Boeing starts work on stretch 787 By
Published: Feb 3, 2013 1:11 p.m. ET
Boeing Co. BA, +0.54%
next week is expected to reach an assembly milestone on the next version of its Dreamliner jet without a fix for what has bedeviled the plane's electrical system or a timetable for resuming flights. The new Dreamliner, called the 787-9, would carry about 40 more passengers and fly slightly farther than the current model, which carries around 250. It would use the same electrical system and lithium-ion batteries as the current model. Continuing work on the new model is important to Boeing in part because of its expected higher price tag and need to avoid new supply chain problems that delayed first deliveries of the existing Dreamliner by 3 1/2 years. Earlier this week, Boeing's modified 747 Dreamlifter ferried the first major sections of the 787-9 to North Charleston, S.C., from Japan, a person familiar with the manufacturing plans said. The special delivery is the first step toward assembling the jet's 20-foot-longer fuselage. On Friday, the National Transportation Safety Board's update of its probe signaled investigators from the board and the Federal Aviation Administration continue to be unclear why lithium-ion batteries aboard a pair of Dreamliners operated by two Japanese airlines burned last month. A Jan. 7 fire and subsequent emergency landing on Jan. 16 led to a worldwide grounding of the about 50 Dreamliners in service at global airlines, which now heads into its fourth week. By reporting that detailed examination of an undamaged battery removed from one of the planes hasn't produced any "anomalies"--and disclosing that more outside experts are joining the team--the announcement appeared to buttress comments by industry and government officials that progress in the investigation is slow and uneven. U.S. and Japanese investigators previously said they failed to identify obvious defects with the plane's batteries, battery chargers, or related electrical and mechanical systems. The safety board, according to these officials, still hasn't focused on what it considers the leading theory explaining the dangerous battery malfunctions. Working alongside Boeing engineers and battery scientists, federal investigators "essentially remain stumped" in finding the root cause, according to one person familiar with the details. Absent a likely theory, this person said, at this point "investigators aren't really even sure what they are looking for." Boeing Chief Executive Jim McNerney said on Wednesday the company and investigators were "narrowing down the things that could have gone wrong." But the prospect that identifying the root cause and then devising a possible fix could take many more weeks-- or perhaps stretch into months-- poses potentially huge challenges for the Chicago plane maker. Despite the grounding, production of the 787 is continuing with "business as usual," said Mr. McNerney. The company has no intention of changing current plans to double output to 10 Dreamliners a month by year's end. The FAA, however, hasn't agreed on any procedures that would permit Boeing to start flight-testing electrical or other essential systems on the new model, according to people familiar with the details. The FAA declined immediate comment. If investigators reach a breakthrough, Boeing may be allowed "to formulate a set of revised airline operating procedures that will allow carriers to safely operate their 787s, giving time for Boeing to design a more permanent fix to the problem," wrote Cai von Ruhmor, aerospace analyst at banker Cowen & Co. "We recognize that the 787's future cannot be separated from Boeing's prospects," according to Howard Rubel, a managing director Jefferies & Co. who has computed a range of potential economic fallout for Boeing. Mr. Rubel's scenarios include design changes on around 125 jets, projected to cost an additional $250 million to $650 million, and a potential a three-month slip in Boeing's production plans prompting $1.9 billion in missed revenue this year and slower productivity gains. The company faces the double challenge of resolving safety issues with the batteries on the current 787 version, which entered service in 2011 after lengthy delays, and then phasing in a permanent fix for the larger 787-9 without interrupting its development. The company hopes to deliver the first 787-9 to Air New Zealand PLC by early next year. Boeing spokesman Marc Birtel says the company continues to make "steady progress" on the 787-9. "We remain confident in the design of the 787 and will apply any lessons learned on the 787-8 to the 787-9, as appropriate, before it enters service." For now Boeing is using a number of electrical-system simulators on the ground to mimic airborne trips in an effort to find technical answers. "They have been cycling around the clock to simulate flights, without finding anything unusual," according to one person familiar with the details. Transportation Secretary Ray LaHood, who last month ordered the comprehensive review of the 787's design and production, said on Friday that "we will continue to look at the entire plane with a focus on the batteries." Mr. LaHood, who has declined to talk about the status of the global investigation or sketch out a timeline for completion, said: "those planes aren't going to fly until we get the green light from the people who are doing the top-to-bottom review that they're safe to fly." --Sarah Portlock contributed to this article. Subscribe to WSJ: 
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