Airlines that own the Boeing 787 Dreamliner scrambled to rearrange flights
Thursday after regulators around the world grounded the plane for fear of more
battery-related fires.
Meanwhile, industry experts considered the potential damages that Boeing
Co. might owe airlines for delivering a plane they now cannot fly.
On Wednesday, a second major incident involving "a potential battery fire
risk" prompted the Federal Aviation Administration to temporarily ground all
787s operated by U.S. carriers, which technically applied to the six operated
by United Airlines because no other U.S. carrier has the plane yet. However,
Dreamliners also were grounded in Japan, Europe, India and elsewhere.
The FAA gave no indication of how long the grounding will last, although
experts said it could be days or weeks rather than months. The Dreamliner
grounding was the first since the McDonnell Douglas DC-10 had its
airworthiness certificate suspended following a deadly crash in Chicago in
1979, analysts said.
Boeing has sold about 850 of its new aircraft, with 50 delivered to date.
About half of those have been in operation in Japan, but airlines in India,
South America, Poland, Qatar and Ethiopia, as well as United Airlines in the
United States, are also flying the 787, which has a list price of $207
million.
Boeing said in a statement it was confident the 787, a groundbreaking
plane delayed for years by design and production problems, was safe, and it
stood by the plane's integrity.
Some customers are restless.
Because of the groundings, LOT Polish Airlines scrapped its inaugural
flight from O'Hare International Airport to Warsaw on Wednesday. LOT also
canceled a welcoming ceremony that was to include Polish dignitaries and Mayor
Rahm Emanuel when the Dreamliner arrived at O'Hare from Warsaw.
LOT officials said they would seek compensation from Boeing for having
its two Dreamliners grounded. It will take delivery of the three additional
Dreamliners it expects by March only if the problems are resolved, the airline
said.
Last month, Qatar Airways Chief Executive Akbar Al Baker said he would
seek compensation from Boeing after a 787 his airline owns was grounded. "We
will demand compensation (from Boeing)," he said. "We are buying planes from
them to use them, not to put in a museum."
United Airlines on Thursday would not say whether it would seek financial
damages from Boeing, which is headquartered just blocks away in Chicago.
However, the effect of taking six Dreamliners out of service, representing 10
flights per day, is slight, given the world's largest airline has 6,000
flights per day and regularly swaps aircraft for various operational reasons.
But American Airlines, which this week placed firm orders for 42
Dreamliners, pending U.S. Bankruptcy Court approval, said it was sticking to
its plans.
"We are in constant dialogue with Boeing. We believe the 787 is a great
aircraft," said Virasb Vahidi, chief commercial officer for American.
New planes often have warranties, similar to those of new cars bought by
consumers, said Bob McKenzie, an attorney at Chicago law firm Arnstein & Lehr,
who besides helping clients buy aircraft and resolve maintenance problems with
sellers also is a commercial pilot and flight instructor.
"The airlines that bought these planes would be looking to repair these
planes in a warranty fashion, like you would on a car," he said. It's unclear
whether the FAA's grounding of the planes could affect such a warranty clause,
he added.
Potential damages are hard to estimate because Boeing and regulators are
still working on what fix might be required for the Dreamliner battery, which
starts an onboard power generator.
Compensation could come in two forms. One is the direct cost to repair
the planes and the other is for the loss of use of the planes, McKenzie said.
Compensation would likely start with a demand from the airlines, once
they know the scope of the damages and how long planes are out of service, he
said. Boeing can then reject the demand, make a counteroffer or "pay their
demands, either because they think they have liability or for public relations
reasons. Most of the time that's where it will get settled in these cases."
"I would think they'll try to make it right with the airlines," McKenzie
said. "Nobody likes to litigate with their customers."
Keeping the 787s on the ground could cost All Nippon Airways alone more
than $1.1 million a day, Mizuho Securities calculated, noting the Dreamliner
was key to the airline's growth strategy.
Richard Aboulafia, vice president of analysis at the Teal Group, noted
that any payments would be "more drops in a very big bucket," considering the
compensation Boeing has already paid for delivering the plane more than three
years late.
As far as Boeing's reputation, the problems so far "haven't damaged them
too grievously," he said. "This will be remembered as yet another painful
episode in the very difficult development process for what will ultimately be
a very good jet."
Boeing shares closed Thursday at $75.26, up 1.2 percent.
Reuters contributed.
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News Column
Boeing May Have to Pay Up as Airlines Adjust to Dreamliner's Grounding
Jan. 18, 2013
Gregory Karp
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Source: (c)2013 Chicago Tribune Distributed by MCT Information Services
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