Thursday, January 17, 2013

Aviation analysts ponder extent of Boeing 787 issues


The series of accidents that has grounded Boeing 787 Dreamliners in Japan has led some analysts to suggest it might be more than a simple question of teething problems.

Shares in companies that work on the 787 programme, some of which are in Japan and France, fell on Wednesday after a battery problem generated a smoke alert in one of the planes. The domestic flight had to be diverted to Takamatsu in southwestern Japan.

Japanese Transport Minister Akihiro Ota described it as a "serious incident that could have led to a serious accident". Both Japanese airlines operating the plane grounded them for 24 hours.

The US Federal Aviation Authority has already launched a probe into 787 problems.

Aviation analyst Sandy Morris at the London-based group Jefferies International said this latest mishap surpassed the kind of glitch expected when a new plane enters service.

"After thousands of test flight hours and probably far, far more hours of testing systems on the ground during development and before installation, it is going to be a puzzle on 'why now' grounds that a significant problem only surfaces when a new aircraft has entered airline service," Morris said in a research note.

One reason for problems encountered by All Nippon Airways (ANA) and Japan Air Lines (JAL) might be that they use similar procedures to start, shut down, and recharge lithium batteries used in the 787, he noted.

But "even if it does turn out to be an operational issue, there is, however, no good explanation why safety mechanisms have failed to prevent fire, in our view," Morris said.

Christophe Menard at Kepler Capital Markets said problems with the 787 since it entered service in November 2011 had been played down given that minor technical problems were common with new aircraft.

But "the repetition of incidents is extremely worrying", he added.

Questions might be raised about the plane's reliability during inter-continental flights and plans to ramp up production of the plane could be delayed further, Menard said.

The first 787 delivery, to ANA, was delayed by three years.

Passenger aircraft routinely reveal glitches that have to be corrected as the planes enter service.

Airbus' A380 superjumbo jet made its commercial debut in 2007, but suffered serious engine problems in late 2010.

Last year, tiny cracks were discovered in the plane's wings that Airbus, which is Boeing's chief rival, is still working on.

The Boeing 777 was temporarily grounded in 1997, and Mike Sinnett, Boeing's chief engineer on the 787 programme, said a week ago that the reliability of the 787 was on a par with that experience.

The 777, Boeing's last all-new airliner, entered service in 1995.

Analysts at Leeham News, which specialises in aerospace news, "advised caution in drawing conclusions" regarding the 787 problems.

But they added that "if there are many more (or perhaps any more) such incidents, we would not be surprised if more than spot, voluntary groundings occur."

Boeing is not the only company to suffer from problems with its new plane, which is the fruit of an innovative production network involving suppliers in many countries.

Shares in some Japanese companies, in particular GS Yuasa which makes lithium batteries for the 787, plunged on Wednesday in trading on the Tokyo stock exchange.

In Paris, shares in Thales, which provides the electrical system based on GS Yuasa batteries, and those in Zodiac Aerospace, a part supplier that is counting on increased production of the 787, also fell back.

Sandy Morris at Jefferies warned that if the 787's problems resulted in significant changes to aircraft certification procedures, it might affect even a rival plane still being developed by Airbus.

"The A350 XWB could also be delayed," Morris said.

SOURCE

Batteries seem to be the big problem now. And the report hit the nail as to why are problems surfacing only now and not during the numerous tests and checks before pushing the plane out for commercial service. Even if it is a usage problem, why did the safety mechanism not prevent a fire from starting?

It won't be easy troubleshooting for sure, but this calls for quick actions to prevent further mishaps.


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