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Boeing 787 Grounding Puts Cities in Costly Holding Pattern

Wednesday, 6 Feb 2013 | 10:58 AM ET
Cities Hurt Most by Dreamliner Grounding
CNBC's Phil LeBeau reports which cities are impacted by the grounding of Boeing's 787 Dreamliner.

Almost three weeks since the Federal Aviation Administration grounded the Boeing 787 Dreamliner, several U.S. cities are facing a frustrating wait for the plane to get back in the air.

They are cities that have either seen the start of 787 international service or are scheduled to see it begin early this year. Now, due to the Dreamliner grounding, the financial impact of the delayed service could be substantial.

(Read More: Boeing Asks FAA to Lift Grounding of Dreamliners for Test Flights.)

Cities in Limbo

San Jose, Calif.

All Nippon Airways was less than a week into daily direct Dreamliner flights between San Jose and Tokyo when the Dreamliner was grounded.

(Read More: ANA Cancels All Dreamliner Flights for February.)

While the San Jose Airport authorities will not comment on the impact of losing those direct flights, some estimate the region is losing $214,000 a day in economic activity.

San Diego

In early December, Japan Airlines started direct Dreamliner service four times a week between San Diego and Tokyo. It was a major coup for San Diego to establish the direct service to Japan. To make it happen, the San Diego Airport committed $750,000 in marketing support and discounted landing fees for JAL at an estimated cost savings of $351,000.

Two weeks after the Dreamliner grounding, JAL resumed direct flights to San Diego using Boeing 777 planes in its fleet.

(Read More: Boeing CEO: 'We Will Get the 787 Back in Service'.)

Denver

United Airlines is still saying it plans to start daily non-stop Dreamliner flights between Denver and Tokyo starting March 31. With the launch of service less than two months away and the 787 grounding expected to be extended, it's increasingly likely United will have to make alternate plans.

How big is daily service to Tokyo for the Denver area? By one estimate, it would bring in $132 million in annual revenue and 1,500 new jobs.

Cities Impacted by 787 Grounding

Houston

United is planning to fly the Dreamliner on direct routes to Lagos, Nigeria and London, England. Two lucrative routes that were supposed to start flying in January but was postponed.

Dreamliner is key to midsize cities

Because the Dreamliner is smaller than other long-haul wide body planes like the 777 or 747, it is particularly well suited to connect midsize cities that may not be able to generate enough traffic to consistently fill a larger plane. It's the reason so many airlines are attracted to the Dreamliner. Opening new long-haul routes in new cities is one way airlines plan to grow revenue over the next 10-20 years.

(Read More: With 787s Grounded, ANA Wants Other Boeing Planes.)

That is still the plan and even since the Dreamliner grounding, cities planning to see the 787 take-off and land believe it will eventually pay off for them. The question is when that payoff will finally happen.

—By CNBC's Phil LeBeau; Follow him on Twitter @LeBeauCarNews

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