Freight operator West Atlantic is overhauling its approach to deferred defects after a serious incident in which a Boeing 737-400 suffered substantial electrical failure and the loss or degradation of several systems.

UK investigators traced the failures to the incorrect racking of the right-hand engine's generator control unit, which shifted during flight resulting in the total disconnection of the electrical connectors.

"The aircraft was not designed to operate with the [control unit] disconnected and the crew were presented with an unusual situation that was not covered in the [quick-reference handbook]," says the Air Accidents Investigation Branch.

It states that the aircraft had departed Leipzig for Amsterdam with an inoperative left engine-driven generator – an acceptable deferred defect.

This meant the auxiliary power unit was instead used to drive the number 1 electrical system while the right engine-driven generator powered the number 2 system.

But when the aircraft arrived in Amsterdam, the first officer's instruments – which use the number 2 electrical system – intermittently blanked. The crew could not determine the reason but believed the right generator had failed.

Maintenance personnel reset a circuit-breaker and, after a successful right-hand engine run, the generator and the number 2 electrical system were considered to be functioning correctly.

The aircraft departed Amsterdam for East Midlands but, some 60nm from the destination, the first officer's flight instruments failed and the captain took manual control.

Numerous lights on both the overhead panel and annunciation panels illuminated and flashed, and multiple aural warnings were generated by the terrain-avoidance system. Although the aircraft controls, flaps and landing-gear functioned normally the crew had to cope with "distracting" visual and aural warnings throughout the approach, says the inquiry.

As the aircraft landed, several systems – including the autobrakes, half the exterior lights, and the captain's speed indications – failed. No electrical power was available to the cargo door, cargo bay and multiple items on the flight deck.

Examination of the aircraft at East Midlands found that the right-hand engine generator control unit had been incorrectly racked, allowing it to move forward. It was found to be protruding from the equipment shelf by just 3cm but this was sufficient for the contacts at the rear of the unit to disconnect from those on the shelf – a situation which would have resulted in the loss of several AC and DC electrical buses.

After the unit was re-racked the generator was tested and found to be functioning normally.

Neither of the two pilots, the only occupants of the jet (G-JMCR), was injured during the incident on 12 October last year.

West Atlantic has told the inquiry that the carrier will rethink its approach to maintenance, allocating each aircraft to a specific servicing base depending on the route flown.

Acceptable deferred defects will be monitored daily with the intention of rectifying them within 48h, and internal investigations will probe the reasons for failing to meet this time limit. The airline will also carry out risk assessment – with engineer and crew consultation – prior to deferral of a defect, based on the type of fault and the possible operational impact.