Boeing says it will find cause of 787 problems, defends batteries

Aerospace giant Boeing Co. said it is confident it will get to the root cause of the battery problems with its problem-plagued 787 Dreamliner passenger jet.

The company’s newest plane has been grounded since Jan. 16 by the Federal Aviation Administration after experiencing problems with onboard lithium-ion batteries.

In a conference call announcing Boeing’s fourth-quarter earnings, Chief Executive James McNerney said the company is working with customers and the regulatory agencies to get the matter resolved but is not permitted to comment directly on the ongoing investigations.


“I’m confident we will identify the root cause of these incidents,” he said. “When we know the answer, we’ll know the answer and we’ll act on it.”

The 787’s battery systems were called into question Jan. 7 when a smoldering fire was discovered on the underbelly of the plane operated by Japan Airlines after the 183 passengers and 11 crew members had deplaned at the gate.

The National Transportation Safety Board is investigating the burnt lithium-ion battery systems, analyzing the chemical and elemental make-up of the areas of internal short circuiting and thermal damage.

In the second incident, which involved All Nippon Airways, smoke was seen swirling from the right side of the cockpit after an emergency landing related to the plane’s electrical systems. All 137 passengers and crew members were evacuated from the aircraft and slid down the 787’s emergency slides. Video of the event was captured by an onboard passenger and has been broadcast worldwide.

Neither safety agency has reached a conclusion on the cause of the incidents.

No one has been reported hurt or injured. But the recent events have become a public relations nightmare for the Chicago company, which has long heralded the Dreamliner as a representation of 21st century air travel.

The 787, a twin-aisle aircraft that can seat 210 to 290 passengers, is the first large commercial jet with more than half its structure made of composite materials (carbon fibers meshed together with epoxy) rather than aluminum sheets. It’s also the first large commercial aircraft that extensively uses electrically powered systems involving lithium-ion batteries.

Despite the incidents, McNerney said he didn’t doubt the decision to use the new technology.

“Nothing we’ve learned has told us yet that we have made the wrong choice on the battery technology,” he said. “We feel good about the battery technology and its fit for the airplane. We’ve just got to get to the root cause of these incidents and we’ll take a look at the data as it unfolds.”

In the quarter, Boeing earned $978 million, or $1.28 per share. That’s down 30% from $1.39 billion, or $1.84 per share last year, but that period included a tax benefit.

Boeing’s fourth-quarter profit topped analyst estimates of $1.19 a share.

Revenue rose 14% to $22.3 billion.

Boeing expects earnings this year to be $5 to $5.20 per share, with revenue of $82 billion to $85 billion. The company expects “no significant financial impact” from the 787 ongoing grounding.


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