WRAPUP 2-Boeing Dreamliner incidents raise concerns about jet

Wed Jan 9, 2013 2:14am EST

By Alwyn Scott
    NEW YORK, Jan 9 (Reuters) - Boeing Co's 787
Dreamliner jet on Tuesday suffered its second mishap in two
days, with the same airline and at the same U.S. airport - the
latest in a series of setbacks that have heightened safety
concerns over the new aircraft.
    A fuel leak forced a 787 operated by Japan Airlines 
to cancel takeoff at Boston's Logan International Airport, a day
after an electrical fire on another 787 after a JAL flight to
Boston from Tokyo.
    Asian customers rallied behind the U.S. planemaker, saying
the incidents were glitches that can happen on new planes and
confirming they had no plans to scale back or cancel orders for
the aircraft, which has a list price of $207 million.
    Japan is by far the biggest customer for the Dreamliner to
date, with JAL and All Nippon Airways (ANA) operating a
total of 24 of the 49 new planes delivered to end-December. The
aircraft entered commercial service in November 2011, more than
three years behind schedule after a series of production delays.
Boeing has sold 848 of the planes.
    JAL spokesman Kazunori Kidosaki said the carrier, which
operates seven Dreamliners, had no plans to change orders it has
placed for another 38 aircraft. ANA, which has 17 Dreamliners
flying its colors, said it was sticking with its orders for
another 49 of the planes, spokesman Etsuya Uchiyama said.
    
    State-owned Air India, which on Monday took delivery of the
sixth of the 27 Dreamliners it has ordered, said precautionary
measures were already in place and its planes were flying
smoothly. "It's a new plane and some minor glitches do happen.
It's not a cause of concern," said spokesman G.Prasada Rao.
    Air China , which sees the 787 as a way
to expand its international routes, and Hainan Airlines
 also said they were keeping their orders for 15 and
10 of the planes respectively. China Southern Airlines
, which has 10 787s on order and should be the first
Chinese airline to fly the plane, was not immediately available
to comment.
    "New airplanes more or less will need adjustments and
currently we have no plans to swap or cancel orders," said an
executive at Hainan Airlines, who was not authorized to talk to
the media and did not want to be named.
    Delivery of the aircraft to Chinese carriers has been held
up as the local aviation regulator has yet to approve the plane.
 Hainan Airlines expects to take delivery of its
first 787 around the mid-year - some 10 months late.
    Other carriers already flying the Dreamliner are Ethiopian
Airlines, Qatar Airways, LAN Airlines, LOT Polish
Airlines and United Airlines, according to
Boeing data.    
    
    40 GALLON SPILL
    The fuel leak on Tuesday was noticed at about 12:25 p.m. ET
(1725 GMT), after the plane had left the gate in preparation for
take-off to Tokyo. About 40 gallons spilled, and the jet was
towed back to the gate, where passengers disembarked, said
Richard Walsh, a spokesman for state transportation authority
Massport. The plane departed about four hours behind schedule
and was due to arrive at the Japanese capital's Narita airport
on Wednesday evening.
    No passengers or crew were injured in either incident,
though firefighters were called out on both occasions. 
    Boeing shares fell nearly 2.7 percent on Tuesday, following
a 2 percent drop on Monday - wiping around $2.8 billion off its
market value, or more than a dozen Dreamliners at list price.
    While many Wall Street analysts rate Boeing stock a 'buy' or
'outperform' - the manufacturer has delivered jets faster than
the market predicted - some noted the potential for the
combination of a fire and a fuel leak to affect public
perception of Boeing and the new aircraft.
    People working at OG Travel and Eurex, travel agents in
Tokyo, said they had not seen any impact on reservations on
flights using the 787 aircraft. "I've not heard of any
cancellations following these incidents," Eurex staffer Yasuhiro
Hirashiki told Reuters.
    Carter Leake, an analyst at BB&T Capital Markets in
Virginia, downgraded Boeing shares, noting that fires are
potentially lethal and electrical issues are tough to solve,
though he and others stopped short of calling it a game changer
for the Seattle-based manufacturer.
    "We're getting to a tipping point where they go from needing
to rectify problems to doing major damage control to the image
of the company and the plane," said Richard Aboulafia, a defense
and aerospace analyst with Teal Group, a consulting firm based
in Fairfax, Virginia. 
    "While they delivered a large and unexpected number of 787s
last year, it's possible that they should have instead focused
on identifying glitches and flaws, rather than pushing ahead
with volume production," he said.
    
    BATTERY FIRE
    Monday's fire occurred on a 787 plane that had just arrived
from Tokyo and whose 183 passengers and crew had departed. 
    The National Transportation Safety Board said on Tuesday a
battery in the auxiliary power unit aboard the plane jet had
suffered "severe fire damage" and that surrounding damage was
limited to components and structures within about 20 inches. It
said the power unit was operating when the fire was discovered.
    Shares in GS Yuasa Corp, the Japanese firm that
makes the Dreamliner batteries, fell around 5 percent in Tokyo
on Wednesday after dropping 4 percent a day earlier.
    Boeing said it was cooperating with the investigations, but
it would be premature to go into detail as the fire probe was
ongoing.
    "However, nothing we've seen in this case indicates a
relationship to any previous 787 power system events, which
involved power panel faults elsewhere in the aft electrical
equipment bay," the company said, referring to the area where
the fire occurred. 
    The Wall Street Journal, citing a source, reported that
United Airlines found improperly installed wiring in 787
electrical components associated with the auxiliary power unit,
the same electrical system that caused Monday's fire. United
spokeswoman Christen David said the carrier inspected its 787s
after the Boston fire, but she declined to discuss the findings,
or to confirm the Journal report.
    The fuel leak comes after the Federal Aviation
Administration last month ordered all 787s to be inspected after
leaks were found on two aircraft, stemming, it said, from
incorrectly assembled fuel line couplings that could result in
loss of power or an engine fire.
    Mechanical problems are not uncommon when new planes enter
service and they often disrupt airline schedules, experts said.
    "I think we're dealing here with a situation where this
aircraft is over-scrutinized for a number of reasons, including
the birth difficulties," said Michel Merluzeau, managing partner
at G2 Solutions, a boutique defense and aerospace consulting
firm in Seattle. 
    "Don't get me wrong. A battery fire is a very, very serious
event. Especially a lithium-ion battery," he added. "And we
don't know what the problem is. But the 787s is still a very
safe aircraft to fly."
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