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FAA Lifts Grounding Order for Boeing Dreamliner

The Federal Aviation Administration formally lifted the grounding of Boeing’s 787 Dreamliner fleet, effective Friday, ending the embarrassing and costly episode after 14 weeks and two days, reported The State newspaper.  The 787s – some of which are made at a new manufacturing facility in North Charleston – were grounded Jan. 16 following two battery overheating incidents: a battery fire on an empty 787 parked at the gate at Boston airport and then a smoldering battery on a flight in Japan that forced an emergency landing. Neither of those planes was made in the Lowcountry.

The FAA estimates the cost to airlines of modifying each jet with two of Boeing’s beefed-up batteries, containment boxes and venting tubes at $464,678.  For United, the sole U.S. operator of the jet with six 787s in service, that’s a total modification cost of $2.8 million. But the directive notes that this cost “may be covered under warranty” from Boeing. The jetmaker is very likely to pick up this entire cost for all its customers. At just over $23 million for all 50 jets in service worldwide, that’s a small fraction of the cost to the airlines from lost revenue while their planes were grounded.

In a quarterly earnings teleconference with analysts Wednesday, Boeing Chief Executive Jim McNerney said “there are no contractual obligations” to compensate airlines for that lost revenue. “But having said that, there are a few places where we’ll work with our customers,” McNerney added. Rather than cash, that privately negotiated compensation may take the form of price breaks on future maintenance costs or jet purchases.

United took a smaller hit than some other carriers, since it was able to substitute different aircraft from its fleet and did not have to cancel any routes.  The airline’s lost revenue was only about $11 million, Chief Financial Officer John Rainey said on a quarterly earnings call with analysts Thursday.

It will be at least June before all 50 jets already delivered are back in scheduled service and the three-month backlog of undelivered 787s sitting in Everett, Wash., is cleared.  Read More.


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