May 1, 2013 / 1:23 PM / 6 years ago

Qatar Air says to get 787 grounding compensation

DUBAI (Reuters) - Qatar Airways said it would receive compensation from Boeing (BA.N) for the grounding of its 787 Dreamliners, as it returned the aircraft to service for the first time in three months.

The Boeing logo is seen at their headquarters in Chicago, April 24, 2013. REUTERS/Jim Young

“We will get compensation because we took airplanes we couldn’t fly. Boeing understands that,” Chief Executive Akbar Al Baker said before boarding the first flight from Dubai to Qatar’s capital Doha, accompanied by reporters.

Al Baker criticized the decision by regulators to ground the 787 in January, a move which he described as an over-reaction to worldwide social media coverage generated by two battery incidents, as well as images of a Japanese 787 being evacuated.

“I still feel the aircraft should not have been grounded,” Al Baker said. “I think there was reaction due to the unnecessary evacuation of a Japanese aircraft. People are too sensitive to what the social media says,” Al Baker said.

Investigators say they do not yet know what caused two lithium-ion batteries to melt down. The Federal Aviation Administration last week approved a revised battery system designed to prevent the batteries overheating and contain any flammable materials inside a reinforced container.

“The grounding of the 787 has really impacted Qatar’s expansion severely. This is impacting my bottom line,” Al Baker said, adding, “We were planning 15 new routes and now we have to settle for 10.”

All five 787 Dreamliners delivered to Qatar Airways before the grounding should be in service with modified batteries before the end of the month, the airline said.

ANA Holdings (9202.T) and Japan Airlines (9201.T), whose aircraft suffered the original battery problems that led to the grounding, said on Tuesday that the crisis would cost them a combined $110 million of operating profit, an expense they may ask Boeing to shoulder.

Qatar Airways is among airlines already expected to receive compensation for a three-year delay in the development of the 787, caused by a series of production snags.

Al Baker said this could lead to fresh plane orders or leasing contracts to help plug the gap.

“We are short of airplanes. So we will look at ... either purchase or lease of interim airplanes from Airbus EAD.PA or Boeing. We have not yet decided.”

The remarks appear to indicate potential interest in the Airbus A330, which Qatar already operates.

Delays on the 787 have led to an increase of sales of the Airbus A330, an older aircraft that the Dreamliner was partially designed to replace. Boeing plans to bring out a new stretched 787 that it believes will put a halt to the A330’s revival.

Turning to separate plans by Boeing to update its most popular long-haul aircraft, the 777, Al Baker said Qatar Airways would be “very interested” in two versions presented to airlines when the project, dubbed “777X,” was officially launched.

Reporting by Praveen Menon, Editing by Tim Hepher

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