The commercial aerospace behemoth
The Boeing Company
) finally received the green light from the U.S. Federal Aviation
Administration (FAA) for the 787 Dreamliner's redesigned battery.
This marks an important step toward getting the grounded jetliner
back in the skies.
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Following a broad review of certification tests, Boeing's new
improved 787 battery system was approved by the FAA. The approval
enables Boeing to install lithium ion batteries on 787 jets that
include added protection around the cells to control overheating,
a steel case to prevent any fire from diffusion as well as a tube
that vents fumes outside the aircraft.
The company has already initiated the modification work and FAA
will likely issue a directive soon, lifting the three-month ban
once the fixing is complete. Boeing's teams around the world are
prepared to install the new lithium-ion battery systems and the
operation will take around five days once it starts. The FAA's
approval is only applicable to U.S. airlines. However, other
international regulators also follow the agency's direction.
All Nippon Airways ("ANA") − Boeing's largest 787 customer − has
started installing the batteries into 5 of its 17 Dreamliner
planes and intends to carry 100 to 200 test flights in May with
this latest battery system before taking passengers again. After
ANA, the biggest 787 operator, Japan Airlines Co., also began
replacement procedures. Japan Airlines and ANA, the two big
airlines in Japan, still need approval from Japanese regulators
before the re-commencement of their flights.
The only U.S. operator of the 787,
United Continental Holdings Inc.
), plans to continue service between Houston and Denver by May
31, and commence Dreamliner service between Denver and Tokyo by
Two battery overheating incidents in Jan 2013 compelled all 50
Boeing 787 airplanes to be grounded. The 787 Dreamliner is the
first passenger jetliner manufactured mostly of lightweight and
environmentally friendly composite material.
The grounding of the 787 Dreamliner has cost Boeing an estimated
$600 million. Despite the interruption in deliveries that started
in January, Boeing aims to finish all planned 2013 deliveries by
the end of the year. Further, the company expects no adverse
impact on its assumptions for the year from the 787 battery
Boeing currently retains a Zacks Rank #3 (Hold). Other stocks in
the sector are
Wesco Aircraft Holdings, Inc.
Triumph Group, Inc.
), both with a Zacks Rank #2 (Buy).