U.S. FAA Prepared to Approve Boeing’s 787 Battery FixAlan Levin and Susanna Ray
Boeing Co.’s 787 Dreamliner is nearing the end of a three-month grounding, with U.S. regulators ready to approve proposed changes to its lithium-ion batteries, according to people briefed on the decision.
The U.S. Federal Aviation Administration has agreed that a hardened case, added circuitry protection and a system to vent smoke will ensure safety, said the people, who asked not to be identified because they aren’t authorized to discuss the matter. It’s unclear when the decision will be announced, they said.
Ending the first U.S. grounding of an entire model in 34 years is pivotal for Chicago-based Boeing, which has had deliveries halted, and for the eight airlines with Dreamliners in their fleets. Regulators around the world followed the FAA’s Jan. 16 directive to park the planes after two incidents in which batteries smoldered and emitted fumes.
“It’s a very big deal,” said Michael Derchin, an analyst at CRT Capital Group LLC in Stamford, Connecticut, who has a buy rating on Boeing. “Everybody’s life has been on hold since it occurred.”
A Boeing spokeswoman, Yvonne Leach, declined to comment on the FAA’s pending moves.
The transport ministry in Japan, where two airlines have almost half the 49 Dreamliners in service, is in the final stage of its own probe, Shigeru Takano, the ministry’s director in charge of air transport safety, said at a briefing in Tokyo today.
Takano declined to comment on the FAA decision. Hiroharu Nakano, a spokesman for the battery supplier, GS Yuasa Corp. in Kyoto, Japan, also declined to comment.
Boeing rose 1.8 percent to $87.69 at 9:37 a.m. in New York. Tokyo-based ANA Holdings Inc., the largest operator of the 787s, rose 1 percent to 206 yen today while GS Yuasa gained 1.5 percent to 410 yen.
Boeing is working to double 787 production in 2013 to help fill a backlog of more than 800 orders for a plane whose list price starts at about $207 million. Eight carriers have received the jet since it began commercial service in late 2011 after more than three years of delays.
The FAA last grounded an entire model in 1979, when it revoked certification of the Douglas DC-10 after inspections discovered wing damage similar to what led to a crash in Chicago that killed 271 people. That order was lifted a month later.
The trigger for regulators’ actions in the Dreamliner case were battery faults in January that caused a fire in a Japan Airlines Co. 787 in Boston and forced an emergency landing by an ANA plane in Japan days later.
While Boeing hasn’t been able to replicate the faults in those incidents, it has said the proposed fixes to the battery system would eliminate the possibility of a fire, prevent the spread of any overheating and vent any liquid or vapors outside the plane.
FAA Administrator Michael Huerta said at a Senate hearing April 16 that the planemaker has completed all the tests it agreed to conduct on the redesigned batteries. The power cells start a backup generator and are used when the plane is on the ground.
Dozens of completed Dreamliners remain parked around Boeing factories awaiting delivery, and Leach, the spokeswoman, said work on assembling the 115th plane is under way. Boeing kept production steady at five jets a month during the grounding.
Handing over jets to buyers is important for planemakers, because that’s the step at which airlines typically make bulk payments. Boeing is targeting a production increase to 10 Dreamliners a month by year’s end to whittle down the backlog.
Boeing’s own pilots have to first fly each 787 to test its systems, followed by the airlines’ pilots, before each delivery can be made. The FAA began allowing those so-called functional test check flights to resume yesterday, starting with a jet intended for ANA. The Japanese carrier was the first to fly the new model.
Japan Airlines said last month the cancellation of Dreamliner flights will cut operating profit by 1.1 billion yen ($11 million).