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Boeing Studies 787 Fire, Evaluates Schedule Effect

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Boeing 787 Program Chief Scott Fancher
Boeing 787 program chief Scott Fancher told reporters, “We’re going to have to evaluate what the corrective action is and what schedule impact there might be.” Photographer: Tom Goertel/Boeing via Bloomberg

Nov. 11 (Bloomberg) -- Boeing Co. should know “fairly quickly” whether this week’s fire aboard a 787 Dreamliner will affect the plane’s entry into service, which is almost three years late, Chief Executive Officer Jim McNerney said today.

All six test jets have been grounded indefinitely while Boeing analyzes data from the Nov. 9 emergency landing in Texas. The fire began in a power-control panel in an electrical-equipment bay that is part of the jet, not in flight-test gear, Scott Fancher, the 787 program chief, said yesterday.

“We’re going to have to evaluate what the corrective action is and what schedule impact there might be,” Fancher told reporters in Everett, Washington, overlooking the 787 factory floor. “It’s too early to have that information.”

Fancher declined to say how much wiggle room Chicago-based Boeing has in its timetable to start deliveries of the Dreamliner in the first quarter of next year. McNerney, speaking at the Wings Club in New York, said further details weren’t yet available. The 787’s commercial debut has been delayed six times as Boeing struggles with new composite-plastic materials, parts shortages, redesign work and a greater reliance on suppliers.

Analyzing flight data from the plane will take several days, Boeing said yesterday. The company has sent about a dozen other engineers and flight-test personnel to Laredo, Texas, where the plane remains for the investigation.

Electrical Systems

The 787 test jets are based in Seattle and fly around the world in search of various weather conditions for tests required by the Federal Aviation Administration before the plane can carry passengers. The role of the plane in the Laredo incident is to certify electrical systems, autopilot controls, avionics, propulsion, and stability and control.

Even in a best-case scenario, with no fundamental electrical flaws, further delays are “inevitable” because it will be difficult to continue those specific tests with repairs under way, said Douglas Harned, an analyst with Sanford C. Bernstein & Co. in New York. He downgraded his recommendation on Boeing shares to “market perform” from “outperform” today, citing the increased risk.

Harned pushed his estimate for the first delivery of the plane back to the third quarter of 2011 and reduced his 2011 delivery projection to 8 from 29. He said he expects Boeing’s production ramp-up target of 10 Dreamliners a month in 2013, from 2 now, to be set back by a year, pressuring profit margins.

First Delivery

Fancher said engineers haven’t yet seen anything to suggest a fundamental design issue with the plane’s new electrical system, which is built by United Technologies Corp.’s Hamilton Sundstrand unit. The Dreamliner uses five times as much electrical power as traditional airliners to save on fuel.

“A fire is a serious event,” Fancher said. “We’ve not seen a failure like this on a 787 before.”

Boeing extended declines since the fire, falling $1.70, or 2.5 percent, to $65.37 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have gained 21 percent this year.

All Nippon Airways Co., set to be the first 787 operator, said today that it still expects to get its first jet in February.

“There is no change to the delivery schedule,” President Shinichiro Ito said in Tokyo at a regularly scheduled press briefing. “We are watching 787 developments closely.”

A power-control panel on the 787 must be replaced, and further inspections are under way, Fancher said. The fire was extinguished within the equipment bay, thanks to non-flammable materials, and didn’t spread as the plane approached the Laredo airport at the end of a test flight, Fancher said.

Remained in Command

While some flight-deck displays flickered and power systems were disrupted, pilots didn’t lose their primary controls, Fancher said. The pilots felt that they remained in command of the aircraft, he said.

A turbine spun by onrushing air deployed from the bottom of the jet to provide backup power, Fancher said. The turbine is triggered automatically under “a number of conditions,” and its activation doesn’t necessarily mean all power was lost, he said.

“We do not believe this will prove to be a major redesign issue, given the 2,300 flight hours accumulated in the flight-test program and years of development and lab testing by Boeing and related suppliers,” Peter Arment, an analyst with Gleacher & Co. in Greenwich, Connecticut, wrote today.

A crew of 42 pilots, engineers and maintenance workers were on the flight to monitor the efficiency of the plane’s system for generating nitrogen, an inert gas pumped into fuel tanks as they empty to curb fire risks. They all safely evacuated down the plane’s emergency slides after it landed, and the only injury was one twisted knee, Fancher said.

To contact the reporter on this story: Susanna Ray in Everett, Washington, at sray7@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

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