A United Airlines' Boeing 787 Dreamliner plane

Europe US and Qatar ground Boeing Dreamliners

European aviation regulators have followed America in ordering the grounding of Boeing's new Dreamliner plane.

But UK airlines due to fly the state-of-the-art plane soon said they were confident their deliveries would not be affected.

Already years late into service due to production difficulties, the Boeing 787 Dreamliner has run into a series of in-air problems in recent days.

The latest incident, an emergency landing after battery problems, prompted America's Federal Aviation Administration (FAA) to order US carriers to stop flying Dreamliners.

This week the European Aviation Safety Agency (EASA) said it was endorsing the FAA directive grounding the Dreamliner until the risk of fires is resolved.

The EASA order is for all European carriers flying the 787, which at the moment only applies to Polish airline LOT.

UK carrier Thomson Airways is set to be the first British airline to fly the Dreamliner. 

It is due to take delivery of the first of eight 787s this spring, with the first flights due to leave on May 1 for Cancun in Mexico and Florida.

British Airways is due to take delivery of the first of 24 Dreamliners in May, while Virgin Atlantic is scheduled to start taking the first of 16 Dreamliners in summer 2014.

Thomson Airways said today: "Boeing has reassured us they will do everything possible to assist the FAA in their investigation, and will be taking every step to assure passengers and Thomson of the 787's safety and get the planes back into service.

"We will await the outcome of the FAA investigation into the 787 Dreamliner. At this time we are still working to our original delivery dates."

Virgin said: "We are still expecting to take delivery of 16 Boeing 787-9 Dreamliners from summer next year. Until then we are working with Boeing to understand all of the technical issues around the aircraft.

"We have every confidence that Boeing and the relevant authorities will ensure sufficient oversight is maintained and that corrective action will be taken if problems are identified."

BA said: "The safety and security of our customers will always be at the heart of our operation and all our business decisions.

"We remain committed to taking delivery of our first Boeing 787 later this year. We are confident that any safety concerns will be fully addressed by Boeing and the FAA as part of their recently announced review into the aircraft."

Seattle-based Boeing said: "The safety of passengers and crew members who fly aboard Boeing airplanes is our highest priority.

"Boeing is committed to supporting the FAA and finding answers as quickly as possible. 

"The company is working around the clock with its customers and the various regulatory and investigative authorities. We will make available the entire resources of the company to assist."

It went on: "We are confident the 787 is safe and we stand behind its overall integrity. We will be taking every necessary step in the coming days to assure our customers and the travelling public of the 787's safety and to return the airplanes to service.

"Boeing deeply regrets the impact that recent events have had on the operating schedules of our customers and the inconvenience to them and their passengers."

Qatar Airways has also grounded its entire fleet of five Boeing 787 Dreamliner aircraft until further notice, the company said.

It said it was following instructions from the U.S. FAA and Qatar's Civil Aviation Authority.

The FAA grounded Boeing's newest commercial airliner earlier this week, saying airlines would have to demonstrate that lithium-ion batteries were safe before the planes could resume flying. It gave no details on when that might happen. Other national regulators have followed suit.

It is the first such action against a U.S.-made passenger plane since the McDonnell Douglas DC-10 had its airworthiness certificate suspended following a deadly crash in Chicago in 1979, analysts said.

Fast-growing Qatar Airways, which is enjoying a civil aviation boom in the Gulf, has an order for up to 60 of the aircraft - 30 firm orders plus an option to acquire 30 more.

"In light of recent events surrounding the Boeing 787 Dreamliner worldwide, we are actively working with Boeing and the regulators to restore full customer confidence in the 787," Qatar Airways chief executive Akbar al-Baker said in the statement.

He said the airline would resume flying the 787 when it was clear that the plane was safe.

The statement did not say whether Qatar Airways might demand compensation from Boeing. 

Last month, after one of the airline's 787s had a problem with a power generator, Baker said he would seek compensation.

Last week, Baker said he had no plans at the moment to cancel any plane orders with Boeing, but added: "When we have to start grounding planes, then it becomes an issue and then they have to get their cheque book out."

Japan Airlines will cancel eight flights from Jan. 19 to 25 on its Tokyo to San Diego route after the grounding of all Boeing 787 flights, affecting 1,290 passengers, the airline said.

JAL also said it will switch aircraft for 70 flights that were scheduled to fly on Dreamliners, as JAL and All Nippon Airways scramble to cope with the grounding of Dreamliner passenger jets for investigations of battery problems that led to an emergency landing of an ANA flight earlier this week.

Boeing has sold around 850 of the new planes, with 50 delivered to date. 

Around half of those have been in operation in Japan, but airlines in India, South America, Poland, Qatar and Ethiopia, as well as United Airlines in the United States, are also flying the aircraft, which has a list price of $207 million.

With most of that Dreamliner fleet now effectively out of action as engineers and regulators make urgent checks - primarily to the plane's batteries and complex electronics systems - airlines are wrestling with gaps in their scheduling.

Japan Airlines said the 787 grounding would lead to three flight cancellations, affecting more than 500 passengers. 

A spokesman for Air India said no flights had been cancelled as the airline was using other planes. "We're working out a plan to handle the situation, and will hopefully know by this evening how we should go about it," G. Prasada Rao said.

Motohisa Tachikawa, spokesman for JTB, a Tokyo-based travel services firm, said there had not yet been any direct impact on flight bookings. "I'm sure JAL and ANA are furiously trying to assign replacement planes for those that are grounded. How and when they will make that clear will impact our situation," he told Reuters.

Keeping the 787s on the ground could cost ANA alone more than $1.1 million a day, Mizuho Securities calculated, noting the Dreamliner was key to the airline's growth strategy.

Regulators in Japan and India said it was unclear when the Dreamliner could be back in action.

A spokesman for the European Aviation Safety Agency said the region would follow the FAA's grounding order.

Poland's state-controlled LOT Airlines is the sole European airline currently operating the 787.

Boeing said in a statement it was confident the 787 was safe and it stood by the plane's integrity.

Passengers leaving United's flight 1426 in Houston - which had taken off from Los Angeles moments before the FAA announcement - reported an incident-free trip. 

"I fly over 100,000 miles a year," said Brett Boudreaux, a salesman from Lake Charles, Louisiana. 

"That was one of the most relaxing flights I've ever had. I hope they sort it out. It's a hell of a plane."

Boeing shares fell 2 per cent in after-hours trading earlier this week, to $72.75.

"Ultimately, you can view it as a positive thing if they can resolve what the issues are and give people confidence in the safety of the aircraft," said Ken Herbert, analyst at Imperial Capital in San Francisco.

"In the near-term, though, it's a negative. It's going to force the company to make significant investments."

Scott Hamilton, an analyst at Leeham, an aerospace consulting firm in Seattle, said having a plane grounded "is about the worst thing that can happen to an airplane programme".

"If this goes beyond just a bad design of a battery and you have to redesign some systems leading to the battery, and look at why didn't safeguards on this thing work, you get a ripple effect," he said. 

"They'll have more airplanes going out the door and they can't deliver them. So you build up inventory. Every day .. is an added day of delivery delays."

Six new 787s, painted and apparently ready for delivery to various airlines, were parked on the apron at Paine Field in Everett, Washington, adjacent to Boeing's 787 plant this week. 

Four more Dreamliners occupied the final assembly spots inside the factory.

Yoshitomo Tamaki, director general at the Japan Transport Safety Board (JTSB), said checks on the ANA flight that made the emergency landing showed a bulge in the metal box that cases the main battery. 

The electric equipment bay, where the battery is located, had a strong smell of smoke and soot was found on the box and on two exterior valves used to regulate temperature in the plane. 

JTSB spokesman Takayuki Someya said the investigation would focus on whether this was battery-related.

Representatives from the FAA, Boeing and the U.S. National Transportation Safety Board were due in Japan later this week to inspect the Dreamliner that had the apparent battery fire.

The use of new battery technology is among the cost-saving features of the 787, which Boeing says burns 20 per cent less fuel than rival jetliners using older technology.

Shares of GS Yuasa, a Japanese firm that makes batteries for the Dreamliner, tumbled as much as 7.5 per cent to a 2-month low. 

The stock has dropped 18 per cent since Jan. 7 when one of its batteries caught fire in a parked JAL-operated 787 at Boston Logan International Airport.

The 787 represents a leap in the way planes are designed and built, but the project has been plagued by cost overruns and years of delays. 

Some have suggested Boeing's rush to get planes built after those delays resulted in the recent problems, a charge the company denies.

Based on how regulators usually handle air safety, experts say U.S. authorities and Boeing will discuss the criteria for inspections on the Dreamliner.

They would also set what fixes, if any, are needed and a timetable for those. 

Analysts say it's unclear how long such a process could take or how much it could cost, but some question whether Boeing can stick to its target of doubling 787 output to 10 a month by the end of this year.

"It guarantees some throttling back in production. It's clear one of the problems was building planes before fully understanding the rhythm of production," said Teal Group analyst Richard Aboulafia.

Moody's said the 787 grounding was a negative credit development for Boeing, but ratings were not expected to be impacted for now. 

"This could pose new operating and financial pressures for Boeing, including further delay in delivery schedules and future order flow, as well as ongoing reputational risk," noted Russell Solomon, Senior Vice President.

Barring a prolonged grounding or a severe crisis, aircraft industry sources say there was no immediate threat of plane cancellations.

"You aren't going to see cancellations," said Leeham's Hamilton, noting airlines have no alternative as rival Airbus models are sold out and have years-long waiting lists.

The Dreamliner's problems could sharpen competition with Airbus, which a year ago had its own crisis with wing crack problems on its A380 superjumbo. 

Later this week Airbus is due to release its 2012 order and delivery data, expected to show that Boeing last year regained the title of world's biggest aircraft maker for the first time in a decade.

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