S. regulators have not grounded a major airliner in 30 years.

The FAA's order directly affects only the six U.S. planes operated by Chicago-based United Airlines. However other transportation authorities around the world are following suit and grounding their fleets as well.
Safety regulators in Japan, Europe and India issued orders similar to the FAA’s.

In a statement, Boeing stood behind the integrity of the 787 aircraft.

“Boeing is committed to supporting the FAA and finding answers as quickly as possible,” said CEO Jim McNerney. “The company is working around the clock with its customers and the various regulatory investigative authorities.”

Time is of the essence for Boeing. If a solution is not quickly found and implemented, the company’s bottom line could be in trouble, said aviation analyst Nick Heymann of William Blair & Co. of Chicago.

“Realistically it will take a few weeks and likely a couple months,” Heymann said. “If it stretches into a couple quarters, then you’ve got a problem.”

While this is a serious issue for Boeing, the company has made it through similar glitches before, Heymann said.

“There’s going to be a cost to it,” Heymann said. “But it’s not the end of the world.”

Boeing will pay the price in many forms, including rescheduling costs due to cancelled flights and shuffling production plans with suppliers. Production of 787s needs to move forward because Boeing has more than 800 orders in the pipeline.

Boeing also needs to restore airline and passenger confidence in the 787, which could require a major advertising campaign down the road. The so-called ‘Dreamliner’ planes had been touted as the next generation of aviation, and Boeing is depending heavily upon their success.

It is unknown how long the planes will remain restricted from flight.
The FAA’s order is based on concerns over the 787’s innovative use of a lithium-ion battery instead of the traditional nickel-cadmium or lead-acid batteries used in previous models.

The lithium-ion battery, which is increasingly being used to power cell phones, computers and electric cars, is central to the advanced nature of the Dreamliner. It operates with extra charge, which allows the 787 to function using mainly electrical systems as opposed to the mechanical or hydraulic ones in earlier models. This makes the plane lighter and more fuel-efficient.

The battery also provides power quickly and can be charged in less time, but it runs the risks of overcharging and overheating, which can cause fires.

Experts say a possible solution to the battery problem is a stronger casing around the lithium-ion batteries to better contain the power and prevent heat fires. Another option is requiring more frequent battery checks.

If Boeing is forced to switch to a different battery type, the new batteries would add weight to the Dreamliner and reduce its fuel-efficiency. It would also be very costly to buy and implement new batteries.

The FAA announcement said the agency is working with Boeing to “develop a corrective action plan” to get 787s back in service.