Japanese airlines ground Boeing 787s after emergency landing

Japan's two leading airlines grounded their fleets of Boeing 787s on Wednesday after one of the Dreamliner passenger jets made an emergency landing, heightening safety concerns over a plane many see as the future of commercial aviation.

All Nippon Airways Co said it was grounding all 17 of its 787s and Japan Airlines Co said it suspended all 787 flights scheduled for Wednesday. ANA said its planes could be back in the air as soon as Thursday once checks were completed. The two carriers operate around half of the 50 Dreamliners delivered by Boeing to date.

Wednesday's incident follows a series of mishaps for the new Dreamliner. The sophisticated plane, the world's first mainly carbon-composite airliner, has suffered fuel leaks, a battery fire, wiring problem, brake computer glitch and cracked cockpit window in recent days.

"I think you're nearing the tipping point where they need to regard this as a serious crisis," said Richard Aboulafia, a senior analyst with the Teal Group in Fairfax, Virginia. "This is going to change people's perception of the aircraft if they don't act quickly."

The 787 represented a leap in the way planes are designed and built, but the project was 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 strenuously denies.

Both the U.S. Federal Aviation Administration (FAA) and the National Transportation Safety Board (NTSB) said they were monitoring the latest Dreamliner incident as part of a comprehensive review of the aircraft announced late last week.

ALARM TRIGGERED

ANA flight 692 left Yamaguchi Airport in western Japan shortly after 8 a.m. local time (2300 GMT Tuesday) bound for Haneda Airport near Tokyo, a 65-minute flight. About 18 minutes into the flight, at 30,000 feet, the plane began a descent. It descended to 20,000 feet in about four minutes and made an emergency landing 16 minutes later, according to flight-tracking website Flightaware.com.

A spokesman for Osaka airport authority said the plane landed in Takamatsu at 8:45 a.m. All 129 passengers and eight crew evacuated safely via the plane's inflatable chutes. Chief Cabinet Secretary Yoshihide Suga said 5 people were slightly injured.

At a news conference - where ANA's vice-president Osamu Shinobe bowed deeply in apology - the carrier said instruments on the flight indicated a battery error, triggering emergency warnings to the pilots. It said the battery in the forward cargo hold was the same type as one involved in a fire on another Dreamliner at a U.S. airport last week.

"There was a battery alert in the cockpit and there was an odd smell detected in the cockpit and cabin, and (the pilot) decided to make an emergency landing," Shinobe said.

Marc Birtel, a Boeing spokesman, told Reuters: "We've seen the reports, we're aware of the events and are working with our customer."

The Teal Group's Aboulafi said regulators could ground all 50 of the 787 planes now in service, while airlines may make the decision themselves. "They may want to protect their own brand images," he said.

UNDER REVIEW

Australia's Qantas Airways said its order for 15 Dreamliners remained on track, and its Jetstar subsidiary was due to take delivery of the first of the aircraft in the second half of this year. Qantas declined to comment further on the issues that have plagued the new lightweight, fuel-efficient aircraft.

India's aviation regulator said it was reviewing the Dreamliner's safety and would talk to parts makers, but had no plans to ground the planes. State-owned Air India has six of the aircraft in service and more on order.

"We are not having any problem with our Dreamliners. The problems we had earlier were fixed," Arun Mishra, Director General of Civil Aviation, told Reuters. "We are reviewing the situation now."

United Airlines, the only U.S. carrier currently flying the 787, said it was not taking any immediate action in response to the latest incident. "We are looking at what is happening with ANA and we will have more information tomorrow," a spokeswoman said.

Shares of Dreamliner suppliers in Japan came under pressure.

GS Yuasa Corp - which makes the plane's batteries - fell 4.5 percent, as did Toray Industries Inc, which supplies carbon fibre used in the plane's composites. Fuji Heavy Industries, Mitsubishi Heavy Industries and IHI slid 2.5-3 percent on a benchmark Nikkei that was 2 percent lower. ANA shares slipped 1 percent.

PUBLIC CONFIDENCE

Japan's transport minister on Tuesday acknowledged that passenger confidence in the Dreamliner was at stake, as both Japan and the United States have opened broad and open-ended investigations into the plane after the recent incidents.

The 787 is Boeing's first new jet in more than a decade, and the company's financial fortunes are largely tied to its success. The plane offers airlines unprecedented fuel economy, but the huge investment to develop it coupled with years of delay in delivery has caused headaches for customers, hurt Boeing financially and created a delivery bottleneck.

Boeing has said it will at least break even on the cost of building the 1,100 new 787s it expects to deliver over the next decade. Some analysts, however, say Boeing may never make money from the plane, given its enormous development cost.

Any additional cost from fixing problems discovered by the string of recent incidents would affect those forecasts, and could hit Boeing's bottom line more quickly if it has to stop delivering planes, analysts said.

To date it has sold close to 850 of the planes to airlines around the world.

(Addtional reporting by Olivier Fabre, Kentaro Sugiyama, Mari Saito, Deborah Charles and Alwyn Scott; Writing by Ian Geoghegan; Editing by Paul Tait and Alex Richardson)