Boeing plans to continue construction of 787 jetliners

Associated Press photo -- An All Nippon Airways flight sits at Takamatsu airport in Takamatsu, Japan, Wednesday after it made an emergency landing and passengers evacuated. The plane has been grounded worldwide by regulators and airlines, while an investigation into problems with the 787 continues.
Associated Press photo -- An All Nippon Airways flight sits at Takamatsu airport in Takamatsu, Japan, Wednesday after it made an emergency landing and passengers evacuated. The plane has been grounded worldwide by regulators and airlines, while an investigation into problems with the 787 continues.

Boeing plans to keep building its flagship jetliner while engineers try to solve battery problems that have grounded most of the 787 fleet.

It’s not clear how long the investigation — or the fix — will take. But it won’t be cheap for Boeing or for the airlines that had sought the prestige of flying the world’s most sophisticated passenger plane.

Boeing’s newest jet was grounded worldwide Thursday after one suffered a battery fire and another had to make an emergency landing because pilots smelled something burning. Airlines and regulators canceled all Dreamliner flights.

The groundings were a sign of how seriously regulators take any threat of an in-flight fire. National Transportation Safety Board photos of the battery container from a Jan. 7 fire on a Japan Airlines plane showed a blue box with black smudges and blackened wiring and batteries inside.

Boeing currently builds five 787s per month. It hasn’t delivered any since Jan. 3, before the plane started experiencing a spate of problems that also included fuel and oil leaks, a cracked cockpit window and a computer glitch that erroneously indicated a brake problem.

Boeing spokeswoman Lori Gunter said no deliveries had been scheduled during that time. She declined to discuss planned deliveries.

Regardless of delivery schedules, it’s cheaper for Boeing to build the planes and then go back and fix them than it is to shut down production.

All Nippon Airways said its 18th 787 is due at the end of this month, but it won’t take delivery until 787 flights resume.

The troubles with Boeing’s 787 Dreamliner are drawing an unwelcome spotlight for the Japanese maker of the powerful lithium-ion batteries that have become the focus of investigations into onboard fire risks.

GS Yuasa Corp., of Kyoto, Japan, said it began working Thursday with investigators probing the cause of recent problems with the 787.

An overheated leaking battery prompted an All Nippon Airways jet to make an emergency landing on Wednesday, leading regulators in Japan, the U.S., India and Europe to ground the planes.

Safety experts say the leakage of electrolyte from the ANA jet was cause for serious alarm because the very corrosive fluid can damage electrical wiring, components and even support structures for the plane’s composite body.

“The cause of the problems is unclear,” said Yasushi Yamamoto, a spokesman for GS Yuasa. “We still don’t know if the problem is with the battery, the power source or the electronics systems,” he said.

The FAA grounding was a stunning setback for Boeing. The plane has been in the works since 2003, a time when modern jetliners were built of aluminum and powered many of their internal systems with incoming air from outside the plane.

Boeing engineers figured they could get better fuel efficiency by making the plane out of carbon composites, a sort of lightweight, high-tech plastic. And they used electricity rather than air because it saved space and weight.

The 787 was tested extensively both before and after its first test flight in 2009. The FAA said its technical experts logged 200,000 hours testing and reviewing the plane’s design before it was certified in August 2011.

Six test planes ran up some 4,645 flight hours. About a quarter of those hours were flown by FAA flight test crews, the agency said in 2011.

New 787s sell for more than $200 million at list prices. For that kind of money, airline customers get warranties and in some cases a promise from Boeing to cover costs if the plane is grounded.

Those agreements vary from customer to customer, so it wasn’t known how much the grounding would cost Boeing. Analysts pointed out that there are few airplanes in the size range of the 787 that are available to be leased to replace 787s.

Even analysts who are most critical of Boeing believe that the company will eventually resolve the problems and the 787 will deliver on its promise.

Still, Jefferies analyst Howard A. Rubel estimated that re-working the jet to fix electrical problems could cost anywhere from $250 million to $625 million. He emphasized Thursday in a note to investors that little is known about what it will take to fix the problem. He also noted that some of Boeing’s suppliers may bear some of that cost.

Fitch Ratings said the grounding will hurt Boeing’s profits and cash flow, “but the company has the financial strength to withstand negative developments in the program.”

Barclays analyst Carter Copeland predicted “relatively limited” impact on Boeing’s finances or production. That might change if the groundings last for weeks or months, “but this isn’t yet what we expect,” he wrote Thursday in a note.

Boeing Co. shares rose 92 cents Thursday to close at $75.26. Before the first battery problem arose, they closed Jan. 4 at $77.69.