U.S. Markets closed

Another Wrong Turn for Boeing's 787 Dreamliner

Rick Newman

A fire on an airplane is scary enough. But if you build airplanes, what's even more unnerving is a government investigation into the problem.

That's the situation Boeing now faces with its new 787 Dreamliner, a wide-body jet roughly the size of a 767, with the longer range of a 747 jumbo jet. The Dreamliner was initially famous for technological breakthroughs such as a composite skin, lighter than the usual aluminum, and many electronic controls in place of traditional mechanical ones. That makes it cheaper to operate over profitable long-distance routes, helping Boeing rack up about 850 orders for the plane so far. But after three years of delays, the 787 is now at risk of becoming known as a troubled jet with an alarming record of mishaps that could dent its reliability and perhaps even compromise safety.

[ENJOY: Political Cartoons About the Economy]

A rash of recent problems with the 787, which first went into service in 2011, includes a cracked windshield on one flight, an oil leak on another flight, and two sizeable fuel leaks that occurred on the tarmac at different airports. For the most part, safety experts say those types of problems are typical of a new jet, especially one like the 787 that's technologically advanced and requires a few years of service to work out the kinks.

But government officials are more concerned about a fire that erupted in early January on an empty Japan Airlines 787 parked at Logan airport in Boston, involving a type of lithium-ion battery that's new to airliners. Lithium-ion batteries--used to power cell phones, laptops and even the Chevrolet Volt plug-in hybrid sedan--are appealing because they generate more energy than other types of batteries. But they can also get very hot, which makes them more prone to fire. Boeing uses lithium-ion battery packs to crank up the auxiliary power units on the 787, which provides power to the plane when the engines are off. It was apparently one of those battery packs that ignited in Boston, sparking a blaze that took fire crews 40 minutes to extinguish.

[NEWMAN: The 10 Worst Industries for 2013]

Boeing engineered many safety features into the 787 to prevent those battery packs from catching fire, and to contain a fire if there is one. Yet something obviously went wrong. So the Federal Aviation Administration, which must certify new planes as safe to fly, is now conducting an unusual "comprehensive review" of the 787 to make sure it meets all safety standards, a development that sent Boeing's stock down about 2.5 percent the day the government announced it. Boeing has staunchly defended the plane's safety and says it is cooperating with the FAA probe.

There are three possible outcomes, says analyst Richard Tortoriello of Standard & Poor's. The most draconian result would be for the FAA to order a major design change in the 787, which could require costly and significant modifications to the 50 or so jets already in service and a major revamping of the whole program. Since the FAA oversaw the development of the entire jet--including development of the lithium-ion battery packs--Tortoriello sees this outcome as "very unlikely."

[RELATED: Get Ready for the Next Fiscal Cliff]

The FAA could also order a minor design change that could be retrofitted onto jets already in service, with no major disruption to the 787 program. Or it could find that the Boston fire was an anomaly that doesn't require any design changes, essentially giving the 787 a clean bill of health. Either of those outcomes "would be a positive for Boeing," says Tortoriello. "It would put the safety issues behind it. I'm cautiously optimistic."

Aviation experts point out that other planes now considered highly reliable endured worrisome incidents early in their service life. One of the most notable was the in-flight explosion of an engine on a Qantas Airways Airbus A380 in 2010, which led to the temporary grounding of all A380s equipped with the same engine. After inspections, modifications and some engine replacements, those planes resumed flying.

High-profile new jets also tend to draw more scrutiny for routine issues, which makes them seem riskier than they are. "Some of these problems happen all the time with other airplanes and we never hear about them," says Seth Kaplan of Airline Weekly. "It's way too early to say that the 787 is not a reliable aircraft."

There's no sign that any of the airlines with 787s in their fleets--which include United and several foreign carriers--have pulled the planes from service or expressed unusual concern about the problems. Of course, it would be self-defeating if airlines flying the 787 complained publicly about it, scaring passengers off their own planes. For those carriers, a government vote of confidence in the 787 can't come quick enough.

Rick Newman is the author of Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.

More From US News & World Report