U.S. safety regulators are poised to approve within days a plan to allow Boeing Co (BA.N) to begin flight tests of the 787 Dreamliner with a fix for its volatile batteries, a critical step towards returning the grounded aircraft to service, two sources familiar with the matter said on Wednesday.
The Federal Aviation Administration FAA.L is expected to sign off on a "certification plan" allowing Boeing to carry out the flight tests to determine if authorities can lift a flight ban that sent shockwaves around the airline industry seven weeks ago.
"You could see the 'cert plan' approved in the next few days," one of the sources said. Both spoke on condition of anonymity as the discussions are confidential.
The FAA said it would announce the plan when approved, and U.S. Transport Secretary Ray LaHood told the Wall Street Journal he wanted a "thorough review" before a final decision on resuming commercial flights for the passenger jet.
Boeing declined to comment on the FAA's timetable for flight tests. But spokesman Marc Birtel said: "The FAA has indicated they are evaluating our proposal for a permanent fix to address the 787 battery issue and we are encouraged by the progress being made toward resolving the issue and returning the 787 to flight."
Shares in GS Yuasa Corp (6674.T), the Japanese firm that makes lithium-ion batteries for the 787, jumped almost 11 percent in Tokyo on Thursday, touching 11-month highs above 444 yen. At the midsession, the stock was on track for its biggest one-day gain in 16 months.
Regulators grounded the 50 Dreamliners in use by airlines in mid-January after lithium-ion batteries burned aboard two planes - banning airlines from flying the 787 and stopping Boeing from delivering them. Although its factories continue to make the 787, Boeing is losing an estimated $50 million a week while the planes are grounded.
On February 22, Boeing formally proposed battery design modifications and new physical protection systems to contain flammable materials. But it is not yet allowed to conduct flight tests of the system. The measures include a stronger, stainless steel battery containment box and a tube to vent fumes and heat outside the plane should a fire occur in flight.
Meanwhile, the National Transportation Safety Board NTSB.L is expected to issue an interim report on Thursday on the 787 battery fire that occurred at Boston's Logan International airport. The report is not expected to include analysis, recommendations for FAA action or a finding on what caused the fire. The second battery failure is being investigated by Japanese authorities.
Despite uncertainty over the cause of the battery problems, the chief executive of 787 customer Qatar Airways said in Germany on Wednesday he expected Boeing to come up with a solution "imminently" and this was awaiting FAA approval.
JUST ONE STEP
The FAA's permission for test flights is only one step in an approval process that must contend with any political fallout from the NTSB findings and any potential political developments.
The NTSB raised questions last month about the process the FAA and Boeing used to approve the use of lithium-ion batteries on the 787 and suggested a review.
"We need to understand what tests were done and who was certifying those tests, and again how they were verified - not just by Boeing, but by the regulator as well," NTSB Chairman Deborah Hersman said on February 8, referring to the battery and other key parts made in a long, global supply chain.
Boeing said on Monday it can move "really fast" to get the Dreamliner back into the skies once the FAA approves the fix. But the FAA faces unusually tough obstacles in approving it for flight - one of them brought on by the agency's own boss. LaHood promised early in the crisis that the Dreamliner would not resume flying until regulators were "1,000 percent sure" of its safety.
As no aircraft is 100 percent safe "it is going to be a challenge for the FAA to dial back from some of the overheated rhetoric," said Richard Aboulafia, an aerospace analyst at the Teal Group in Virginia.
Aboulafia estimated it would take at least four months for the 787 to be cleared to fly if the FAA approves flight tests soon. If flight testing approval takes longer, it could take 6-9 months before the 787 is back in the air.