UPDATE: FAA Temporarily Grounds Boeing (BA) 787s; Shares Fall

January 16, 2013 6:14 PM EST Send to a Friend
(Updated - January 16, 2013 6:17 PM EST)

The Boeing Company (NYSE: BA) is down 2% after-hours after the U.S. FAA ordered a temporarily cease in operations of Boeing 787.

The news following recent reports of battery issues.

Below is the Statement from the FAA:

FAA Statement:

As a result of an in-flight, Boeing 787 battery incident earlier today in Japan, the FAA will issue an emergency airworthiness directive (AD) to address a potential battery fire risk in the 787 and require operators to temporarily cease operations. Before further flight, operators of U.S.-registered, Boeing 787 aircraft must demonstrate to the Federal Aviation Administration (FAA) that the batteries are safe and in compliance.

The FAA will work with the manufacturer and carriers to develop a corrective action plan to allow the U.S. 787 fleet to resume operations as quickly and safely as possible.

The in-flight Japanese battery incident followed an earlier 787 battery incident that occurred on the ground in Boston on January 7, 2013. The AD is prompted by this second incident involving a lithium ion battery. The battery failures resulted in release of flammable electrolytes, heat damage, and smoke on two Model 787 airplanes. The root cause of these failures is currently under investigation. These conditions, if not corrected, could result in damage to critical systems and structures, and the potential for fire in the electrical compartment.

Last Friday, the FAA announced a comprehensive review of the 787’s critical systems with the possibility of further action pending new data and information. In addition to the continuing review of the aircraft’s design, manufacture and assembly, the agency also will validate that 787 batteries and the battery system on the aircraft are in compliance with the special condition the agency issued as part of the aircraft’s certification.

United Airlines (NYSE: UAL) is currently the only U.S. airline operating the 787, with six airplanes in service. When the FAA issues an airworthiness directive, it also alerts the international aviation community to the action so other civil aviation authorities can take parallel action to cover the fleets operating in their own countries.


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