Dreamliner remains grounded, industry experts concerned over implications

Dreamliner remains grounded, industry experts concerned over implications

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Last April, Boston became the first city in the Western Hemisphere to land Boeing’s new 787 “Dreamliner” plane. The inaugural landing marked the first direct flight from Tokyo’s Narita International Airport to Boston’s Logan International Airport. However, since the Dreamliner debuted last year, the plane has been plagued with incidents and emergency landings.

Three weeks ago the Boeing 787 caught fire at Boston’s Logan Airport. The fire broke out in a small auxiliary power unit of the plane and was attributed to a battery malfunction. United Airlines also reported electrical malfunctions on numerous occasions on board the Boeing 787. On December 4th, 2012 a United flight from Houston, TX to Newark, NJ made an emergency landing due to a failed power generator. Subsequently, on January 16th, 2013 Japanese airlines All Nippon Airways (ANA) and Japan Airlines (JAL) announced a voluntary grounding of all 787 flights. In addition, the Federal Airline Administration (FAA) ordered all U.S. based airlines to ground their Boeing 787 until modifications to their electrical systems are made.

According to Boeing documents, the 787 has a different internal construction compared to the conventional passenger aircraft. To reduce the complexity and weight of the plane, engineers used more electrical components throughout its design. Part of this efficient design includes the GS Yuasa Japanese-made battery, which is responsible for the fires. Until the issue is resolved, all flights have been suspended.

The faulty Dreamliner is costing airlines, which have reportedly lost millions since the suspension of the 787. In fact, the Dreamliner’s woes have macroeconomic implications. Recent malfunctions have strained a lucrative relationship between Boeing and Japanese customers and suppliers. The Wall Street Journal reports that it is not just the airlines that are affected. Roughly 1/3 of each Dreamliner was built by Japanese manufacturers before being transported and assembled in the United States. A massive 43% of Japanese aerospace employment is linked to Boeing.

The scandal surrounding the Dreamliner could not have arrived at a less opportune time. Due to recent deregulation in the Japanese economy, Airbus has grabbed some of the Japanese market share. Today, Airbus says that 44 of its planes are based in Japan. Japanese Financiers says that the competition will give Japanese airlines more bargaining power when purchasing products. However, others debate that the effects of competition could be catastrophic for the Japanese aerospace industry because of its close ties with Boeing. In fact, when the Dreamliner faced setbacks in 2007-2010, Japanese aviation exports declined by 25% in the same period.

JAL says that its relationship with Boeing remains unchanged and Boeing officials are working to resolve the issue.

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