Boeing sees 787 deliveries, battery fixes within weeks


Fri, Apr 26, 2013 - Page 15

Boeing expects to resume deliveries of the grounded 787 by early next month and to complete its battery fix for the high-tech plane by mid-month, company chief Jim McNerney said on Wednesday.

In an upbeat conference call after reporting robust first-quarter earnings, McNerney said that the company began installing its redesigned battery system “immediately” after receiving US Federal Aviation Administration (FAA) approval.

The FAA on Friday last week approved Boeing’s solution to the problematic lithium-ion batteries, which include replacing them and their chargers with modified components and installing a steel enclosure system to contain any overheating.

The decision cleared a key hurdle for the 787 to return to service after three months of being grounded worldwide following two incidents of battery overheating.

So far, Boeing has begun installations on 10 aircraft owned by airlines and nine planes being readied for delivery, Boeing chairman, president and chief executive McNerney said.

“We expect to complete the bulk of fleet retrofits by mid-May ... and deliveries are expected to resume in early May,” he said.

The FAA will have to approve the installations on US airlines before allowing the plane to fly again.

United Airlines has six 787s, the sole US carrier owning the Dreamliner.

McNerney said that despite the three-month delivery suspension, the company still expects to meet its target of more than 60 787 deliveries this year.

Only one has been delivered so far, to Air India in January before the grounding.

Boeing also confirmed its plan to ramp up 787 production to 10 per month by year-end, double the current pace.

Net income soared to US$1.1 billion in the first quarter, up 20 percent from the year-earlier period, while revenues declined 3 percent to US$18.9 billion, Boeing said.

Higher deliveries of the 777 and 737 models offset the freeze on 787 deliveries, it said.

Core earnings, which exclude pension and post-retirement expenses, were US$1.73 per share, well above analyst expectations of US$1.48 per share.

On the New York Stock Exchange, Dow member Boeing rose 3.1 percent to US$90.93, closing near the top end of its 52-week range.

The company did not reveal how much the 787 battery episode will cost it.

McNerney declined to provide details about any compensation claims from airline customers because of the groundings.

Chief financial officer Greg Smith said the costs of determining the cause of the 787 problems and implementing the fix were “minor,” but declined to provide a specific estimate.

He estimated the 787 program would break even, on a per unit basis, “about two years from now.”