Airlines around the world pull Boeing 787s out of service

Airlines around the world pull Boeing 787s out of service

POSTED: Wednesday, January 16, 2013 - 8:25pm

UPDATED: Wednesday, January 16, 2013 - 8:26pm

Airlines around the world pulled Boeing 787s out of service Wednesday as the Federal Aviation Administration directed U.S.-registered airlines to keep Dreamliners on the ground.

United Airlines, the only U.S. carrier flying Dreamliners, said it would stop operating the aircraft. And LAN, a Chilean airline with three 787s, also said it was suspending service.

The moves comes on the same day that two Japanese airlines -- All Nippon Airways and Japan Airlines -- grounded their Dreamliner fleets due to a fire risk linked to the planes' batteries. Those decisions came after an All Nippon Airways 787 made an emergency landing in Japan Wednesday when a battery alarm signal activated on the plane.

More than three-quarters of the 50 Dreamliners delivered by Boeing have now been grounded, with more regulators and airlines expected to follow the FAA's lead and remove the planes from service.

Boeing shares sank 2% in after-hours trading Wednesday, after falling 3.4% during the trading day. Shares had previously been resilient in the face of this month's negative publicity over the Dreamliner.

"Before further flight, operators of U.S.-registered, Boeing 787 aircraft must demonstrate to the Federal Aviation Administration that the batteries are safe and in compliance," the FAA said Wednesday evening. The agency added that it had alerted authorities in other countries to the problem.

Boeing CEO Jim McNerney said in a statement that the company "is committed to supporting the FAA and finding answers as quickly as possible," and is working "around the clock" to address the issue.

"We will be taking every necessary step in the coming days to assure our customers and the traveling public of the 787's safety and to return the airplanes to service," McNerney said.

Boeing said the batteries in question are made by Japan's GS Yuasa, under a subcontract to France-based Thales.

The timeline for bringing the planes back into service is murky. One airline, Japan Airlines, has already said it will keep its fleet grounded through at least Friday. Japanese regulators said Thursday they would fall into step with the FAA.

Michael Derchin, an analyst with CRT Capital Group, said he was "surprised" by the FAA's decision to ground the planes, but that he did not expect the issue to pose a long-term problem for Boeing.

"Pretty much all new aircraft have run into some kind of teething problems," Derchin said. "Once they get it under control and the planes are back in the air and no incidents occur, everybody will forget about it, but right now, they have to deal with it as quickly as possible."

Boeing has delivered 50 Dreamliners so far and has more than 800 additional orders from airlines around the world that will take years to fill. The first of the long-delayed Dreamliners was put into service by All Nippon in October 2011, and the planes flew without major problems for more than a year.

But the Dreamliners have been involved in a series of incidents over the past 10 days, including a battery fire, a cracked windshield, two fuel leaks and a braking system problem. The emergency landing in Japan heightened concerns about the planes' reliability.

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