Boeing faces Dreamliner compensation woes

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Boeing is braced for compensation claims from airlines that have been forced to ground their Dreamliners following the safety scare over the aircraft’s batteries.

The demands could be made by several of the eight carriers that were operating the 787 until regulators ordered a global grounding of the technologically-advanced Dreamliner on Thursday.

It came as Japanese and US regulators concluded an initial inspection of the All Nippon Airways 787 that was forced to make an emergency landing in western Japan on Wednesday because of the failure of one of its lithium-ion batteries.

This failure, together with a battery fire on a Japan Airlines’ Dreamliner on January 7, prompted regulators to order carriers to ground their 787s until they show that the batteries are safe.

These airlines are now grappling with significant disruption to their flight schedules because their Dreamliners are grounded.

Ajit Singh, India’s civil aviation minister, said that state-owned Air India, which has five Dreamliners, should be entitled to compensation. Mr Singh said: “I think they [Boeing] would be liable to compensate Air India . . . At this point I don't know how long the [grounding] will be.”

Qatar Airways, which also has five Dreamliners, is expected to consider the case for compensation.

Akbar Al Baker, the airline’s chief executive, said this month before the grounding: “When we have to start grounding planes, then it becomes an issue and then they [Boeing] have to get their cheque book out.”

LOT Polish Airlines, the only European airline operating the 787, has also said that it was preparing to seek compensation.

ANA, the largest operator of the 787, with 17 Dreamliners, has not ruled out seeking compensation after cancelling more than 100 flights affecting thousands of passengers.

Japanese and US regulators who inspected the ANA 787 that suffered the battery failure are taking the equipment to Tokyo for further examination, which suggests that any final conclusions may take some time to be reached.

Lux Research, a technology advisory firm, on Friday claimed that Boeing chose the wrong type of lithium-ion battery for the 787, saying that there was a safer version available. Boeing has been using batteries based on lithium cobalt oxide, but Lux said that those involving lithium iron phosphate were safer.

Boeing said: “Safety is our highest priority and to suggest otherwise is inaccurate.”

The Federal Aviation Administration, the US regulator, is conducting a review of the 787’s innovative electrical power system, including the batteries, because it has suffered several faults.

The system was part of Boeing’s broad efforts to save weight on the 787, and therefore boost its fuel efficiency.

A Japanese investigator on Friday said that the burned insides of a battery in the 787 indicated that “voltage exceeding the design limit was applied”, according to Reuters. There were similar burn marks in the Dreamliner that caught fire at Boston’s Logan airport on January 7.

On the question of compensation for airlines, Boeing added: “We are in ongoing conversations with our customers – those who operate the airplane as well as those who are yet to receive their first 787 – to ensure they understand the progress being made to define the plan to return to flight.”

On Friday, US transportation secretary Ray LaHood told reporters that the aircraft would not fly again until authorities were “1,000 per cent sure” of their safety.

He said that a thorough investigation of the batteries linked to the incidents must be completed before the 787 was cleared for flight.

“The reason that we grounded it is because we did further consultation with Boeing and there was another incident,” Mr LaHood said. “So those planes aren’t flying now until we really have a chance to examine the batteries. That seems to be where the problem is.”

Additional reporting by Neil Munshi and Jyotsna Singh

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