Wednesday, March 27, 2013

FAA may shorten flying time of Boeing 787: sources

By Andrea Shalal-Esa and Mari Saito

WASHINGTON/TOKYO (Reuters) - As Boeing works to regain permission for its 787 Dreamliner to resume flights, the company faces what could be a costly new challenge: a temporary ban on some of the long-distance, trans-ocean journeys that the jet was intended to fly.

Aviation experts and government officials say the Federal Aviation Administration may shorten the permitted flying time of the 787 on certain routes when it approves a revamped battery system. The plane was grounded worldwide two months ago after lithium-ion batteries overheated on two separate aircraft.

Losing extended operations, or ETOPS, would deal a blow to Boeing and its airline customers by limiting use of the fuel-saving jet, designed to lower costs on long-distance routes that don't require the capacity of the larger Boeing 777. Such a loss could even lead to cancellation of some routes.

"If the FAA approves (only) over-land operations it would be a very damaging blow to the 787 program," said Scott Hamilton, an aviation analyst with Leeham Co in Seattle.

"Depending on how long that restriction remains in place, it would completely undermine the business case for the airplane, which was to be able to do these long, thin intercontinental routes" over water, he said.

Grounding the 787 already has cost Boeing an estimated $450 million (296.7 million pounds) in lost income and compensation payments to airlines. Further restrictions on the 787's range could send the airlines' claims - and Boeing's costs - higher.

Until it was grounded on January 16, the 787 was permitted to fly routes that ranged as much as three hours away from an airport. Boeing has asked the FAA to extend that range to 5-1/2 hours. That change would enable airlines to fly many more routes across remote areas such as the North Pole.

Now the jet faces the potential temporary loss of its ETOPS approval or a roll-back to two hours, according to government officials and aviation experts.

"It is completely within expectations for FAA to limit ETOPS for the 787," one regulatory source in Japan told Reuters. He said that reducing the range to two hours would force Japanese airlines to fly more circuitous routes, burning up more fuel and cutting efficiency.

A former senior U.S. government official said there was "a distinct possibility" that Boeing could win the battle over FAA flight certification for the battery only to lose permission for extended operations - at least temporarily.

An FAA spokesperson said it was too early to discuss ETOPS approval since Boeing's battery fix was still being tested.

"It's really premature to talk about what ETOPS certification we would give them right now," said the spokesperson. "We'll be in a better position to answer questions like that after we get through all this battery testing."

Boeing referred questions to the FAA. During a recent news conference in Japan, Boeing executives said there had not been any conversations with regulators about extended range operations. They said the proposed certification plan did not foresee further limitations once the plane was allowed to resume flight operations.

The issue is heating up as Boeing nears the end of testing the new battery system, designed to prevent the meltdowns that occurred in January. Boeing executives say the FAA could approve the new battery system within weeks. The first flight test of the system took place Monday, and a second, final test flight is expected in coming days, Boeing spokesman Marc Birtel said.

Analysts and industry executives say any decision to limit the flying time of the new aircraft would have serious consequences.

The change would not rule out all international routes, but some specific routes, such as Japan Airlines Co's Tokyo-to-Boston flight, might have to be cancelled, said the Japanese regulatory source.

The 787's biggest customers so far include All Nippon Airways and Japan Airlines, which fly extended routes to the United States and Europe, and Qatar Airways. In the U.S., United Airlines is the only carrier to have taken delivery of 787s. The airlines declined requests for comment on how loss of ETOPS could affect operations.

A step-by-step return to full, extended flight would give regulators more time to study the effectiveness of Boeing's battery fix, and could help the Obama administration prove that it was making good on Transportation Secretary Ray LaHood's promise to ensure the plane was "1,000-percent" safe, some experts said.

It would also address concerns voiced by Japanese aviation regulatory authorities in recent weeks.

Nor is it without precedent. Until the late 1980s, the FAA required airlines to fly a certain number of hours over land before it approved extended-range operations over water or remote areas. It started granting permission for those flights in tandem with flight certification when engine safety improved.

But the highly electrical nature of the 787 has raised new questions, said another former U.S. official, noting that the importance of the lithium-ion batteries for the plane's operation made it a bigger risk factor than past batteries.

"In the past, if you lost a battery, or a battery malfunctioned, it wasn't that big of a deal," said that former U.S. official.

"But if Boeing's battery is needed to start the engine - and that battery is susceptible to fire - isn't that a turn back condition? Isn't that something you have to go land at an airport to address? That's the question."

(Additional reporting by Tim Kelly in Tokyo and Tim Hepher in Paris.; Editing by Alwyn Scott and Steve Orlofsky)

Source: http://news.yahoo.com/boeing-787-faces-risk-limits-extended-range-sources-000731310--finance.html

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