ANA’s Dreamliner pain deepens

Courtesy Reuters

Courtesy Reuters

Singapore Airlines (SIA) which sought to be the first to operate the Airbus A380 in 2007 must be heaving a sigh of relief that it had passed over the Boeing 787 Dreamliner. It was All Nippon Airways (ANA) that made the wrong bet.

When the Boeing aircraft was grounded in early January following the unknown cause of a fire that was at first suspected to be caused by the lithium battery (see Dreamliner: Not quite a dream start, Jan 17, 2013; Japanese carriers remain positive despite Dreamliner grounding, Feb 5, 2013), it was widely hopeful that operations would resume by the end of the month as the aircraft maker moves quickly to investigate the cause and fix the problem. Then some of the airlines affected moved the delay to mid-February, and now it all seems but uncertain when this is likely to happen. ANA, the biggest operator of the aircraft – 17 out of the world’s 50 B787 in operations – is cancelling all flights using the aircraft till at least the end of May.

ANA announced its decision even as Boeing said it expected to fix the problem to get the Dreamliners back in the sky by mid-April. The US Federal Aviation Administration (FAA) is reviewing Boeing’s proposal but said: “The safety of the public is our top priority and we won’t allow the 787 to return to commercial service until we’re confident that any proposed solution has addressed the battery failure risks.”

Unfortunately for ANA, Japan’s Golden Week holiday which normally experiences peak travel will fall during the extended period of cancellation of 1,700 flights in April and May.  This will bring the number of flights cancelled to 3,600. As many as 60,000 ANA customers have been affected.

The cost to ANA has so far been US$15.4 million (January), and it remains an open question as to how much more this will affect the airline’s profitability. While ANA may be protected by compensation that it will seek from Boeing, the bigger issue in the long term is one of opportunity cost and the loss of customers to competitors. Boeing itself recognizes this, saying it would take “every necessary step to assure our customers and the travelling public of the integrity of the 787.” (See Prolonged Dreamliner grounding is not good news for Boeing and its customers, Jan 28, 2013).

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About David Leo
David Leo has more than 30 years of aviation experience, having served in senior management in one of the world's best airlines and airports. He continues to maintain a keen interest in the business, writes freelance and provides consultancy services in the field.

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