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Boeing's Dreamliner nightmare: PR fail or tech mess?

Friday, 15 Nov 2013 | 8:42 AM ET
An engineer works on a Boeing Co. 787 Dreamliner aircraft
Tomohiro Ohsumi | Bloomberg | Getty Images
An engineer works on a Boeing Co. 787 Dreamliner aircraft

In terms of unwanted news stories, 2013 has been the Boeing 787 Dreamliner's "annus horribilis."

Since its introduction two years ago, the Dreamliner has hardly been out of the headlines. By far the biggest mediastorm was in January, when Boeing's entire 787 fleet was grounded following a series of overheating batteries. It wasn't until the April, by which time Boeing had spent millions on fixing the problem that regulators allowed the company to continue selling and flying the aircraft.

On top of this Japan Airlines (JAL) said one of its Dreamliners flying from Helsinki to Tokyo experienced issues with the same type of problematic battery. JAL reported that "while the battery did not overheat or emit smoke, the cockpit indicator showed trouble with the supply's connection to the plane's auxiliary power unit during the flight."

There have been other problems: in July, there was a fire on board an Ethiopian Airways Dreamliner; while in October, a body panel fell off an Air India Dreamliner, with the causes behind this accident still under investigation.

(Read more: Tracking Dreamliners' every move inside the 787 ops center)

Not that any of this has damped Boeing's belief in its aircraft, with the company raising production plans for the Dreamliner. Having delivered 96 aircraft so far, Boeing hopes to increase the number of 787s it will deliver by 2016 and 2020.

In a statement to CNBC via email, Boeing said, "Boeing is committed to improving the 787's in-service dispatch reliability and are applying the resources required to achieve the results that we and our customers expect. We are constantly engaged with our customers – partnering with them to prevent issues and helping them resolve them in the event they do occur."

But some industry analysts warn that Boeing has not put its problems with the Dreamliner behind it and further challenges lie ahead.

When the Boeing 787 Dreamliner was first unveiled, it was heralded as a daring project with huge profit potential. It took almost a decade of development, billions of dollars in overruns and was delayed for three years, so the narrative has never been easy for the aircraft.

Aviation analyst David Zara told CNBC that all of greatest aircraft experience early problems, which is not surprising given the huge complexity of aircraft manufacturing. "I think that every aircraft, whether its Boeing or Airbus, has teething problems," Zara said in an interview. "The Dreamliner is a fantastic machine, but frankly, expecting an aircraft that is revolutionary in its scope to not have teething problems is madness, or just not realistic.

"All great aircraft have had teething problems and all have gone on to have successful lives, and some of them are still in production."

(Read More: Boeing, Airbus opt for steadier approach to deliveries)

While Zara argues that a new "revolutionary" aircraft was bound to hit some snags in its early days, there is still perhaps cause for concern for Boeing when it comes to its rivalry with EADS, manufacturer of Airbus.

"Boeing has a 'solution' to the 787 battery issue, though the exact causation is still uncertain, while other issues have been unrelated," said Professor Keith Hayward, head of research at the Royal Aeronautical Society.

"But these, combined with the delay in development, has given Airbus big opportunity to recover."

But Thomas Saquer, an industry analyst at Frost & Sullivan, argued that the battery problem was not over. "The cause of the battery failures were not precisely identified however a permanent fix with a multiple layers of protection was developed to ensure a maximum level of security," he said.

"I think it might take longer to solve."

(Read more: Despite fire, airlines flying Boeing's Dreamliner)

Talking to India's Business Standard following the Air India Dreamliner difficulties, Dinesh Keskar, Boeing's senior vice-president (sales, Asia-Pacific and India), admitted that the company was not happy with the Dreamliner's performance, although he emphasized the aircraft's 100 percent safety.

"We are going to focus all our energy to make things right," Keskar told Business Standard. "We have a team in place here which monitors the operations and we are in touch with them. We develop plans together as to how we are going to fix it and I think we are already in that mode.

"Today, worldwide we are at 97 percent reliability. We are not pleased with that, we will improve that and we will put resource to do that and Air India is no exception."

It does appear that the Dreamliner's difficulties have made for great headlines, but have not damped either Boeing or its customers' spirits. Take the furore over Norwegian Air's Dreamliner, which had to be pulled out of service in September, meaning the firm had to briefly lease an Airbus jet.

The Dreamliner was pulled by Norwegian Air Shuttle after a series of breakdowns and the company demanded that Boeing repair the plane. Once the repairs had been made, the CEO of the company, Bjorn Kjos, told Reuters: "I think the Dreamliner is going to be a fantastic aircraft...We know from the one that has flown very well so far, that it is performing fantastic."

Boeing also has the announcement soon of a new variant to the 777, the 777X, which Hayward argues will help cause worry for Airbus and ease Boeing away from too much focus on Dreamliner issues. "This will only add to Airbus A380 woes," Hayward said, referencing Airbus' largest aircraft model. "The A380 market and returns were always rather soft and increased competition from the 777 could really hurt."

(Read more: Airbus highlights challenge with Dreamliner rival)

Can Boeing learn from its mistakes with the Dreamliner? Saquer said that when he was an engineer there was always a struggle to try and meet the delivery targets expected, often because they were unrealistic. "Consistent rates are hard and it takes a bit of a time because it is such a buoyant market and sometimes it's more challenging than they expect," he said, adding,

"Especially when they don't know what's going to happen with the technology. They're going to launch the 777X now and deliver the first one in seven years, so I guess they learned the lesson. It's very important to deliver aircraft on time."

Saquer also said that the Dreamliner had been a good testing ground for the 777X. "I think the 787 was a good laboratory for the new technology and they can improve it because the life time of an aircraft is very long, so you can always constantly update it."

A Boeing spokesman told CNBC, "We integrate lessons learned in previous rate increases and fold those into a calculated and well-managed effort that is implemented over a period of time. We work closely with our supplier partners to ensure that parts, systems and people are in place to allow us to make the change in an orderly fashion."

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