Dreamliner Flying Again in US After Lengthy Grounding
After 123 days being grounded and then repaired to ensure its battery systems do not catch fire, Boeing 787 Dreamliners are about to once again make commercial flight in the United States.
A United Airlines 787 will fly from Houston to Chicago Monday morning carrying more than 250 passengers, including the CEO's of United and Boeing.
"Jim McNerney [Boeing Chief Executive Officer] and I are flying today from Houston to Chicago on flight number one, which is putting the airplane back in service," CEO Jeff Smisek told CNBC Monday.
Smisek add that he is confident the aircraft is safe. "Boeing and the FAA have worked together very closely to make this an absolutely safe aircraft, and they have solved all the issues with the battery—not only with containment, venting and everything else."
Given the massive amount of negative publicity, including video of one Dreamliner with smoke drifting out of it in January, there are many wondering if people will be afraid to fly the plane.
"There may be some who are concerned about flying on the 787, but I think they are far and few in between," said Henry Harteveldt, airline analyst with Hudson Crossing. "It is a great airplane. It has a lot of passenger pleasing features so there are a lot of people who will be looking for it."
The United 787 has a new battery system that includes greater space between battery cells to prevent them from catching fire. If the re-designed battery does catch on fire, it is now encased in steel box to prevent the fire from spreading. There is also ventilation leading from the steel box to outside the Dreamliner so any smoke from a fire goes outside the 787 and not into the cabin.
Jim McNerney, Boeing Chief Executive Officer, told CNBC Monday that the battery system so far has been "squawk free," and that Boeing has had "normal teething problems that are consistent with new airplanes."
McNerney added Monday's flight means a return to service of the fleet. "We now got 45 of the 50 planes in the fleet retrofitted with the new battery system. United will be the fifth airline to re-enter service...I'm excited to be on the airplane, just like anybody else."
United's Costly 787 Wait
For United Airlines, the FAA grounding the 787 on January 17th created a costly headache for the airline. The airline had six Dreamliners it immediately pulled from its schedule.
The impact included the airline taking an $11 million charge in the first quarter due to lost revenue. Instead of flying the 787 on flights between Shanghai and Los Angeles, the carrier had to fly more costly 777 planes. United also had to postpone start of service between Denver and Tokyo.
But more than that, the 787 grounding erased any marketing edge United had over other U.S. carriers who will not fly the Dreamliner for years. For months leading up to taking delivery of its first 787 late last year United ran promotional videos at the start if every flight touting the Dreamliner as a plane that would transform the flying experience.
In every one of those videos CEO Jeff Smisek talked about how he couldn't wait for United customers to enjoy flying in a 787. After the grounding, Smisek was left answering reporter and analyst questions about whether he still had confidence in the plane. To his credit, Smisek never changed his tune.
(Read More: Boeing CEO Sees Little Dreamliner Fallout)
We'll never know how much of a true game changer a problem free launch of the 787 would have been for United in terms of marketing appeal. Given the grounding and negative publicity, it won't be surprising if the airline shelves any marketing plans it once had to play up the fact it is flying the 787 long before other U.S. carriers.
Boeing Ramps Up 787 Production
While Boeing CEO Jim McNerney is flying on the first United commercial flight since the FAA lifted the 787 grounding, his company is quickly ramping up production of the plane.
Between the company's two final assembly plants in Everett, Washington and Charleston, South Carolina Boeing is now building seven Dreamliners a month. Officially, the company said it will deliver at least sixty 787 planes this year, but many analysts on Wall Street are now discussing the possibility of Boeing exceeding that number.
While there were teams of Boeing engineers working on a fix for the 787 between mid-January and late April the company never stopped building Dreamliners. As they rolled off the line, Boeing parked them on the tarmac and waited for the official fix to be approved so they could retro fit those 787s with the new battery system.
The increased production, along with the bull market, has driven investors to once again fall in love with shares of the Dow component. The stock is up more than 35 percent since the darkest days right after the grounding when some wondered how damaging the battery investigation would be for the plane maker. What's more, for the first time since 2007, BA shares are poised to fly north of $100.
Is the 787 Still a Draw?
When United made its first commercial Dreamliner flight, the plane was filled with United executives, journalists and numerous aviation geeks who made it a point to be on the first 787 flight. It was a festive atmosphere with many of those paying passengers talking about how long they had waited for the chance to fly the new plane.
Will that same enthusiasm surround the Dreamliner as more of them enter service?
(Read More: How Boeing Came Back From the Brink)
Harteveldt thinks so. "For frequent travelers I think they are actually looking forward to the Dreamliner returning," he said.
As for whether the problems of the past will scare some passengers into taking a different plane, Harteveldt and others believe that is unlikely to happen.
"I don't think that people would be afraid of it," said Harteveldt.