By Karen Jacobs
July 18 Airlines are keeping Boeing's 787 Dreamliner flying, and are sticking with their orders for the new jet as safety investigators look for what sparked a fire in one of the planes while it was parked at London's Heathrow Airport.
The fire caused extensive heat damage to the rear fuselage, sent smoke throughout the cabin and scorched the outer hull, according to Britain's Air Accidents Investigation Branch, which is leading the probe.
The AAIB said there appeared to be no connection between the latest fire and lithium-ion batteries that burned on two 787s in January, prompting regulators to ground the fleet for 3-1/2 months.
Last week's fire aboard the Ethiopian Airlines jet has raised concerns about a possible problem in the plane's complex electrical system, which analysts said could be a concern for investors.
The AAIB is looking at a rescue beacon made by Honeywell International as one of several components that possibly sparked or contributed to the fire.
None of the 13 airlines that fly the 787 have grounded it, though Japanese airlines said they have inspected their planes. And airlines have not canceled orders. AMR Corp's American Airlines and Delta Air Lines - two of the biggest U.S. buyers - said their orders remain firm.
American said it is on track to take delivery of its first 787 in the second half of 2014, one of 42 787s on order. Delta has 18 787s on order, and the first delivery is in 2020.
Britain's Thomson Airways, U.S. carrier United Continental and Poland's LOT have said they will continue to fly their Dreamliners, while others, such as Virgin Atlantic have confirmed they will stick to their plans to buy the aircraft.
Joseph Del Balzo, a former acting administrator at the Federal Aviation Administration who is now an aviation consultant, said that as long as government safety authorities approve the use of the plane, there's no need for airlines or consumers to stray away from it.
"Knowing the FAA, and knowing the people of FAA and how conservative they are, they would have jumped on this immediately" if there were serious safety concerns in light of the latest incident, Del Balzo said. "The fact that they haven't says a lot."
Del Balzo said he felt the 787's order book was unlikely to be hit by cancellations. An aircraft with new technology such as the 787 "will be faced with problems that need to be corrected as you go," he said. "I believe that's what's happening here."
PERFORMANCE AND ECONOMICS
Richard Aboulafia, aviation consultant with the Virginia-based Teal Group, said he did not expect the airlines to start cancelling orders as long the 787 continued to meet airlines' expectations for a 20 percent reduction in fuel consumption and had the ability to make long range flights.
He said airlines usually based cancellation decisions on the performance and economics of the plane, leaving safety issues to government regulators.
"There's risk, but it's not a chronically bad aircraft," he said. "The only thing that makes people cancel plane orders is on the basis of economics and performance. Safety is another matter. If somebody else approves it, they'll approve."
He said airlines never canceled their orders for the DC-10, the only U.S. jet before the 787 to have its certification revoked after a crash that cost hundreds of lives. But the successor plane, the MD-11, faced outright order cancellations several years later because it failed to meet performance expectations for fuel burn and range, he said.