Already a Bloomberg.com user?
Sign in with the same account.
United Continental Holdings Inc
Japan Airlines Co Ltd
ANA Holdings Inc
The last time the Federal Aviation Administration grounded a commercial airline fleet was in June 1979: the DC-10 jumbo jet built by McDonnell Douglas. On Wednesday, the FAA ordered the grounding of U.S.-registered Boeing (BA) 787s, which affects six planes flown by United Airlines (UAL). (Other countries have also grounded the planes.) There are few similarities between the two actions:
The human toll. The DC-10 grounding came after a couple of horrific accidents. A Turkish Airlines DC-10 crashed over Paris in 1974 after a cargo door blew off, killing 346 people. It was the second such incident with the door, and engineers had warned of the problem, yet no action was taken. Then, in May 1979, a DC-10 flown by American Airlines crashed during takeoff in Chicago, the result of improper engine-maintenance procedures. That crash killed 293 people. A month later the FAA grounded the DC-10, citing the American crash.
Boeing’s 787, on the other hand, has not suffered a crash. On Dec. 4, a United Airlines 787 made an emergency landing in New Orleans; on Jan. 7, a Japan Airlines (9201) 787 battery burned in Boston after a flight from Tokyo; and on Jan. 16, an All Nippon Airways (9202) 787 made an emergency landing in southern Japan. No one was seriously injured in any of those incidents.
The technology. The 787 is a technical marvel, built primarily of lighter carbon-fiber composites that are molded and baked in single pieces—not aluminum that’s riveted together, as on the DC-10. The 787’s lithium-ion batteries also generate far more electrical power than any prior airplane, which is used to power more of the plane’s system. Combining the plane’s airframe and battery power, the 787 burns 20 percent less jet fuel than previous long-haul airplanes.
The economics. The 787 is a response to the global airline industry’s dramatically altered economics. In 1971, when the DC-10 was new, U.S. airfares were regulated by the government and the price of jet fuel was not the primary focus of the industry, as it is today. The twin-engine 787 was designed to deliver airplanes a new tool in their management arsenal, a financial “game changer,” in the words of Jeff Smisek, chief executive officer of United, the first U.S. carrier to fly the plane.
On Jan. 11 the U.S. Department of Transportation and Boeing announced a comprehensive review of the 787 program to answer questions about the safety of the plane’s high-voltage lithium-ion batteries. Currently, no airline has canceled a 787 order citing the battery issue. On the DC-10, after the cargo door was redesigned and changes were made to engine-maintenance procedures, the jet overcame its troubles and remains flying around the world, mainly as a freight aircraft, including with FedEx (FDX). The final DC-10 was delivered in 1989, with nearly 450 of the planes manufactured.