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SEATTLE (Reuters) - Boeing Co's (BA.N) 787 Dreamliner is carrying passengers again after a three-month ban on flights, but the company still faces potent risks related to the new, high-tech plane.
U.S. regulators formally lifted flight restrictions last week after Boeing redesigned the lithium-ion battery system that overheated on two 787s in January, clearing the company to install the fix on the 50 jets delivered so far.
Ethiopian Airlines resumed passenger flights on Saturday, and other carriers, including Japan Airlines (9201.T), All Nippon Airways (9202.T) and United Airlines (UAL.N), plan to resume service in May and June.
Though Boeing will not say what the crisis has cost, the Chicago-based aerospace and defense giant absorbed nearly all of it in the first quarter while posting a 20 percent profit gain.
Wall Street is broadly positive on the stock, which rose 18 percent during the 787 grounding amid optimism over Boeing's ability to deliver on a backlog of plane orders.
Still, as the $207 million Dreamliner returns to service, aviation experts say Boeing remains vulnerable to ongoing regulatory inquiries that could reveal more information on the battery failures or make it harder to certify future airplanes.
"The airline community believes this is a ghastly time for Boeing and the 787, and only time will tell whether the fix will do the job," said Tim Clark, the CEO of Emirates airline, one of Boeing's biggest customers, though not a 787-buyer.
A National Transportation Safety Board investigation, for example, could reveal a cause for the two battery meltdowns many months from now, putting Boeing's fix and its analysis of the problem under renewed scrutiny, according to people familiar with the investigation.
The NTSB also is likely to recommend changes in regulatory procedures after the review. While not binding, the NTSB suggestions could raise the bar for aircraft designs that Boeing and rival Airbus are now developing. EADS' EAD.PA Airbus already has dropped lithium-ion batteries from its forthcoming A350 plane on fears that regulators could delay its entry into service next year.
At the same time, the U.S. Federal Aviation Administration is conducting a separate review of the design, manufacturing and production of the 787, which is the first commercial jetliner to extensively use both lightweight carbon composite construction and powerful electrical systems with lithium-ion batteries.
Launched after a string of smaller mishaps culminated in the battery fire on January 7, this sort of FAA review normally would be dealt with quietly, said Hans Weber, an aviation consultant at TECOP International, who been an adviser to the FAA for 20 years.
Now that the battery has drawn attention, however, "everybody is holding their breath," Weber said. "If anything happens, it will be publicized and the response will be a lot of resources will be focusing on the 787."
Boeing declined to comment on the reviews, other than to say it is cooperating with regulators. The FAA has declined to give details, but expects to release an update in the summer.
Lawmakers who oversee aviation are trying to schedule hearings on what Boeing and the FAA learned in the 787 crisis, possibly as early as May, according to aides. Such hearings likely would revive scrutiny of the plane.
"I would not be surprised to see a hearing about the 787 in the House," said Bryan Thomas, a staffer for Rep. Rick Larsen, the Washington Democrat who has Boeing's main 787 factory in his district.
Since July, the 250-seat Dreamliner had suffered a string of so-called "teething problems," from engine corrosion to fuel leaks, a computer glitch that indicated faulty brakes, short circuits in electrical panels, and an oil leak. As the incidents mounted they drew more attention, and in January even a cracked cockpit window drew notice.
The 787's travails hit front pages when two lithium-ion batteries overheated in January, leaking fumes into cabins and prompting regulators to ground the fleet worldwide.
Without knowing the cause of the meltdowns, Boeing altered the 787's battery to make it less prone to heat buildup. It also redesigned the charger, and added a stainless-steel box capable of containing an explosion and venting fumes outside the jet. Boeing said these fixes would prevent fire or smoke from ever entering the cabin or compromising the plane.
Under questioning last week, the company said it would more rigorously challenge its test assumptions in the future, and that its analysis of the problem could change as more facts become known.
"If we get to the point of understanding specifically what the cause was, then we'd be in a better position to understand those assumptions," Boeing's chief 787 engineer, Mike Sinnett, said at the NTSB hearing on April 23.
Boeing used the grounding period to carry out lab and flight tests aimed at raising the reliability of other components, including the electrical panels, to address the teething problems. Unlike the battery fix, airlines are not required to make those changes.
The NTSB hearings also provided clues to the safety board's potential recommendations. Questions from NTSB Chairman Deborah Hersman revealed that the FAA had 25 full-time people supervising the 787 program, compared with about 900 at Boeing, many of whom are authorized to sign approvals on the FAA's behalf. The ratio could prompt the NTSB to recommend more oversight, possibly complicating future approvals.
"Even more care will be taken the next time something relatively unknown is introduced into the system," said George Hamlin, an aerospace consultant, referring to the lithium-ion batteries that overheated.
"We don't know what caused it," he added. "Therefore, we don't know if it could recur."
Additional reporting by Praveen Menon in Dubai; Editing by Tiffany Wu and Leslie Gevirtz