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Dreamliner Customers Back New Jet After Scrutiny over Fire

Bloomberg's Susan Li speaks to Tony Webber, former chief economist at Qantas, who says that all new airliners have teething problems.

Boeing (BA) Co. joined customers of its 787 in defending the Dreamliner’s performance, saying a fire onboard one of the jets, followed by a fuel leak and braking fault this week, are introductory pains that will be overcome.

“I am 100 percent convinced the airplane is safe to fly,” Mike Sinnett, chief 787 project engineer, said on a conference call with reporters yesterday. “I fly on it myself all the time.”

U.S. officials are investigating the Jan. 7 fire on a Japan Airlines Co. 787 at the Boston airport, which the National Transportation Safety Board said caused severe damage to the plane. This week’s incidents follow several others since the model entered service in late 2011, including a power problem that grounded a couple of the jets last month.

Boeing shares rose 3.6 percent to $76.76 in New York, recovering from the stock’s biggest two-day decline in more than seven months.

The 787’s entry into service hasn’t been any worse than that of the 777 -- one of Boeing’s most popular models -- and has been better than “other widebodies” available, Sinnett said, without naming those.

All new planes have introductory pains for the first year or two, Sinnett said. Qatar Airways Ltd. Chief Executive Officer Akbar al Baker, one of the 787’s biggest customers and a ready Boeing critic, agreed and said heightened scrutiny of the model won’t damp the carrier’s purchase plans.

‘Teething Problems’

“We will have these problems,” al Baker, who has received five of 30 Dreamliners on order and has expressed interest in a larger version of the jet, told reporters in Doha yesterday. “We’ve had no other technical issues. There will be small teething problems.”

Jets flown by Air India Ltd., which received its sixth Dreamliner on Jan. 7, are “operating smoothly,” said G. Prasada Rao, a spokesman in New Delhi. Boeing has agreed to modify the electrical system on one of the planes by March after providing an “interim solution” to a fault detected in September, he said.

This is a crucial year for the 787 as Chicago-based Boeing increases deliveries, trying to get out from under the weight of seven delays to the jet’s introduction that spanned more than three years. Boeing is set to double 787 production this year to help fill remaining orders for about 800.

JAL Fire

The planemaker has delivered about 50 of the $207 million jets to eight customers: All Nippon (9202) Airways Co., Japan Airlines, Air India, Ethiopian Airlines, Chile’s LAN Airlines, LOT Polish Airlines SA, United Continental Holdings Inc. (UAL) and Qatar Airways.

The fire broke out on a Japan Airlines plane after passengers disembarked from a flight that began in Tokyo. The carrier is investigating an open fuel valve that caused a leak the following day, delaying another 787 at the same airport. Then yesterday, All Nippon, the first and biggest operator of 787s, canceled a domestic Dreamliner flight in Japan due to a problem with the computer controlling the brake system.

They’re the latest image setbacks to plague the world’s first jet with a fuselage made chiefly of composite materials and an all-electric power system. The Dreamliner, a 230-seat plane marketed for its fuel savings on long-haul routes, entered commercial service in late 2011.

“You can regard this as sort of brand damage in phases,” said Richard Aboulafia, a consultant with Teal Group in Fairfax, Virginia. “But if you are going to see a series of incidents like these, then you’re going to have a second phase of blows to Boeing’s brand, but this time with the traveling public rather than the airlines.”

Smoke From Battery

In the Jan. 7 incident, a mechanic noticed smoke as he walked through the jet in Boston before it was to return to Tokyo. The smoke was traced to a fire from the battery used to start the auxiliary power unit, Japan Airlines said.

GS Yuasa Corp. (6674), which makes the lithium ion batteries for the 787, wasn’t aware of the reason for the fire and is cooperating with the investigation, said Tsutomu Nishijima, a spokesman for the Kyoto, Japan-based company. The company’s shares fell in Tokyo trading for a fourth consecutive day today.

It’s the first time Boeing has used lithium ion for a battery, Sinnett said, adding that he doesn’t regret the choice, isn’t considering replacing the batteries and would choose them again today, “knowing what I know now.” They’re the “only practical battery” for high-energy use that can be recharged quickly, he said.

Electrical Faults

Protections were designed to ensure a safe flight and landing for the plane even if the batteries burn, with any smoke diverted out of the cabin and cockpit while it’s flying, he said. The batteries have 1.3 million operating hours and had had no issues, Sinnett said.

Last month, electrical faults forced United and Qatar Airways to ground 787s. The plane has an electric power system, instead of diverting air off the engines, that cuts fuel use by as much as 3 percent by using five times as much electricity as other, similar jets.

Those faults were traced to problems with a batch of power panels, and Boeing is still working with officials to figure out the cause and the correction, Sinnett said, adding that it’s not a safety issue.

Fuel leaks in November were traced to the incorrect installation of some couplings, spurring Boeing and the U.S. Federal Aviation Administration to direct inspections and repairs. Boeing has made manufacturing changes to avoid the problem going forward, Sinnett said.

An in-flight fire in an avionics bay in 2010 forced the 787 test fleet to be parked for six weeks and added six months to the delay of the plane’s entry into service while engineers rewrote electricity-distribution software. That fire was traced to debris in an electrical panel, which is in the same bay under the cabin as the batteries now in question.

“Information will come in, we’ll challenge our assumptions, and if we need to make changes we’ll make those changes and move on,” Sinnett said. “There’s no metrics that scream at me we’ve got a problem, we just need to keep working it hard.”

To contact the reporters on this story: Alan Levin in Washington at alevin24@bloomberg.net; Susanna Ray in Seattle at sray7@bloomberg.net.

To contact the editors responsible for this story: Bernard Kohn at bkohn2@bloomberg.net; Ed Dufner at edufner@bloomberg.net

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Photographer: Bizuayehu Tesfaye/Bloomberg

Special operations vehicles surround a Boeing Co. 787 Dreamliner jet parked at a gate at Logan International Airport in Boston, on Jan. 8, 2013.

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Photographer: Bizuayehu Tesfaye/Bloomberg

Special operations vehicles surround a Boeing Co. 787 Dreamliner jet parked at a gate at Logan International Airport in Boston, on Jan. 8, 2013. Close

Special operations vehicles surround a Boeing Co. 787 Dreamliner jet parked at a gate at Logan International Airport... Read More

Photographer: Kiyoshi Ota/Bloomberg

A Japan Airlines Co. (JAL) employee stands near the company's Boeing Co. 787 Dreamliner aircraft during a media preview at Narita Airport in Narita City, Chiba Prefecture, Japan. Close

A Japan Airlines Co. (JAL) employee stands near the company's Boeing Co. 787 Dreamliner aircraft during a media... Read More

Photographer: Kiyoshi Ota/Bloomberg

A Japan Airlines Co. (JAL) Boeing Co. 787 Dreamliner aircraft during a media preview at Narita Airport in Narita City, Chiba Prefecture, Japan. Close

A Japan Airlines Co. (JAL) Boeing Co. 787 Dreamliner aircraft during a media preview at Narita Airport in Narita... Read More

Photographer: Bizuayehu Tesfaye/Bloomberg

A Boeing Co. 787 Dreamliner jet operated by Japan Airlines Co., right, is towed back to the gate after a fuel leak at Logan International Airport in Boston. Close

A Boeing Co. 787 Dreamliner jet operated by Japan Airlines Co., right, is towed back to the gate after a fuel leak at... Read More

Photographer: Bizuayehu Tesfaye/Bloomberg

A Boeing Co. 787 Dreamliner jet operated by Japan Airlines Co. is towed back to the gate at Logan International Airport in Boston, Massachusetts, U.S., on Tuesday, Jan. 8, 2013. The plane leaked fuel while taxiing for departure today in Boston, in the second incident involving the Boeing Co. aircraft in two days. Close

A Boeing Co. 787 Dreamliner jet operated by Japan Airlines Co. is towed back to the gate at Logan International... Read More

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