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Boeing Says Air India Taking 787s, Watching Engine Probe

August 04, 2012

Boeing Says Air India Taking 787 Amid Engine-Probe Concern

An Air India Ltd. Boeing Co. 787 Dreamliner is displayed at the India Aviation 2012 conference at Begumpet Airport in Hyderabad, India. Photographer: Dhiraj Singh/Bloomberg

Boeing Co. (BA:US) said state-owned Air India Ltd. will start preparing next week to take its first 787 Dreamliners, which are almost four years late, after the jets won government approval amid the probe of an engine failure.

“They want to know what the issue is, just like anybody would,” Boeing India President Dinesh Keskar said in an interview. “We’ve worked with them for 60 years, and they know we’re not going to give them something that’s not right. But they certainly want to know what’s going on and told us to let them know by Monday if we have any insight.”

Keskar said executives at Air India called him yesterday from India after a Cabinet committee authorized a compensation agreement between Boeing and the airline for delivery delays. The executives stayed up all night to prepare for the session, he said. K. Swaminathan, a spokesman at Mumbai-based Air India, didn’t immediately respond to two calls each to his mobile phone and work phone today.

Three 787s await Air India at Boeing’s factory in North Charleston, South Carolina -- the first one built there and two others from its main plant in Everett, Washington. Air India eventually is due to get the second South Carolina-made 787, the one with the General Electric Co. (GE:US) engine that failed before a test flight last weekend.

“On Monday they’ll start putting logistics in place to come to Charleston,” Keskar said. “We need to get a delivery team here that will go check out all the systems, fly the plane, do all the things they need to do. That takes three or four days.”

787 Compensation

The engine involved in the July 28 incident has been removed from that Dreamliner and sent to a GE factory in Cincinnati as engineers study what went wrong. GE, Boeing and the U.S. National Transportation Safety Board are investigating.

India’s government accepted Boeing’s compensation offer for delays on the 787, which was originally due to start reaching the airline in September 2008. Air India had asked for $840 million after Chicago-based Boeing’s struggles to adopt new materials and production techniques for the first jetliner made chiefly from composite materials.

Keskar, in an interview from his office near Boeing’s commercial headquarters in Seattle, declined to discuss the compensation.

Charleston to Delhi

The most recent delivery plan had been for June. Boeing has trained 64 Air India pilots in the past three months to fly the 787, Keskar said. The carrier plans to fly the first plane non- stop from Charleston to New Delhi, he said.

A delivery this month may make Air India the third carrier to fly the 787. The jet entered service in late 2011 with All Nippon Airways Co. (9202) Japan Airlines Co. received its first 787 in March, and United Continental Holdings Inc. (UAL:US) plans to pick up its first in late September.

Air India said in a statement yesterday that it’s going to seek further compensation later for failure to meet performance guarantees. Boeing shares dropped 3.6 percent last week to $72.81 in U.S. trading.

Keskar, who has worked with Air India on Boeing’s behalf since 1987, sold the carrier 27 Dreamliners in 2005, two years before the first model rolled out of the factory. Since then, the planemaker has struggled with the plane’s weight, which affects fuel consumption, and GE has devised performance packages to improve the engines’ efficiency starting next year.

“We’ll have that discussion after a reasonable number of airplanes is delivered so we have the data” on performance, Keskar said.

To contact the reporter on this story: Susanna Ray in Seattle at sray7@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net


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