Another fire, another mysterious technical glitch, and happy-go-lucky Boeing skips along enjoying strong sales, revenues and profits, despite the shadow of uncertainty that hangs over the lithium battery-charged Dreamliner.
The wide-bodied 787, following two fires on Japanese airliners in January that grounded them for months, experienced another blaze on July 12 at Heathrow Airport in London. This time the victim was Boeing customer Ethiopian Airlines, whose Dreamliner had a hole burned through the roof of the fuselage in front of the tail. The cause was attributed to an Emergency Locator Transmitter manufactured by Honeywell International, which contains a lithium manganese-dioxide battery – more about that later.
But the monster-sized lithium ion batteries that caused the January fires were cleared. Still, the Dreamliner has not been without its incidents this summer, which were spelled out earlier this week by travel writer Peter Greenberg. And another issue lingers from the months of inactivity caused by the 787 fires: compensation for Boeing’s airline customers.
CEO James McNerney informed shareholders in an earnings conference call at the end of July that the company had made good on all outstanding claims of losses related to the 787’s grounding.
“There were some instances where we had obligations to customers, and those have all been satisfied,” McNerney told investors and reporters during the July 24 call. “…We think they are all behind us now.”
But at least one Boeing customer is not satisfied: LOT Polish Airlines, the first European recipient of the Dreamliner. In an interview with Bloomberg, spokesman Robert Moren said, “In fact we were not satisfied at all financially. Those [costs] are not probably gigantic money for Boeing, but for us—while we are in the process of restructuring—it’s quite substantial.”
The dispute still lingers, and LOT’s top executive is beginning to sound bitter.
“We are demanding specific sums from Boeing that we have been able to calculate,” said LOT CEO Sebastian Mikosz to the Warsaw Business Journal. “Unfortunately, it is not possible to estimate all the damage to our company’s image caused by the loss of credibility with some of our customers.”
The Journal reported that, based on other media reports, that LOT sought $31.6 million (converted from Polish Zloty) from Boeing. In addition, the airline has had to cancel several flights due to other technical problems recently. Mikosz said he had not ruled out the possibility of going to court, but preferred to reach an agreement outside of legal action.
Whether Boeing is willing to shell out restitution of more than a nominal level is unknown, but Bloomberg recalled an instance early in 2012 when – after 787 orders for Air India were delayed – the Indian government announced that Boeing agreed to pay a half-billion dollars to make good. That was quickly refuted.
“We don’t comment on deals that we’ve done, but I can tell you that we’re not writing anybody a check for $500 million,” said Jim Allbaugh, then-president of Boeing’s commercial airplanes unit.
Bloomberg went on to explain that remuneration in jet delivery delays often takes the form of breaks on future aircraft deals such as discounts or friendlier financing terms. But early in the year when the 787 was grounded, Reuters estimated that Japan’s All Nippon Airways lost as much as $1.1 million a day due to the inactivity. If true, that’s a lot to make up with interest rates and other perks. At least Boeing is comfortable with its earnings enough that it believes it can honestly tell investors that its atonement efforts won’t hammer the stock price.
But whether Boeing should remain comfortable about measures it has taken to alleviate concern about new battery technology on the Dreamliner is another question. NLPC has reported about the challenges both before and after the Chicago-based manufacturer announced it had rectified the problems caused by its lithium ion batteries, despite the company not knowing what caused the fires last winter. The current “solution” is to make sure any “thermal runaway” event is contained within a stainless steel box and vented outside the airliner so as to not endanger passengers and crew. The only problem, as at least one scientist has explained, is that fires caused by the batteries often burn so hot as to melt stainless steel.
That scientist, Lewis Larsen of Chicago-based Lattice Energy, is particularly fascinated by the behavior of electric arcs. His analysis of the original fires in January appeared to be dead-on, with the explanation that nanoscale steel orbs that were discovered afterward were evidence that stainless steel “hotspots” were created in the battery casing, which caused melting and then reformed as spheres when they cooled.
Larsen also appears to be on to something about the Honeywell locator transmitter incident on the Ethiopian Airlines’ 787 last month in London. As he explained to aviation journalist Christine Negroni, the non-rechargeable battery inside the beacon is also lithium-based, and while not as susceptible to thermal events as the rechargeable lithium-ions, they still can fail “with catastrophic consequences.” In communication with NLPC, Larsen called attention to a recently released report from the General Civil Aviation Authority of the United Arab Emirates, which investigated a Boeing 747 fire and crash in Dubai in 2010. Among its findings were that vibration could cause problems with the batteries.
“Given the active failure modes of lithium batteries,” the report said, “the battery risk factors concerning possible susceptibility to various extraneous forms of mechanical energy, for example vibration, possibly in a harmonic form, could be an initiating action risk.”
Negroni noted that while the Honeywell transponders have had a good record on aluminum airplanes, the 787’s carbon fiber composite body may be the difference with its battery. Larsen told her that vibrations caused by endless movement around the airport could be factors with a sitting Dreamliner, as the Ethiopian airliner was for eight hours.
“The plane is sitting on the ground, other planes are going around,” Larsen told Negroni. “There’s all sorts of acoustic stuff in the air, the plane is like a big tuning fork.”
Whatever the cause, electrical problems continue to nag Boeing and its airline customers. Since the Heathrow episode there have been more flare-ups with panels and emergency locator transmitters, as Peter Greenberg has listed. A July 26th Reuters report showed Boeing spokesmen were mute about the subsequent problems.
It seems Boeing is trying to maintain a delicate balance between the prevention of two potentially explosive events: another actual thermal runaway or hints that might incite an unmerited media firestorm.
[First Published by The National Legal and Policy Center]