FAA decision on Boeing 787 battery fix expected Monday

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The Boeing 787 could be flying again by May or June, but perhaps not soon enough to support an expected 787-10X launch at the Paris airshow, a Wall Street analyst says today in a research note.

Cowen analyst Cai von Rumohr says he expects the US Federal Aviation Administration to respond to Boeing's proposed solution to the 787 battery problem by early next week.

Such a 10-day turn-around, which is unconfirmed by Boeing and the FAA, may allow 787 commercial flights to resume by mid-year, von Rumohr says.

On the other hand, the FAA may reject Boeing's proposal to halt prevent battery-related fires onboard the 787 by strengthening the containment around the battery cells, adding monitors and improved ventilation.

But von Rumohr thinks a negative response by the FAA to Boeing's plan is unlikely because the agency, unlike the National Transportation Safety Board (NTSB), is charged with encouraging the aviation industry along with improving safety.

He also cites the TWA flight 800 Boeing 747 crash in 1996 as an example when the FAA lifted a grounding order before a root cause was discovered because a fix was available to reduce risk to a "negligible level".

The flight 800 incident was traced four years later to an explosion sparked by fuel vapours and an electrical fault.

No 787s have crashed due to an electrical problem, but the fleet has been grounded since 16 January due to two incidents in which the lithium-ion batteries onboard overheated and one case ignited a fire.

Boeing has continued building 787s at a rate of five per month, with an escalation planned to 10 per month by the end of the year. Von Rumohr says he expects the battery issue to have no impact on the 787 product rate and only a small reduction on the number of deliveries in 2013.

More seriously, the lingering concerns about the battery problem could slow demand by airlines for the 787-10X launch expected at Paris in June. That delay of the more profitable variant of the aircraft could trim net income slightly for Boeing in 2014 and 2015, Von Rumohr says.