Japan battery maker shares fall after Boeing 787 fire

Jan 9 (Reuters) - Shares of Japan's GS Yuasa Corp , which makes batteries for Boeing Co's new 787 Dreamliner, fell sharply for a second day on Wednesday after a fire aboard a Japan Airlines aircraft earlier this week.

"The batteries were made by our company," a GS Yuasa spokesman told Reuters, adding that the cause of the fire was unclear, and whether or not the fire was sparked by the GS Yuasa-made batteries had not been determined.

"We are ready to send our crew for investigation when we get more details from the authorities," he said. The company said it provides auxiliary power unit batteries for the Dreamliner.

On Monday, an electrical fire erupted on one of Boeing's 787 Dreamliners operated by Japan Airlines at Boston's Logan International airport. Authorities said a battery in the auxiliary power unit aboard the plane jet had suffered "severe fire damage".

In a second mishap a day later at the same airport, a fuel leak forced a different 787 operated by Japan Airlines to cancel takeoff at the Boston airport. The two incidents have extended a series of problems that have dogged the jet for more than a month and notched up concern about the plane.

Shares in GS Yuasa, Japan's top producer of traditional lead acid auto batteries with a 35 percent chunk of the domestic market, fell as much as 5.1 percent to 318 yen, after falling 4 percent on Tuesday.

Analysts said the impact on earnings was seen as limited at present, as the company's industrial battery business only accounts for 1 percent of group sales.

"We think this incident is unlikely to have any major impact on earnings at GS Yuasa at this point because industrial application LiBs (lithium-ion batteries) make only a modest earnings contribution," Citigroup analyst Tsubasa Sasaki said in a note.

"However, industrial LiBs are one of the company's growth areas and we think earnings could be negatively affected to some degree if it turns out that its batteries did trigger the fire."

GS Yuasa's products range from lead acid batteries for auto and motorbike uses to industrial lithium-ion batteries.

Japan Airlines said six of its seven Boeing 787 aircraft are operating in Japan, while one remains at Boston Logan. Japan's transport ministry ordered inspections of batteries in the auxiliary power unit. JAL inspected six of the units and found no problems.

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(Reuters) - Boeing Co's 787 Dreamliner jet on Tuesday suffered its second mishap in two days, with the same airline and at the same U.S. airport - the latest in a series of setbacks that have heightened safety concerns over the new aircraft.

A fuel leak forced a 787 operated by Japan Airlines to cancel takeoff at Boston's Logan International Airport, a day after an electrical fire on another 787 after a JAL flight to Boston from Tokyo.

Asian customers rallied behind the U.S. planemaker, saying the incidents were glitches that can happen on new planes and confirming they had no plans to scale back or cancel orders for the aircraft, which has a list price of $207 million.

Japan is by far the biggest customer for the Dreamliner to date, with JAL and All Nippon Airways (ANA) operating a total of 24 of the 49 new planes delivered to end-December. The aircraft entered commercial service in November 2011, more than three years behind schedule after a series of production delays. Boeing has sold 848 of the planes.

JAL spokesman Kazunori Kidosaki said the carrier, which operates seven Dreamliners, had no plans to change orders it has placed for another 38 aircraft. ANA, which has 17 Dreamliners flying its colors, said it was sticking with its orders for another 49 of the planes, spokesman Etsuya Uchiyama said.

State-owned Air India, which on Monday took delivery of the sixth of the 27 Dreamliners it has ordered, said precautionary measures were already in place and its planes were flying smoothly. "It's a new plane and some minor glitches do happen. It's not a cause of concern," said spokesman G.Prasada Rao.

Air China, which sees the 787 as a way to expand its international routes, and Hainan Airlines also said they were keeping their orders for 15 and 10 of the planes respectively. China Southern Airlines, which has 10 787s on order and should be the first Chinese airline to fly the plane, was not immediately available to comment.

"New airplanes more or less will need adjustments and currently we have no plans to swap or cancel orders," said an executive at Hainan Airlines, who was not authorized to talk to the media and did not want to be named.

Delivery of the aircraft to Chinese carriers has been held up as the local aviation regulator has yet to approve the plane. [ID:nL4N0AC49A] Hainan Airlines expects to take delivery of its first 787 around the mid-year - some 10 months late.

Other carriers already flying the Dreamliner are Ethiopian Airlines, Qatar Airways, LAN Airlines, LOT Polish Airlines and United Airlines, according to Boeing data.
40 GALLON SPILL

The fuel leak on Tuesday was noticed at about 12:25 p.m. ET (1725 GMT), after the plane had left the gate in preparation for take-off to Tokyo. About 40 gallons spilled, and the jet was towed back to the gate, where passengers disembarked, said Richard Walsh, a spokesman for state transportation authority Massport. The plane departed about four hours behind schedule and was due to arrive at the Japanese capital's Narita airport on Wednesday evening.

No passengers or crew were injured in either incident, though firefighters were called out on both occasions.

Boeing shares fell nearly 2.7 percent on Tuesday, following a 2 percent drop on Monday - wiping around $2.8 billion off its market value, or more than a dozen Dreamliners at list price.

While many Wall Street analysts rate Boeing stock a 'buy' or 'outperform' - the manufacturer has delivered jets faster than the market predicted - some noted the potential for the combination of a fire and a fuel leak to affect public perception of Boeing and the new aircraft.

People working at OG Travel and Eurex, travel agents in Tokyo, said they had not seen any impact on reservations on flights using the 787 aircraft. "I've not heard of any cancellations following these incidents," Eurex staffer Yasuhiro Hirashiki told Reuters.

Carter Leake, an analyst at BB&T Capital Markets in Virginia, downgraded Boeing shares, noting that fires are potentially lethal and electrical issues are tough to solve, though he and others stopped short of calling it a game changer for the Seattle-based manufacturer.

"We're getting to a tipping point where they go from needing to rectify problems to doing major damage control to the image of the company and the plane," said Richard Aboulafia, a defense and aerospace analyst with Teal Group, a consulting firm based in Fairfax, Virginia.

"While they delivered a large and unexpected number of 787s last year, it's possible that they should have instead focused on identifying glitches and flaws, rather than pushing ahead with volume production," he said.

BATTERY FIRE
Monday's fire occurred on a 787 plane that had just arrived from Tokyo and whose 183 passengers and crew had departed.

The National Transportation Safety Board said on Tuesday a battery in the auxiliary power unit aboard the plane jet had suffered "severe fire damage" and that surrounding damage was limited to components and structures within about 20 inches. It said the power unit was operating when the fire was discovered.

Shares in GS Yuasa Corp, the Japanese firm that makes the Dreamliner batteries, fell around 5 percent in Tokyo on Wednesday after dropping 4 percent a day earlier.

Boeing said it was cooperating with the investigations, but it would be premature to go into detail as the fire probe was ongoing.

"However, nothing we've seen in this case indicates a relationship to any previous 787 power system events, which involved power panel faults elsewhere in the aft electrical equipment bay," the company said, referring to the area where the fire occurred.

The Wall Street Journal, citing a source, reported that United Airlines found improperly installed wiring in 787 electrical components associated with the auxiliary power unit, the same electrical system that caused Monday's fire. United spokeswoman Christen David said the carrier inspected its 787s after the Boston fire, but she declined to discuss the findings, or to confirm the Journal report.

The fuel leak comes after the Federal Aviation Administration last month ordered all 787s to be inspected after leaks were found on two aircraft, stemming, it said, from incorrectly assembled fuel line couplings that could result in loss of power or an engine fire.

Mechanical problems are not uncommon when new planes enter service and they often disrupt airline schedules, experts said.

"I think we're dealing here with a situation where this aircraft is over-scrutinized for a number of reasons, including the birth difficulties," said Michel Merluzeau, managing partner at G2 Solutions, a boutique defense and aerospace consulting firm in Seattle.

"Don't get me wrong. A battery fire is a very, very serious event. Especially a lithium-ion battery," he added. "And we don't know what the problem is. But the 787s is still a very safe aircraft to fly."

WRAPUP 2-Boeing Dreamliner incidents raise concerns about jet

By Alwyn Scott
    NEW YORK, Jan 9 (Reuters) - Boeing Co's 787
Dreamliner jet on Tuesday suffered its second mishap in two
days, with the same airline and at the same U.S. airport - the
latest in a series of setbacks that have heightened safety
concerns over the new aircraft.

 A fuel leak forced a 787 operated by Japan Airlines 
to cancel takeoff at Boston's Logan International Airport, a day
after an electrical fire on another 787 after a JAL flight to
Boston from Tokyo.
    Asian customers rallied behind the U.S. planemaker, saying
the incidents were glitches that can happen on new planes and
confirming they had no plans to scale back or cancel orders for
the aircraft, which has a list price of $207 million.
    Japan is by far the biggest customer for the Dreamliner to
date, with JAL and All Nippon Airways (ANA) operating a
total of 24 of the 49 new planes delivered to end-December. The
aircraft entered commercial service in November 2011, more than
three years behind schedule after a series of production delays.
Boeing has sold 848 of the planes.
    JAL spokesman Kazunori Kidosaki said the carrier, which
operates seven Dreamliners, had no plans to change orders it has
placed for another 38 aircraft. ANA, which has 17 Dreamliners
flying its colors, said it was sticking with its orders for
another 49 of the planes, spokesman Etsuya Uchiyama said.
    
    State-owned Air India, which on Monday took delivery of the
sixth of the 27 Dreamliners it has ordered, said precautionary
measures were already in place and its planes were flying
smoothly. "It's a new plane and some minor glitches do happen.
It's not a cause of concern," said spokesman G.Prasada Rao.
    Air China , which sees the 787 as a way
to expand its international routes, and Hainan Airlines
 also said they were keeping their orders for 15 and
10 of the planes respectively. China Southern Airlines
, which has 10 787s on order and should be the first
Chinese airline to fly the plane, was not immediately available
to comment.
    "New airplanes more or less will need adjustments and
currently we have no plans to swap or cancel orders," said an
executive at Hainan Airlines, who was not authorized to talk to
the media and did not want to be named.
    Delivery of the aircraft to Chinese carriers has been held
up as the local aviation regulator has yet to approve the plane.
 Hainan Airlines expects to take delivery of its
first 787 around the mid-year - some 10 months late.
    Other carriers already flying the Dreamliner are Ethiopian
Airlines, Qatar Airways, LAN Airlines, LOT Polish
Airlines and United Airlines, according to
Boeing data.    
    
    40 GALLON SPILL
    The fuel leak on Tuesday was noticed at about 12:25 p.m. ET
(1725 GMT), after the plane had left the gate in preparation for
take-off to Tokyo. About 40 gallons spilled, and the jet was
towed back to the gate, where passengers disembarked, said
Richard Walsh, a spokesman for state transportation authority
Massport. The plane departed about four hours behind schedule
and was due to arrive at the Japanese capital's Narita airport
on Wednesday evening.
    No passengers or crew were injured in either incident,
though firefighters were called out on both occasions. 
    Boeing shares fell nearly 2.7 percent on Tuesday, following
a 2 percent drop on Monday - wiping around $2.8 billion off its
market value, or more than a dozen Dreamliners at list price.
    While many Wall Street analysts rate Boeing stock a 'buy' or
'outperform' - the manufacturer has delivered jets faster than
the market predicted - some noted the potential for the
combination of a fire and a fuel leak to affect public
perception of Boeing and the new aircraft.
    People working at OG Travel and Eurex, travel agents in
Tokyo, said they had not seen any impact on reservations on
flights using the 787 aircraft. "I've not heard of any
cancellations following these incidents," Eurex staffer Yasuhiro
Hirashiki told Reuters.
    Carter Leake, an analyst at BB&T Capital Markets in
Virginia, downgraded Boeing shares, noting that fires are
potentially lethal and electrical issues are tough to solve,
though he and others stopped short of calling it a game changer
for the Seattle-based manufacturer.
    "We're getting to a tipping point where they go from needing
to rectify problems to doing major damage control to the image
of the company and the plane," said Richard Aboulafia, a defense
and aerospace analyst with Teal Group, a consulting firm based
in Fairfax, Virginia. 
    "While they delivered a large and unexpected number of 787s
last year, it's possible that they should have instead focused
on identifying glitches and flaws, rather than pushing ahead
with volume production," he said.
    
    BATTERY FIRE
    Monday's fire occurred on a 787 plane that had just arrived
from Tokyo and whose 183 passengers and crew had departed. 
    The National Transportation Safety Board said on Tuesday a
battery in the auxiliary power unit aboard the plane jet had
suffered "severe fire damage" and that surrounding damage was
limited to components and structures within about 20 inches. It
said the power unit was operating when the fire was discovered.
    Shares in GS Yuasa Corp, the Japanese firm that
makes the Dreamliner batteries, fell around 5 percent in Tokyo
on Wednesday after dropping 4 percent a day earlier.
    Boeing said it was cooperating with the investigations, but
it would be premature to go into detail as the fire probe was
ongoing.
    "However, nothing we've seen in this case indicates a
relationship to any previous 787 power system events, which
involved power panel faults elsewhere in the aft electrical
equipment bay," the company said, referring to the area where
the fire occurred. 
    The Wall Street Journal, citing a source, reported that
United Airlines found improperly installed wiring in 787
electrical components associated with the auxiliary power unit,
the same electrical system that caused Monday's fire. United
spokeswoman Christen David said the carrier inspected its 787s
after the Boston fire, but she declined to discuss the findings,
or to confirm the Journal report.
    The fuel leak comes after the Federal Aviation
Administration last month ordered all 787s to be inspected after
leaks were found on two aircraft, stemming, it said, from
incorrectly assembled fuel line couplings that could result in
loss of power or an engine fire.
    Mechanical problems are not uncommon when new planes enter
service and they often disrupt airline schedules, experts said.
    "I think we're dealing here with a situation where this
aircraft is over-scrutinized for a number of reasons, including
the birth difficulties," said Michel Merluzeau, managing partner
at G2 Solutions, a boutique defense and aerospace consulting
firm in Seattle. 
    "Don't get me wrong. A battery fire is a very, very serious
event. Especially a lithium-ion battery," he added. "And we
don't know what the problem is. But the 787s is still a very
safe aircraft to fly."

Japan Airlines says no plans to change Boeing 787 orders

Jan 9 (Reuters) - Japan Airlines has no plans to change placed orders of 38 Boeing 787 Dreamliner jets following two mishaps in two days on the same aircraft this week, company spokesman Kazunori Kidosaki said on Wednesday.

Japan Airlines has ordered a total of 45 Boeing 787 Dreamliners, including seven it is already operating.

Morito Takeda, a second Japan Airlines spokesman, said six of those seven aircraft are flying as usual. The seventh is at Boston's Logan International Airport.

All Nippon Airways Co, which has placed orders for 66 Dreamliner aircraft including 17 that are already operating, also has no plans to change its orders, said spokesman Etsuya Uchiyama.

Emirates Wants to Extend Qantas Pact for Pacific Routes

Emirates, the airline with the most international traffic, said it wants to extend its alliance with Qantas Airways Ltd. (QAN) across the Pacific Ocean, allowing passengers to fly around the world on Airbus SAS A380s.

The carriers have scope to link Qantas’s A380 flights into Los Angeles with routes the Gulf carrier seeks to operate from its Dubai hub, Emirates President Tim Clark said in a phone interview. The partnership won provisional approval from Australia’s antitrust regulator last month.

“If the timing is right and the two aircraft meet, with Qantas and Emirates you could go around the world with A380s,” he said yesterday. “I’m sure we could do trans-Pacific business on Qantas metal as part of this overall deal.”

Emirates would push for the alliance’s extension into trans-Pacific routes only if Qantas’s Chief Executive Officer Alan Joyce and his management back the idea, Clark said. Shares of the Sydney-based airline have risen 39 percent since the partnership was announced in September, as Joyce restructures operations to end overseas losses.

“I would think Qantas would have mixed emotions about that,” Peter Harbison, executive chairman of consultants CAPA Centre for Aviation, said by telephone from Sydney. “It’s a market where they are still dominant.” Routes across the Pacific are some of its most profitable, he said. “You just have to go online and check the pricing to see it.”

‘Qantas Territory’

Qantas fell 0.6 percent to A$1.565 at the close in Sydney, their sharpest fall since Dec. 14. The S&P/ASX 200 index also slipped 0.6 percent.

The Australian carrier is currently focused on getting approval for its existing alliance and moving its European hub to Dubai, Luke Enright, a spokesman for the airline, said by e- mail.

“Qantas sees lots of potential for our global partnership with Emirates,” he said.

Clark said a tie-up across the Pacific Ocean was left out of the discussions for the current Emirates-Qantas alliance because “the trans-Pacific is Qantas territory.”

Still, the regulator’s initial approval doesn’t prevent the carriers from exploring the option, he said. While the alliance will focus on long-haul routes to Europe and within Australia, the airlines want regulatory approval to work together worldwide, according to an Oct. 10 submission.

The companies could also link their routes into Dallas, the hub for AMR Corp. (AAMRQ)’s American Airlines, and Qantas could also fly the Boeing Co. (BA) 787 into Dubai once it starts receiving the composite-bodied planes, Clark said.

Deal ‘Energizing’

With budget carrier Jetstar, Qantas has just under half of about 33,000 seats available each week on flights between Australia and the continental U.S., Canada and Hawaii, according to data from CAPA.

Its main domestic rival, Virgin Australia Holdings Ltd. (VAH), has about 10,000 seats on its own aircraft and those operated by its partners, Delta Air Lines Inc. and Hawaiian Airlines Inc., the data show.

The deal between Qantas and Emirates was “energizing” regional airlines to strike new alliances, Clark said, citing a recent code-share agreement between Air New Zealand Ltd. and Cathay Pacific Airways Ltd., and Singapore Airlines Ltd. (SIA)’s decision to take a 10 percent stake in Virgin Australia.

China Eastern Accord

“All sorts of arrangements are taking place that you wouldn’t have even thought about,” he said.

China Eastern Airlines Corp., which operates code-share arrangements on Qantas flights into mainland China through its hub in Shanghai, is also now pushing to deepen that alliance, the Australian Financial Review reported today, citing its Oceania head Kathy Zhang.

Liu Shaoyong, the Chinese carrier’s chairman, will visit Sydney this month to advance talks on the tie-up, the newspaper quoted Zhang as saying. The two airlines are setting up a Hong Kong low-cost carrier under the Jetstar brand.

Shen Xiaosheng, a spokesman for the Shanghai-based airline, didn’t immediately respond to an e-mail seeking comment on the report.

Under the planned accord due to start in April, Emirates and Qantas intend to coordinate pricing, sales and scheduling, as well as aligning frequent-flier programs so passengers can earn points on both carriers’ flights. Emirates will gain access to Qantas’s Australia and New Zealand network under the deal.

Emirates is also studying ways to increase the range of the aircraft to allow it to run services to Los Angeles, as well as Houston and San Francisco, Clark said, and may need as many as 30 more of the double-decker jumbos.

India Airlines

It won’t make any bids for Jet Airways India Ltd. (JETIN) or Kingfisher Airlines Ltd. (KAIR), he said, because Indian carriers lack the control of operations, finances and their workforces that Emirates sees as necessary.

Jet is in talks with Etihad Airways PJSC, based in Dubai’s neighboring emirate of Abu Dhabi, about a stake sale, the Indian company said Jan. 3.

“If the Indians themselves can’t make a go of it -- if Vijay Mallya can’t, and Naresh is struggling, and Air India?” Clark said, referring to Kingfisher’s Chairman Mallya, his counterpart at Jet, Naresh Goyal, and the state-owned carrier. “If they can’t make it work, then who can?”



http://www.bloomberg.com

U.S. Stocks Fall Before Corporate Earnings Season Starts

U.S. stocks fell, sending the Standard & Poor’s 500 Index down for a second straight day, as investors awaited the start of the corporate earnings season.

Yum! Brands Inc. (YUM), the owner of the Taco Bell and KFC fast- food chains, retreated 4.2 percent as same-store sales fell more than projected in China after a government probe into one of its former suppliers hurt demand. GameStop Corp. (GME), the world’s largest video-game retailer, tumbled 6.3 percent amid a narrower sales forecast. Alcoa Inc., the largest U.S. aluminum producer, rose 0.9 percent at 4:29 p.m. as sales beat estimates.
The S&P 500 fell 0.3 percent to 1,457.15 at 4 p.m. New York time. The Dow Jones Industrial Average lost 55.44 points, or 0.4 percent, to 13,328.85. About 6.2 billion shares changed hands on U.S. exchanges, in line with the three-month average.
“We’re waiting for earnings to come out,” said John Manley, who helps oversee about $212 billion as chief equity strategist for Wells Fargo Advantage Funds in New York. He spoke in a telephone interview. “Valuations are far from excessive. Yet we’ve had a strong rally very quickly. Now the market is adjusting.”
Stocks had the biggest gain in 13 months last week as lawmakers passed a bill averting spending cuts and tax increases known as the fiscal cliff. Fourth-quarter profits from S&P 500 companies probably increased 2.9 percent, according to analysts’ estimates compiled by Bloomberg. That would be the second- slowest quarterly growth since 2009, the data show.

Alcoa’s Results

Alcoa Inc. (AA), traditionally the first company in the Dow to report quarterly results, rose 0.9 percent to $9.18 after the close of regular trading. Sales fell to $5.9 billion from $5.99 billion, beating the $5.6 billion average of 11 estimates. Profit excluding a gain on the sale of a power plant and other one-time items was 6 cents a share, matching the average of 20 estimates compiled by Bloomberg.
Yum slid 4.2 percent to $65.04. KFC sales in China in the last two weeks of December had a “significant impact” from “adverse publicity associated with a government review of China poultry supply,” the company said yesterday. China same-store sales fell 6 percent in the fourth quarter, compared with a previous estimate for a decline of 4 percent.
GameStop dropped 6.3 percent to $23.19. The company, which in November said it would close 200 stores because of a “tough video game market,” said comparable-store sales for the fiscal year ending this month will fall between 7.5 percent and 9 percent. The company previously forecast sales to drop between 6 percent and 9 percent.

Boeing Slumps

Boeing Co. (BA) retreated 2.6 percent to $74.13 after being downgraded to hold from buy at BB&T Capital Markets by equity analyst Carter Leake. The shares tumbled 2 percent yesterday after a 787 Dreamliner operated by Japan Airlines Co. caught fire on the ground at Boston’s Logan International Airport.
Sears Holdings Corp. slumped 6.4 percent to $40.16. Lou D’Ambrosio is stepping down as chief executive officer and Chairman Edward Lampert will take over the job as the billionaire hedge fund manager works to revive the retailer.
The sudden departure of D’Ambrosio, 48, was prompted by family health matters, the Hoffman Estates, Illinois-based company said yesterday in a statement. Lampert, 50, will take over at the end of the company’s fiscal year on Feb. 2.
Genworth Financial Inc. slid 3.5 percent to $8.04. The insurer that brought on a new chief executive officer last week declined after Credit Suisse Group AG downgraded the company on risks from long-term care coverage.

Analysts’ Ratings

AutoZone Inc. (AZO) dropped 2.2 percent to $348.25. The Memphis, Tennessee-based auto-parts retailer was cut to underweight from equal weight by Morgan Stanley analyst David Gober, who said AutoZone is “likely not a great stock in 2013.”
Halliburton Co. retreated 1.3 percent to $36.19. The world’s largest provider of hydraulic-fracturing services was downgraded to neutral from overweight at JPMorgan Chase & Co.
Monsanto Co. (MON) added 2.7 percent to $98.50. The world’s biggest seed company posted first fiscal-quarter earnings that surpassed analysts’ estimates and boosted its full-year forecast as corn-seed sales climbed in Latin American and the U.S.
Occidental Petroleum Corp. gained 2.3 percent to $81.72. The largest onshore crude producer in the continental U.S. rose after reaching half its 2013 target for drilling cost cuts.
Celgene Corp. rallied 6.6 percent to $91.41. The world’s fourth-largest biotechnology company was raised to outperform from sector perform at RBC Capital Markets by equity analyst Michael Yee. The 12-month share-price estimate is $100.
The Chicago Board Options Exchange Volatility Index, known as the VIX, fell 1.2 percent to 13.62 in New York today. It tumbled 40 percent over the past six sessions, the biggest decline since November 2008.

Bull Market

The bull market in U.S. equities that began in 2009 may end this year, followed by a drop of as much as 30 percent in the S&P 500 by next year, according to technical analysts at UBS AG.
The S&P 500 may gain 7.4 percent to as high as 1,570 forming a top for the 116 percent rally from March 2009 in late summer this year, Michael Riesner and Marc Mueller in Zurich wrote in a report yesterday. A “cyclical” bear market will then follow, with the gauge dropping as low as 1,100 by 2014, they added. The measure fell 0.3 percent to 1,461.89 yesterday.
“The March 2009 cyclical bull market is moving into a mature stage and in this context, we see the S&P 500 and risk assets moving into a major top in 2013, followed by a new cyclical bear into 2014,” the analysts wrote in the note.
They said the benchmark gauge began a long-term bearish pattern in 2000 which, in turn, consisted of medium-term, or cyclical, ups and downs. One part of this was the increase from 2009, which is now looking to reverse based on a triangular pattern called the rising wedge forming on its price chart, the analysts said.


http://www.bloomberg.com 

Boeing 787 Dreamliner Fire Probed, Blaze Adds to Setbacks

U.S. officials are investigating a fire aboard a Boeing Co. (BA) 787 Dreamliner in Boston after a Japan Airlines Co. (9201) flight from Tokyo, the latest setback for the jet following several groundings last month.

Flames about two feet (0.6 meter) high shot out of an avionics bay in the jet’s belly yesterday as the plane sat at a Logan International Airport gate before its next departure, and there was a small explosion, Massachusetts Port Authority Fire Chief Robert Donahue said in an interview. Japan Airlines, which has seven 787s, won’t ground other Dreamliners.

Boeing’s newest model has been plagued by incidents since entering commercial service in late 2011, and a previous fire in the avionics bay forced the test fleet to be parked in 2010. Electrical faults in December forced United Continental Holdings Inc. (UAL) and Qatar Airways Ltd. to ground 787s, the first jet with a fuselage made chiefly of composite materials instead of aluminum and with an all-electric power system.

“In-flight fires are very serious,” said John Cox, a former airline pilot who now consults on safety issues with Washington-based firm Safety Operating Systems. “Although this happened on the ground, the idea that there was a fire on board means that this needs to be carefully evaluated.”

Japan Airlines said its 787 service to Boston from Tokyo today will fly as scheduled. Yesterday’s return trip to Tokyo was canceled, Sze Hunn Yap, a spokeswoman, said today in a telephone interview.

Smoke

The smoke was traced to a fire from the battery used for the auxiliary power unit, Japan Airlines said in a statement today, as the U.S. National Transportation Safety Board and Federal Aviation Administration began their own inquiries. The unit, which is made by United Technologies Corp. (UTX), is designed to provide electricity when the engines are off.

GS Yuasa Corp. (6674) made the battery involved in the 787 fire and it’s cooperating with the investigation, Tsutomu Nishijima, a spokesman for the Kyoto-based company said by phone. GS Yuasa isn’t aware of the reason for the fire, he said.

The company’s shares declined 4 percent to 335 yen in Tokyo trading today, the biggest drop since Oct. 23.

Japan Airlines gained 1.1 percent to 3,780 yen in Tokyo trading today. The company has checked the batteries of five of its 787 aircraft and inspection of the sixth will be completed by 6 a.m. tomorrow, spokesman Taro Namba said.

ANA’s Checks

All Nippon Airways Co., the initial operator of the 787, received a communication from the transport ministry to check all its 787s and the company will inspect the batteries on all its 787s by today, spokesman Ryosei Nomura said by phone.

ANA, as the carrier is also known, wasn’t doing anything different with its fleet in light of the Japan Airlines incident, said Nao Gunji, a spokeswoman. Boeing said it wasn’t making any changes to its test-flight plans for other 787s, either.

The NTSB sent an investigator to Boston, said Kelly Nantel, a spokeswoman. The FAA, the agency that certified the jet’s design in 2011, said it also is looking into the fire.

“Anything that involves a fire does not get the luxury of being called a teething problem,” said Carter Leake, an analyst at BB&T Capital Markets in Richmond, Virginia, and a former military and commercial airline pilot. “Boeing needs to get ahead of this quickly, because now you run the risk of getting into a passenger aversion issue.”

Stock Drops

While last month’s Qatar Airways failure came on the plane’s delivery flight, a United jet had to make an emergency landing in New Orleans while carrying passengers to New Jersey’s Newark airport from Houston.

Debris in an electrical panel on a Dreamliner sparked an in-flight fire in late 2010, before the plane entered service, grounding the entire test fleet for six weeks and forcing a redesign of parts of the system that added six months to more than three years of delivery delays on the plane.

Boeing fell 2 percent yesterday to $76.13 at the close in New York in the biggest decline since Nov. 14. That pared the shares’ gain in the past year to 2.9 percent.

“We are aware of the event, and we are working with our customer,” said Marc Birtel, a spokesman at Boeing’s commercial headquarters in Seattle.

Flight 008

Flight 008 arrived at Logan International Airport at 10:06 a.m. Boston time with 183 passengers and crew, Japan Airlines said in a statement. Everyone was off the plane when a mechanic observed smoke in the cockpit at 10:30 and alerted the fire department, Donahue said.

The blaze broke out under the cabin in an avionics bay that also houses batteries for the APU, said Richard Walsh, a spokesman for Massport, the airport operator.

Firefighters from Massport and the Boston Fire Department discovered smoke throughout the cabin and used hand-held infrared detection devices to locate the blaze, Donahue said.

It took about 20 minutes to extinguish the fire, using a gas called Halotron that displaces oxygen in electronics fires. Shortly afterward, there was a small explosion in the compartment that Donahue said probably came from a battery pack. A dry chemical powder was used to put that out, he said.

The 787 includes several lithium-ion rechargeable batteries to power electronics and other equipment, according to FAA records. The FAA imposed special conditions in 2007 on the use of lithium-based batteries because they are a greater fire hazard than other battery technologies.

No Heat

Lithium batteries burn violently and cannot be easily extinguished, according to FAA and NTSB tests.

The FAA said in rules published in the Federal Register that the batteries must be designed to prevent overheating. If a battery did fail, it should not release dangerous gases or damage nearby wiring, according to agency records.

Leake, the BB&T analyst, said any connection between yesterday’s incident and previous faults would mean that “the ante has been upped.”

“The system should always be designed to isolate, and you should never generate enough heat for a fire,” said Leake, who formerly worked at Canadian planemaker Bombardier Inc. He has a buy rating on Boeing.

There were no injuries yesterday, though one firefighter was evaluated for skin irritation, Donahue said. Airport firefighters had trained with Boeing on the Dreamliner, which familiarized them with the plane and made their work more efficient, he said.

‘Introductory Squawks’

The plane that caught fire was delivered to Japan Airlines last month, the seventh 787 the carrier had received after getting its first in March. It still has another 38 on order, according to Boeing’s website.

In July, an engine component on a 787 intended for Air India fractured, spewing shards of metal and sparking a brushfire as the plane prepared for its first flight in South Carolina. The FAA ordered in December that Dreamliners be inspected after fuel leaks on two planes were traced to manufacturing errors.

Boeing Chief Executive Officer Jim McNerney has characterized the previous incidents on the 787 as “normal introductory squawks” for a new model.

The planemaker has delivered about 50 Dreamliners to eight customers since All Nippon received the first one in September 2011. Boeing is doubling the jet’s production rate this year to 10 a month to fill orders for about 800 Dreamliners, which are valued at about $225 million at the average list price.



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Japan Air Aborts Boeing 787 Flight as Leak Follows Fire

Boeing Co. (BA) suffered another image setback for its 787 plane after a fuel leak on a Japan Airlines Co.-operated Dreamliner at Boston delayed a flight to Tokyo, a day after a fire broke out on another plane at the same airport.

An open fuel valve caused kerosene to leak from the plane, delaying take-off until mechanics could close it, Seiji Takaramoto, a spokesman at Japan Airlines said by telephone today. About 40 gallons of fuel spilled on the ground at Logan International Airport yesterday, said Matthew Brelis, a spokesman for airport operator Massport.

The incidents are the latest to plague the world’s first jet with a fuselage made chiefly of composite materials after it entered commercial service in late 2011, more than three years behind schedule. Boeing, which said today it has “complete confidence” in the new model, is set to double production of the 787 this year to help fill remaining orders for about 800.

“Unfortunately the aircraft is known now for its problems, not for the performance it delivers and the enhanced safety features,” said Michel Merluzeau, an analyst with G2 Solutions in Kirkland, Washington.

Japan Airlines, with a fleet of seven 787 Dreamliners, will check why the fuel valve wasn’t closed after the plane arrives back in Tokyo later today, Takaramoto said. The carrier completed checks on batteries after the 787 fire in Boston and no problems were found on the other six aircraft, he said.

Shares Drop

The carrier, which returned to the stock market last year after a trip through bankruptcy and a turnaround that included shedding more than a third of workers, fell 0.4 percent to 3,765 yen at close of Tokyo trading. That was the biggest decline since Dec. 28, according to data compiled by Bloomberg.

Boeing fell 2 percent to $74.13 in New York trading yesterday, extending on its 1.6 percent fall on Jan. 7. It’s the biggest two-day decline for the stock in more than seven months. More than 20 million shares changed hands, exceeding four times the average daily volume in the 12 months.

GS Yuasa Corp. (6674) made the lithium ion battery on the 787 and is cooperating with the investigation, Tsutomu Nishijima, a spokesman for the Kyoto-based company, said yesterday. GS Yuasa isn’t aware of the reason for the fire, he said. The battery maker fell 0.3 percent to 334 yen at close of trading today.

“The safety of flight of the aircraft isn’t in question -- I can guarantee this is a much safer airplane than the 767 it’s replacing -- but it shapes the perception of the community and operators and passengers as to what it’s known for right now,” said Merluzeau.

United Inspections

The U.S. National Transportation Safety Board, which is investigating the Jan. 7 fire, said yesterday that the blaze caused “severe” damage near a battery rack in an electronics bay.

“There’s a fine line between a new airplane with glitches and a new airplane with problems, and I’m worried the 787 is crossing the line to problems,” Henry Harteveldt, an aviation analyst at Hudson Crossing in San Francisco, said in a telephone interview.

United Continental Holdings Inc. (UAL) inspected all six of its 787s following Jan. 7’s Japan Airlines fire, Mary Ryan, a spokeswoman said yesterday. She declined to reveal the results and said Chicago-based United continues to work with Boeing on the 787’s reliability.

United canceled both the inbound and outbound Los Angeles- Tokyo flights on Jan. 7 that were supposed to have been flown with a 787 and used a different aircraft, said Ryan, who declined to give a reason for the cancellations. Those flights were due to be flown with a Dreamliner yesterday, she said.

No Linkage

“Nothing that we’ve seen in this case indicates a relationship to any previous 787 power system events, which involved power panel faults elsewhere in the aft electrical equipment bay,” Lori Gunter, a Boeing spokeswoman, said in an e-mailed statement yesterday.

Fuel leaks in November were traced to manufacturing errors, spurring Boeing and the U.S. Federal Aviation Administration to direct inspections and repairs, and Japan Airlines said Dec. 5 it had repaired its 787s.

The NTSB isn’t investigating the leak, which is being reviewed by the FAA. Boeing is aware of the leak and is “working with our customer,” Julie O’Donnell, a company spokeswoman, said yesterday.

Air India Ltd.’s fleet of 787s is “operating smoothly,” the carrier’s spokesman G. Prasada Rao said in New Delhi today. The airline received its sixth Dreamliner on Jan. 7. Boeing has agreed to modify the electrical system on one of the planes by March after providing an “interim solution’ to a fault detected in September, he said.

‘Complete Confidence’

‘‘We have complete confidence in the 787 and vow to take care of any issues our customers are experiencing,’’ Randy Tinseth, Boeing’s marketing chief, said in a blogpost today, adding that the model has flown more than 50,000 hours.

This is a crucial year for the 787 as Chicago-based Boeing increases deliveries and production, trying to get out from under the weight of seven delays to the plane’s introduction that spanned three and a half years.

Yesterday’s Boston-to-Tokyo Japan Airlines flight, which had been due to depart at noon, left at 3:47 p.m. local time with 170 passengers and 11 crew members, Carol Anderson, an airline spokeswoman, said in an e-mail.

‘‘The 787 is a high-profile plane, so it’s getting more media play than if the same thing was happening on a 737,” Michael Derchin, an analyst at CRT Capital Group in Stamford, Connecticut, said in a telephone interview. “Mechanical issues happen all the time, but you don’t hear about them.”

Smoke Detected

In Jan. 7’s incident, a mechanic noticed smoke as he walked through the jet after passengers had disembarked from their flight from Tokyo. The smoke was traced to a fire from the battery used for the auxiliary power unit, Japan Airlines said in a statement.

All Nippon Airways Co. (9202), the initial operator of the 787, found no problems with the batteries on its 787s after checking them yesterday following a request from Japan’s transport ministry, Megumi Tezuka, a spokeswoman at the airline said by telephone today.

An in-flight fire in an avionics bay in 2010 forced the 787 test fleet to be parked for six weeks and added six months to the delay of the plane’s entry into service while engineers rewrote electricity-distribution software. That fire was traced to debris in an electrical panel, which is in the same bay under the cabin as the batteries in question.

Last month, electrical faults forced United and Qatar Airways Ltd. to ground 787s. The plane is the first commercial airliner made chiefly of composite materials, instead of aluminum, and with an all-electric power system that uses five times as much electricity as other, similar jets.



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Boeing Poised to Keep Crown From Airbus on 787

(Corrects date of A350’s entry into service to 2014 in 15th paragraph of story published on Jan. 3.)

Boeing Co. (BA) is poised to keep the title of world’s largest planemaker for at least two more years amid rising deliveries of the delayed 787 Dreamliner, the jet that helped it beat Airbus SAS (EAD) for the first time in a decade.

 

Production of the 787 Dreamliner, the new composite-plastic jet that was more than three years behind when it entered service in late 2011, is set to double this year to a wide-body record of 10 jets a month. Photographer: Andrew Harrer/Bloomberg 

Boeing shipped 46 Dreamliners last year, pushing total commercial jet deliveries one higher than its top forecast of 600. Airbus, which had held the No. 1 spot since 2003, handed over 516 jets through November out of a yearlong goal of 580. The European planemaker won’t report 2012 data until Jan. 17.

While neither has given forecasts yet for 2013, Chicago- based Boeing’s announced production increases indicate it will build more than 660 aircraft this year, compared with Airbus’s planned output of over 600. That would be a record for Airbus and contribute to a combined industry high.

“It’s the Dreamliner finally delivering on the dream,” said Yair Reiner, an analyst with Oppenheimer & Co. in New York who has an outperform rating on Boeing stock. “The aircraft that has been the bane of Boeing’s existence for so long finished 2012 exceeding Boeing’s stated expectations.”

The planemaker climbed 0.5 percent to $77.47 at the close of New York trading, the highest since May 2011.

Production of the 787, the new composite-plastic jet that was more than three years behind when it entered service in late 2011, is set to double this year to a wide-body record of 10 jets a month. Boeing is boosting total airliner output more than 60 percent in the four years through 2014 in response to customer demand for more fuel-efficient equipment.

Net Orders

Deliveries marked a 26 percent gain from 2011, when Boeing shipped 477 airliners and fell short of its target for 787s with just three. The company surpassed this year’s goal of as many as 42 Dreamliner deliveries by four.

Deliveries are important because that’s when planemakers get large bulk payments on the purchase price of a jet. While 2012 revenue will show a boost from the higher 787 deliveries, profit won’t be as enhanced because of the plane’s lower margins, Stephen Levenson, an analyst with Stifel Nicolaus & Co. Inc., wrote in a note today. Boeing reports earnings on Jan. 30.

Net orders climbed 49 percent to 1,203, led by purchases of single-aisle 737s, which more than doubled as Boeing offered an upgraded version with new engines. The total was the second- largest in the company’s history, boosting its backlog to a record 4,373 jets. Airbus had a target of 650 orders for 2012 and has already announced deals for more than 720 units.

Canceled Orders

“As I look at 2013, fundamentally it’s lining up a lot like we saw last year,” Randy Tinseth, Boeing’s marketing chief, said in an interview today. “We expect to see continued strong demand on the single-aisle side.”

Boeing won orders for 40 737s from unidentified customers in the past two weeks, according to an update today of its website tally. Orders were canceled for 25 of that model and for one 787.

Annual orders for 767s, 777s and 787s, all twin-aisle jetliners, fell from the previous year. Dreamliner orders ended the year in the negative, with 50 cancellations outstripping purchases by 12. Boeing still has unfilled orders for 799 of the new planes.

At Toulouse, France-based Airbus, output of the flagship four-engine A380 is sagging as the aircraft maker fixes a wing- component flaw that has caused cracking in parts of the plane. Airbus delivered 30 A380s in 2012.

‘The Solution’

Boeing is set to remain ahead of its rival in both 2013 and 2014, said Reiner and Howard Rubel, an analyst with Jefferies Group Inc. (JEF) in New York.

“After that, it will be whoever has the solution for that mid-range widebody, which they’re both going at hammer and tong,” Rubel said. Airbus’s new A350, the 787’s competitor, is scheduled to enter service in 2014.

Last year’s deliveries were a record for Boeing-labeled jets. The three other times in the 97-year-old company’s history when production was greater than 600 airliners each included now-discontinued models made by planemakers Boeing bought.

“What’s equally interesting is the large commercial transport market delivering over 1,200 airplanes, which will be the third record year in a row for deliveries,” Rubel said, referring to combined shipments by Airbus and Boeing. “We have it forecast as modestly up for the next two years, then we need traffic to really kick in again.”

Supply Chain

Airbus last year opted not to boost output of A320 family aircraft to 44 per month from 42, in part out of concern suppliers couldn’t keep pace.

“The challenge for both Airbus and Boeing will be to get the supply chain to deliver on the increased rates without any issues,” said Zafar Khan, a London-based analyst at Credit Suisse.

Boeing faces an additional risk meeting targets this year as the union representing 23,000 engineers and technical workers, mostly at Boeing’s manufacturing hub around Seattle, has warned of a possible strike.

Wage talks are set to restart Jan. 9, and the Society of Professional Engineering Employees in Aerospace has said it may call for a work stoppage the first week of February if no agreement is reached.



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New Berlin airport further delayed to 2014 - source

Jan 6 (Reuters) - The opening of Berlin's new airport will be delayed again to at least 2014, more than two years later than originally planned after a series of embarrassing setbacks to what was meant to be a flagship project, a source familiar with the plans said.

Nearly a quarter of a century after the Berlin Wall came down and 14 years after the government moved back to Berlin as the unified capital, Germany is still struggling to open an international airport to replace two from its Cold War past.

The opening of the Berlin-Brandenburg Airport had been re-scheduled to October 2013, after already being postponed several times already over the past year due to problems, for example, with its fire safety systems.

"There will be no opening this year," the source told Reuters, confirming reports in German media. The source said no new opening date had been scheduled yet.

The delays have been a headache for Germany's second-biggest airline Air Berlin in particular, which plans to use the new airport as a hub for lucrative intercontinental flights.

The airport aims to attract up to 27 million passengers a year initially, making it about half the size of Germany's main airport in Frankfurt and less than a third the size of the world's busiest airport in Atlanta.

The saga surrounding the airport has tarnished the image of Berlin mayor Klaus Wowereit, a Social Democrat who had made it his flagship project and who sits on its board.

Wowereit, known for his charismatic smile and popular touch, has governed Berlin since 2001.

Germany's first openly gay politician, he won re-election for a third term last September.

He gave the city its hip slogan "poor but sexy", and helped lure film and music companies, overseeing the transformation of Berlin from cold war outpost to bohemian hotspot for culture, night life and affordable living.

Opposition politicians in the Berlin assembly were quick to criticise Wowereit for not informing them of the latest postponement, despite apparently having been already aware of it in December.

The parliamentary leader of the Greens, Antje Kapek, called for a special meeting of the Berlin assembly this week, for Wowereit to explain himself.

The spokesmen for both Wowereit and the airport operator were not available for immediate comment. (Reporting By Holger Hansen; Writing by Sarah Marsh; Editing by Tim Dobbyn)

Boeing 787 fire at Boston airport renews safety concern

BOSTON/NEW YORK (Reuters) - Fire broke out on an empty Boeing Co 787 Dreamliner jet parked at a gate in Boston on Monday, putting safety concerns about the new, carbon-composite jet back in the spotlight and drawing attention from federal investigators.

Officials said the fire started when a battery in the Japan Airlines Co Ltd jet's auxiliary power system exploded around 10:30 a.m. ET, shortly after passengers deplaned.

A mechanic inspecting the jet discovered smoke in the cockpit while performing a routine post-flight inspection and reported it to authorities at Boston's Logan International Airport, officials said.

"Japan Airlines spokeswoman Carol Anderson later said smoke was not discovered in the cockpit. "Smoke was initially discovered by a maintenance staff in the rear end of the cabin, and confirmed by another maintenance staff who also detected smoke outside the aircraft," she said in an email.

The Federal Aviation Administration and the National Transportation Safety Board are looking into what caused the problem, which came just weeks after Boeing endured a string of other electrical problems that briefly grounded three of the planes. The new jet also has suffered an engine failure and fuel leaks in the 14 months it has been in service.

"I don't want to be an alarmist," said Carter Leake, an analyst at BB&T Capital Markets in Virginia. "But onboard fires on airplanes are as bad as it gets. Even though it happened on the ground, rest assured the FAA is asking 'What if it happened in the air?'"

The Chicago-based jet maker's shares closed down 2 percent at $76.13 after the news.

The electrical fire is troubling in part because the 787 relies heavily on electrical power to drive onboard systems that in other jet models are run by air pressure generated by the engines. The new jet also suffered an electrical fire during a test flight, prompting a redesign of electrical systems.

Boeing spokesman Marc Birtel said Monday, "We are aware of the event and are working with our customer." Other Boeing officials declined to comment.

Japan Airlines did not respond to several requests for comment.

The Dreamliner is Boeing's first jet to be made of carbon composites rather than aluminum, a change that lowers the plane's weight and allows it to burn less fuel.

The jet was plagued by production problems that delayed initial delivery by 3-1/2 years. Boeing currently has nearly 800 unfilled orders for the plane and is ramping up production from five per month to 10 a month this year.

Yet since entering service in October 2011, the plane has repeatedly made headlines for mechanical problems.

Last July, the FAA investigated an incident in which a 787 engine made by General Electric Co blew apart on the ground in South Carolina, prompting changes in how the engines are made, maintained and inspected. A similar engine failed on a Boeing 747 in Shanghai in September.

The Dreamliner's run of electrical mishaps began December 4, when a United Airlines flight from Houston to Newark, New Jersey, made an emergency landing after it appeared that one of its power generators failed. United later said an electrical panel was at fault. On December 13, Qatar Airways said it had grounded one of its three 787 jets because of the same problem United had experienced. On December 17, United said that a second 787 in its fleet had developed electrical issues.

Also in December, the FAA ordered inspections of 787s after fuel leaks were found on two aircraft operated by foreign airlines. The leaks stemmed from incorrectly assembled fuel line couplings, which could result in loss of power or engine fire, the FAA said.

In the latest incident, a fire crew determined that a battery used to power the plane's electric systems when the engines are not running had exploded. The mechanic was the only person on board the plane when the smoke was discovered and no one was hurt by the blaze.

"Passengers were in no danger as this event had happened at least 15 minutes after they deplaned," said Massport Fire Chief Bob Donahue.

In late December, Boeing Chief Executive Jim McNerney said the 787 has not experienced an unusual number of problems for a new aircraft, calling the problems "normal squawks."

But Monday's electrical fire raised questions about that view and is likely to make Boeing highly susceptible to any other issues that could arise on the aircraft.

Wing de-icing and cabin air conditioning systems on the 787 are electrical. If ventilation failed on a flight or the cockpit filled with smoke, the pilots would decompress the cabin to get air and would quickly dive to 10,000 feet, where oxygen levels and temperatures are survivable, said Leake, the analyst at BB&T Capital Markets, who is also a former commercial and military pilot.

He said normal teething issues for a new plane might include an engine shutting down at a gate, stuck landing gear or a malfunctioning lavatory. In contrast, an engine breaking up and a fire that fills the cockpit with smoke are "all squawks that, unfortunately for Boeing, could have severe consequences.

"Any electrical problem in the next 30 days, for whatever reason, which would be a normal teething problem, is going to be a big deal," he added. "It creates a perception issue."

Reuters

Boeing poised to regain title of world's largest planemaker

Airbus looks set to post sales of around 900 aircraft for 2012 and exceed its target of 580 deliveries after a record month in December, a Reuters analysis of industry figures shows.

A late surge in both orders and deliveries by the European firm was not enough to prevent Boeing regaining aviation's top spot in both sales and deliveries for 2012, but will likely put EADS unit Airbus ahead of its own targets.

Boeing Co. said it booked 1,203 net orders for planes and delivered 601 new jets in 2012, its best result since 2007.

Airbus and Boeing compete fiercely for control of the $100 billion jetliner market.

The European company had already conceded defeat as Boeing caught up with demand for revamped narrowbody jets in 2012, following a record lead by Airbus in the previous year.

But industry sources have said Airbus internally mounted a concerted effort to keep a market share of 40 percent, considered the lowest sustainable share in a duopoly such as the one it enjoys with Boeing, and is confident of reaching this.

Airbus declined to comment ahead of an annual presentation in Toulouse on Jan. 17.

Airbus would need to have sold around 900 aircraft in 2012 to reach its market share goal, suggesting as yet unreported orders for some 180 aircraft.

The figure tallies with market indications of brisk activity in December, though this was not enough to close the gap between Airbus and its U.S. rival for the year as a whole.

Airbus had sold 646 planes by the end of November and reported a further 75 during December, though the rest of that month's tally has not yet been published.

Airbus officially targets 650 orders for 2012.

Although Airbus exceeded its overall gross order target for 2012, it fell short of a specific target of 30 orders for the A380 superjumbo.

Questions also remain over its ability to reach an unpublished target, first reported by Reuters, of 300 current-generation A320s as airlines prefer newer fuel-saving models.

Deliveries also quickened sharply in December due to a backlog of planes, including A380 superjumbos held back for repairs following wing cracks identified early in 2012.

Based on third-party estimates and deliveries announced during December but not yet included in the official tally, Airbus looks likely to have exceeded its previous monthly record of 61 and could slightly exceed its 2012 target of 580 aircraft.

Aerospace analyst Scott Hamilton said Airbus was expected to have delivered around 580 aircraft in 2012.

Boeing earlier reported 601 deliveries in 2012 including 15 in a single 24-hour period in December, putting it on course to regain the crown as the world's largest planemaker for the first time in a decade. 

 

 

Reuters

Emirates Chief Says 30 More A380s Needed for New Routes

Emirates, the world’s biggest airline by international traffic, said it’s studying “ways and means” to accommodate an order for 30 more Airbus SAS A380 superjumbos.

Curfews at destination airports and a lack of space at the carrier’s Dubai base are the main constraints on lifting an existing order for 90 of the world’s biggest passenger planes to 120, President Tim Clark said today in an interview.
Emirates, the biggest A380 customer, has exploited the Gulf’s position at the heart of inter-continental flight paths to build a hub served by waves of departures, stripping traffic away from older network carriers in Europe and Asia. Clark said he’s mulling superjumbo flights to locations including Houston, Los Angeles and San Francisco as in-service enhancements to a model introduced in 2007 bring the cities within range.
“We know what we want to do, we know where we could put more than 90 A380s today,” the executive said by telephone from Dubai. “It’s a question of can we actually fit them in? The economics of Houston are very powerful. That would be an extremely attractive proposition.”

Water Tanks

Airbus has boosted the superjumbo’s performance by adding refinements such as a more aerodynamic wing profile. Emirates A380s flying today are already three or four tons lighter than when the carrier took its first planes, and other improvements from the Toulouse, France-based manufacturer are likely once fixes for wing cracks have been fully introduced, Clark said.
Emirates has meanwhile driven efficiencies via measures of its own such as curtailing water usage, Clark said. Only about 60 percent of the water carried on its A380s -- which feature onboard showers -- is actually used, and shrinking the tank could save four tons in weight.
Emirates added 15 destinations last year, including Rio de Janeiro, Buenos Aires, Barcelona and Seattle. The carrier also introduced a fifth daily A380 flight to London on Dec. 10, and has already this year announced extra superjumbo flights to New York John F. Kennedy and Paris Charles de Gaulle airports.
Adding long-haul routes can quickly “gobble up” new planes, Clark said, with a single daily frequency to Houston alone requiring 2.5 aircraft, making additional orders desirable.

Crowded Terminals

While the scope for new destinations is increasing, limited airport opening hours elsewhere and pressure on terminal capacity in Dubai are constraining growth, Clark said.
The opening on Jan. 2 of the first four of 20 A380-only gates at Dubai International Airport has been factored in to existing fleet plans, and landing slots and airspace over the United Arab Emirates may become scarce as Abu Dhabi-based Etihad Airways PJSC and budget carrier FlyDubai add flights, he said.
“The airspace management around us, that’s proving to be quite complex,” Clark said. “We’ve got many carriers in the U.A.E. growing at quite a pace.”
In the U.S., Emirates has commercial relationships with JetBlue Airways Corp. (JBLU) at Kennedy and Alaska Airlines in Seattle which allow for connecting flights, and Clark said he aims to “push into other points” with the former. Integrated schedules would allow for easier transfers, though the airlines need to be “careful” about antitrust and pricing issues, he said.

AMR Aim

Emirates is still seeking a deeper relationship with AMR Corp. (AAMRQ)’s American Airlines, Clark said, though the U.S. company’s management is focused on discussions about a merger with U.S. Airways Group as it plans to emerge from bankruptcy protection.
“It’s very much in the American Airlines bailiwick at the moment,” he said. “You know, you can take a horse to water, but that’s as far as we’ve gone.”
The two airlines already direct passengers to one another without a code-share arrangement, though he said it would be “very good” to have closer commercial ties, Clark said.

India Averse

The executive said that Emirates isn’t interested in bidding for a carrier in India following the relaxation of ownership rules there, even as Etihad considers investing in Jet Airways (India) Ltd. or Kingfisher Airlines Ltd. (KAIR)
“It’s a difficult operating environment,” Clark said. “It’s very difficult to get the job done. If the Indians themselves can’t make a go of it, who can? It’s not just operational control, financial control, its human resource, people control.”
India would be more attractive were outside bidders to be “fire-walled” against certain eventualities, as Emirates was when investing in SriLankan Airlines in 1998, Clark said, adding that such a plan would most likely be politically unacceptable.
Emirates also continues to favour tactical partnerships of the kind sealed in September with Qantas Airways Ltd. (QAN), the biggest Australian airline, over membership of one of the industry’s three global alliances, Clark said. That’s after Qatar Airways Ltd., the second-biggest Gulf carrier, said in October it would join the British Airways-led Oneworld group.
“We’re fairly simplistic in our execution of our business model,” he said. “I’ve lived and breathed this airline since we started. The notion that we should allow others to chart our destiny is anathema to the thinking certainly of me and others.”


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Fire discovered on Boeing Dreamliner minutes after flight lands

The fire in the Japan Airlines jet is found after a cleaning crew at Boston's Logan airport reported smelling smoke. The cause is under investigation.

 

A Boeing Co. 787 Dreamliner passenger jet was found to be on fire 15 minutes after arriving at Boston's Logan International Airport from Tokyo, adding to the list of complications for the 17-month-old jet.

The fire found smoldering Monday in the plane's underbelly after passengers had deplaned prompted the Federal Aviation Administration and the National Transportation Safety Board to look into the incident.

The Dreamliner program has had numerous problems over the years.


The first large-passenger Dreamliner was delivered in September 2011, more than three years late because of design problems and supplier issues. Recently, the plane has run into turbulence over concerns about its safety.

In December, the FAA ordered inspections of fuel line connectors because of risks of leaks and possible fires.

On the same day, a United Airlines Dreamliner flight from Houston to Newark, N.J., was diverted to New Orleans after an electrical problem popped up mid-flight. After accepting delivery of the aircraft just a month earlier, Qatar Air later said it had grounded a Dreamliner for the same problem that United experienced.

Scott Hamilton, an aviation industry consultant and managing director of Leeham Co. in Issaquah, Wash., said there wasn't much known yet about Monday's incident to draw conclusions.

The NTSB "is investigating to see if there is a nexus between the problems," Hamilton said. "But it's way too soon to draw conclusions about what this means for the airplane."

Monday's fire was reported at 10:37 a.m. EST after cleaners boarded the plane belonging to Japan Airlines Co. and smelled smoke in the cabin. All 173 passengers and a crew of 11 had already exited the plane at the gate, said Matthew Brelis, spokesman for the Massachusetts Port Authority, which owns and operates the airport.

"The cause and source of the fire are under investigation," Brelis said. "There were no injuries and no damage to the airport."

Firefighters used infrared equipment to determine the source of the smoke and found a strong heat signature in the rear of the aircraft, he said.

The fire was fought for about 20 minutes by about 40 emergency responders belonging to the Massport Fire Rescue Department, Boston Emergency Medical Services and Boston Fire Department. The job involved about 15 vehicles, Brelis said.

Airport spokesman Richard Walsh said that a second fire erupted after a battery exploded, though that wasn't confirmed by the Massachusetts Port Authority.

A firefighter was treated for skin irritation likely caused by the battery explosion, Walsh said.
The extent of damage to the aircraft was unknown.

NTSB spokesman Eric Weiss said an investigator had been sent to the scene.

"At this time, we're sending somebody to take a look at the airplane and gather information," Weiss said. "We should know more tomorrow."

Boeing spokeswoman Loretta Gunter said in a statement: "We are aware of the event and working with our customer. That's all we can offer at this time."

The Dreamliner, a twin-aisle aircraft that seats 210 to 290 passengers, is the first large passenger jet with more than half its structure made of composite materials (carbon fibers meshed together with epoxy) instead of aluminum sheets.

Major parts for the plane are assembled at various locations worldwide and then shipped to Boeing's facilities in Everett, Wash., where they are "snapped together" in three days once production hits full speed, compared with a month the conventional way.

william.hennigan@latimes.com

Copyright © 2013, Los Angeles Times

 

BB&T cuts Boeing, says 787 fire too serious to ignore

A string of electrical problems, including a fire, in Boeing Co's 787 Dreamliner jets are too critical to overlook and any further problem with the aircraft could prompt regulators to take severe action, said analysts at BB&T Capital Markets.

BB&T analyst Carter Leake lowered his rating on the stock to "hold" from "buy," saying it was prudent for investors to stay on the sidelines until the electrical problems were sorted out.

Boeing shares fell 2 percent to $74.90 in premarket trade on Tuesday.

A fire broke out on an empty 787 jet in Boston on Monday, putting safety concerns about the new, carbon-composite jet back in the spotlight.

This comes soon after 787s operated by United Airlines and Qatar Airways suffered problems with power generators in December.

"The FAA is not likely to take any immediate action," said BB&T analyst Leake.

"But the 787 has run out of mulligans, and even though this may be an unrelated battery issue, any new electrical event could have the FAA take more drastic measures to include the grounding of the fleet."

The Dreamliner, which is Boeing's first jet to be made of carbon composites rather than aluminum, relies heavily on electrical power to drive onboard systems that in other jet models are run by air pressure generated by the engines.

These electrical systems offer significant savings in weight, but the power required to drive them is almost four times more than that needed for the much larger 777, Leake said.

"Recent events suggest that something is amiss with how all of these new power hungry components are interacting once installed in the aircraft," Leake said.

Reuters

A Parked Boeing Dreamliner Caught Fire In Boston This Morning

An electrical fire started in a Boeing 787 Dreamliner parked at Boston's Logan International Airport this morning.

The plane was parked on the tarmac, with no passengers or crew on the plane, the Boston Globe reported.

Boston Fire Department spokesman Steve MacDonald said the fire was in the belly of the Japan Airlines aircraft, which flies between Tokyo and Boston.

The fire has been extinguished.

Boeing has been dealing with electrical issues in the Dreamliner in recent months: At least three airplanes were grounded in December due to problems in the planes' electrical distribution panel.

Also in December, the U.S. Federal Aviation Administration required that Boeing inspect its new 787s, after fuel leaks on two planes were reported.

Boeing CEO has dismissed such problems as "normal squawks."

Read more: http://www.businessinsider.com/boeing-dreamliner-787-catches-fire-in-boston--logan-2013-1#ixzz2HSuLN1gD

Delivery of Boeing Dreamliners to China held up

China said it has yet to approve U.S. planemaker Boeing's 787 Dreamliner, which has put on hold the delivery of the jet to the world's fastest growing aviation market.

China Southern Airlines Co Ltd , which has outstanding orders for 10 Dreamliner B787s, had expected to receive its first plane in 2012, but that has been delayed as the U.S. company has yet to receive certification from Chinese authorities.

Another Chinese airline, Hainan Airlines, which aimed to get five B787 airliners last year, also had to push back its schedule due to delayed certification, local media reported.

China has been increasingly assertive when it comes to exercising its right to independently certify the airworthiness of western-built aerospace equipment, such as engines, industry sources said.

Any aircraft has to obtain a certificate of airworthiness from the Civil Aviation Administration of China before it can enter the country.

"The approval process for the certification for the Boeing 787 aircraft is still in progress," the regulator said in an email reply to Reuters on Monday.

"The timing of the issue of the certificate will very much depend on the degree of cooperation of Boeing and U.S. Federal Aviation Administration (FAA). Currently the process is progressing smoothly," it added.

The Boeing 787 has already been certified by the FAA and European Aviation Safety Agency.

Boeing declined comment on its customers' delivery plans.

"We are working closely with our customers to finalise the delivery and ensure successful EIS (entry into service) of the 787 with our customers in China," it said in an emailed reply.

The aircraft, the first Boeing jet to be globally outsourced to suppliers around the world, was first delivered to Japan's All Nippon Airways in 2011 after being delayed for 3-1/2 years due to technical and other problems.

Boeing said China had firm orders for 35 B787 including 10 each from China Southern and Hainan Airlines, and another 15 from Air China Ltd.

In addition, Xiamen Airlines also announced orders for six 787s, pending government approval, it said.


http://www.chicagotribune.com

Sky Aviation Imports Sukhoi Mid-January

TEMPO.CO, Jakarta: Sky Aviation plans to bring one unit Sukhoi Superjet-100 in the middle of this month. "In 2013, five Sukhois will arrive in stages," Marketing General Manager Sutito Zaenuddin told Tempo on Jan. 6.

The first aircraft will ply the Makassar-Sorong, Sorong-Jayapura, Makassar-Mamuju, and Denpasar-Makassar routes.

Upon arrival in Indonesia, administrative procedures, including flight proofing, must be followed. "The plane will fly in early February," he said.

In 2010, the airline conducted an analysis prior to making its decision. "We chose Sukhoi. The most important thing was the price," said Sutito. The leasing costs ranged from US$ 250,000 to US$ 300,000.

Based on its needs, Sky Aviation compared Sukhois with similar plane types, Brazilian Embraers and Canadian Bombardiers, which had a capacity of less than 100 seats and could fit a runway with a length of less than 1,000 meters.

"Compared to its competitors, Sukhoi's price was more reasonable," said Managing Director Krisman Tarigan. In addition, its superior technology was of special consideration to the airline.

In Jan. 2013, Sky Aviation will bring in three Sukhoi Superjet-100s with a capacity of 87 seats. The remaining, with a capacity of 97 seats, will be delivered in subsequent months.




http://www.tempointeractive.com

Another Fire Hits a Boeing Dreamliner

U.S. aviation safety officials are probing an electrical fire that hit a three-week-old Boeing Co. BA -2.63% 787 Dreamliner on Monday just after passengers and crew had left a Japan Airlines Co. 9201.TO -0.40% flight at Boston's Logan International Airport.

The blaze comes at a sensitive time for Boeing, which is ramping up production to work through a backlog of almost 800 of the jets, which are made mostly of carbon-fiber composites rather than aluminum and have a more complex electrical system than most existing passenger planes.

The fire was in the aft electrical equipment bay, where electrical problems and an earlier in-flight Dreamliner fire have been reported. In 2010, an electrical fire in the same bay forced a Boeing test plane to make an emergency landing in Texas. More recently, a power panel in the bay prompted an emergency landing in New Orleans by a United Continental Holdings Inc. UAL -0.19% 787. 

"This [incident] goes to the heart of the innovative side of the 787," said Hans Weber, president of TECOP International Inc., an aviation consulting group that specializes in aircraft certification. Mr. Weber remained concerned that spate of electrical issues aboard the 787 could make it more difficult for the plane to fly extended missions far from diversion airports.

Boeing traced the cause of the 2010 fire to a stray item left inside a power panel, which—along with electrical software—was redesigned to prevent any repeat. It is still trying to determine what caused the panel problem in the United 787.

Glitches are common for new aircraft, but the 787 has faced a number of problems with its engines and electrical system in recent months. Boeing and airlines recently replaced power panels inside the bay on at least five Dreamliners stemming from the New Orleans emergency. A Qatar Airways 787 was grounded the same month for repairs after power panel issues.


The Massachusetts Port Authority said the jet, carrying 173 passengers and a crew of 11, had arrived safely in Boston at about 10:06 a.m. Monday local time after a 13-hour flight from Tokyo. The agency received a call about smoke in the cabin from a worker at 10:30 a.m., after passengers had already left the plane.

JAL spokeswoman Carol Anderson said in an emailed statement, "the smoke was traced to a fire from the battery used for the auxiliary power unit."

Richard Walsh, a Massport spokesman, said the jet's auxiliary power unit battery, which is housed in a small compartment known as the aft electrical equipment bay, exploded after crews believed the fire was extinguished. One firefighter suffered minor injuries from exposure to a fire suppressant, he added.

The auxiliary battery, made with lithium ion components, may have been damaged by a fire ax, exacerbating the situation, said a person familiar with the incident.

Boeing and JAL, which flies 787s from Tokyo to San Diego, Moscow, Singapore and Beijing, said they were investigating the incident.

The National Transportation Safety Board has not yet opened a formal investigation, but has dispatched personnel to the scene in Boston, according to spokesman Eric Weiss.

"We are aware of the event and are working with our customer," said Boeing spokesman Marc Birtel. He declined further comment.

The 787 was designed for long over-water routes between midsize cities that couldn't profitably accommodate a larger jet with more seats. It has had to meet a stringent set of regulations to ensure the jet can still fly safely in the event one of its two engines fail.

Those regulations include strict guidelines for the lithium ion batteries on the 787 because of concerns about the batteries' potential flammability.

During the 787's development, Boeing repeatedly affirmed that it complied with the expanded safety standards for the batteries, which are part of the aircraft's emergency power system.

Safety concerns about lithium ion batteries as cargo recently prompted some airlines to begin isolating shipments and enhancing fire suppression. The batteries are suspected of contributing to two jumbo-jet 747 freighter crashes since 2010.

The 787, the first jetliner made from a majority of lightweight carbon fiber composites, eliminates hot, heavy and hard-to-maintain pneumatic systems that power key parts of the jet.

Boeing's design is considered "more-electric," controlling parts of the aircraft such as the starting of the engines to the anti-ice system.

The aircraft was part of a group of seven Dreamliners delivered to six Boeing customers during a 25-hour period in late December, a record touted by the plane maker.

Video images of the affected plane and records from Flightaware.com indicate it was delivered to JAL on Dec. 20.

Boeing shares slid in the wake of reports of the incident, and were off 2%, or $1.56, at $76.13 in 4 p.m. New York Stock Exchange trading on Monday.

—Andy Pasztor contributed to this article. 

Write to Jon Ostrower at jon.ostrower@wsj.com and Jack Nicas at jack.nicas@wsj.com
 
Corrections & Amplifications
The National Transportation Safety Board hadn't opened a formal investigation as of Monday into the incident that caused an electrical fire on a Japan Airlines Boeing 787 Dreamliner at Boston's Logan International Airport. An earlier version of this article incorrectly said a formal investigation had been opened Monday.

A version of this article appeared January 8, 2013, on page B1 in the U.S. edition of The Wall Street Journal, with the headline: Another Fire Hits Dreamliner.