Boeing Tells Airlines That Dreamliner Deliveries Could Slip

Boeing Co. has told airlines expecting to receive new 787 Dreamliners in coming months that deliveries may be delayed as regulators investigate overheating batteries that prompted the model’s grounding worldwide.

U.K. tour operator Thomson Airways said it’s arranging to use other planes to serve Florida and Mexico if its first 787 is delayed beyond March. Norwegian Air Shuttle AS said the handover of an initial 787 in April may slide and that a second due in June may also be affected.

The Dreamliner fleet has been sidelined since Jan. 16 following a lithium-ion battery fire on a Japan Airlines Co. plane in Boston and an emergency landing by an All Nippon Airways Co. jet in Japan. U.S. regulators said yesterday that Boeing can conduct test flights to help determine the cause, as evidence mounts that the battery may have to be redesigned.

“We have informed our customers expecting 787 deliveries in the near-term that those aircraft either have been or are at risk of being delayed,” the Chicago-based planemaker said in e-mailed comments. “Boeing deeply regrets the impact that recent events have had on the schedules of our customers and their passengers.”

Boeing has dropped 1.5 percent to $76.56 in New York since Jan. 6, the day before the Boston fire. The shares now trade at a 21 percent discount to European Aeronautic Defence & Space Co., the parent of competitor Airbus SAS. That compares with an 8 percent discount on a price-earnings basis at the end of last year.

No Dates

Oslo-based Norwegian Air said in a statement that Boeing has not given it new handover dates or provided written confirmation of the holdups.

“Although a potential delay is completely out of our control, we would like to apologize in advance if the Dreamliner isn’t ready for Norwegian’s first long-haul flights,” Chief Executive Officer Bjorn Kjos said in a statement.

As one of Boeing’s biggest European customers, Norwegian said it expects the manufacturer to do “everything in its power” to get the 787 ready for delivery as soon as possible. To allow for new services to New York and Bangkok, the carrier said it will obtain alternative aircraft through a leasing company for as long as three months.

No provider has been selected, though the carrier’s first two 787s are owned by International Lease Finance Corp.

Thomson, a unit of Tui Travel Plc, also said that Boeing has provided no new delivery dates.

British Airways

London-based British Airways, which is due to start receiving Dreamliners from May, said in an e-mail that discussions with Boeing continue. The carrier has 30 jets on order and said it’s committed to the model.

Boeing said today it’s staying in close communication with its customers as it works to develop a plan to resume the 787 pipeline, adding that it doesn’t discuss specific deliveries. European safety officials are due to visit Boeing next week to review progress of the probe.

U.S. National Transportation Safety Board Chairman Deborah Hersman said yesterday that U.S. regulators’ assumptions in certifying the 787’s lithium-ion batteries “must be reconsidered” after investigators found a short circuit in one cell set off a chain reaction that destroyed the unit.

What’s known so far suggests Boeing will have to come up with a new design, John Hansman, an aeronautics professor at the Massachusetts Institute of Technology, said in an interview.

‘Went Wrong’

“They weren’t supposed to have a fire, and they had a fire, so something went wrong,” Hansman said. “By doing it this way, the NTSB has forced Boeing to do something significant, to prove that they’re doing something different with the battery.”

Boeing’s problems with the lithium-ion unit have prompted Airbus to develop plans to jettison that power source in its new A350 model and use standard nickel-cadmium batteries instead, said two people familiar with the situation.

Should Toulouse, France-based Airbus opt to switch to a traditional battery now, the change could be accomplished with a few months’ delay, one of the people said, while waiting until Boeing resolves the 787 issue could put back the A350 significantly.

Before it's here, it's on the Bloomberg Terminal.