U.S. Aircraft Manufacturing Industry Takes a Hit with Federal Aviation Administration Grounding of Boeing 787 Aircraft

The competitive position of the United States aircraft manufacturing industry was dealt a blow, beginning on January 19, 2013, with the order by the Federal Aviation Administration (“FAA”) for the grounding of Boeing’s “Dreamliner,” the Boeing 787.  The order, occurring just 17 months after the FAA’s final approval of the aircraft’s formal entry into the market, effectively shuts Boeing out, at least temporarily, of the New Large Aircraft (“NLA”) market.  Several countries around the world, including Japan and Singapore, had already taken that step independently.  Boeing has now ordered the cessation of all 787 manufacturing activities, pending further investigation of the source of the problem. 

The issue first came to public attention when one of the 787s caught fire while on the tarmac in Boston, and yet another experienced an unexplained fuel leak.  FAA preliminarily attributes the problem to the new technology employed in the aircraft’s construction.  Specifically, the hydraulically powered systems utilized in most passenger aircraft are replaced in the 787 by electrically powered systems using lithium ion batteries.  While, on the one hand, Boeing maintains that the use of electrically powered brakes reduces the incidence of leaks in hydraulic systems and resultant delays, allowing the 787 to burn 20% less fuel than other comparable aircraft, the potential for electrical fire or failure of the systems has opened a whole new universe of questions for FAA. 

Finally, the grounding will certainly cause a domino effect in economic terms.  Boeing planned to assemble five Dreamliners per month, rising to 10 later this year, to meet its 848 orders worldwide.  The delay of that planned assembly will not only affect American manufacturing, and specifically that in Southern California and Washington State, but also the economies in those countries and regions involved in the manufacture of component parts and assembly, such as Russia, Japan and Italy. 

Boeing maintains that the “glitch” is short lived, but the electrical problems such as those discovered recently on Japan Airlines, United Airlines and Qatar Airways’ 787s are not new for lithium ion batteries and do not bode well for the near term future of the 787, or of its parent, the Boeing Company.
 

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