The future of commercial aviation has been set on hold. The Federal Aviation Administration (FAA) issued an emergency safety order Wednesday evening requiring U.S airlines to suspend operations of all Boeing 787 aircraft. Known as the Dreamliner, the plane was launched more than a year ago to revolutionize civil aviation. The FAA’s decision comes after a series of recent incidents related to the innovative aircraft, increasing international attention on Boeing. Investor confidence has taken a hit; shares of Boeing (NY:BA) fell 3.4% to $74.34 — the biggest drag on the Dow for the day.
January 16 marked Boeing’s 787 latest incident, when Japan’s two biggest airlines grounded all their Dreamliner aircraft for safety checks following an All Nippon Airways emergency landing. The Japanese carrier was the Dreamliner’s first client when it went into service in September 2011; ANA at the moment operates 17 of the 50 Boeing 787 aircraft that have been delivered. FAA’s announcement only applies to United Airlines, since it’s the only U.S carrier to operate the 787.
The first commercial jetliner made primarily of advanced composite materials and focused on fuel efficiency, is Boeing’s trademark fleet. Which makes grim irony of the fact that one of the Dreamliner’s core features — lithium-ion batteries, basic to the model’s vaunted fuel efficiency — is at the core of the FAA’s safety concerns: the 787 will be grounded until Boeing can demonstrate that the batteries in the planes are safe . (Lithium-ion batteries on airplanes have long been of regulatory concern: they can be volatile.) The FAA had supervised the entire development process of the plane and approved the use of lithium-ion batteries when the planes were being built.
The FAA had tried to calm passengers by stating that the plane was safe, but more recently they launched a review of the plane. In the last weeks several issues have affected Boeing’s 787, from a cockpit window crack to fuel leaks from an engine to a battery fire on an empty Japan Airlines (another big customer) plane. The problems may go global: other airlines that operate the Dreamliner include Qatar Airways, United Airlines, Air India and LOT Polish.
True, the hype this aircraft has created could be a factor behind all the news coverage it’s received. The continuous episodes have aroused many doubts regarding the future and the security of the first new airplane of the 21st century, as former Boeing chief executive Jim Albaugh called it when it first launched. Meanwhile, industry-watchers are speculating that these troubles will boost the company’s main rival, Airbus. While the problems the 787 is experiencing could be common to the launch of a new plane, the move by the FAA may encourage international regulators to take similar actions.
The possibility remains that Boeing may have to reevaluate its entire fleet (or even order a design change). Airlines, travelers and investors have their eyes on the airplane regulators and their decision concerning the future of the Dreamliner. A government nay on advanced batteries would have effects reaching far beyond one model and one company.