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All Nippon Says Grounded Dreamliners Have Cost $15 Million All Nippon Says Grounding Of 787s Has Cost $15 Million
(about 11 hours later)
TOKYO — All Nippon Airways, an enthusiastic Boeing customer now reeling from battery problems on its Dreamliner jets, said Thursday that the grounding of its 787 fleet hurt sales by ¥1.4 billion in January, casting a shadow on the airline’s future earnings. TOKYO — All Nippon Airways, an enthusiastic Boeing customer now reeling from battery problems on its Dreamliner jets, said on Thursday that the grounding of its 787 fleet hurt sales by about $15.4 million in January, casting a shadow on the airline’s future earnings.
With a fleet of 17 Dreamliners, delivered in late 2011 ahead of any other airline, All Nippon is the world’s largest operator of Boeing’s new jet. But that fleet remains grounded as U.S. and Japanese investigators try to figure out why a battery burst into flames and another spewed smoke last month on 787s operated by All Nippon and Japan Airlines. With a fleet of 17 Dreamliners, delivered in late 2011 ahead of any other airline, All Nippon is the world’s largest operator of Boeing’s new jet. But that fleet remains grounded as United States and Japanese investigators try to determine why a battery burst into flames and another spewed smoke last month on 787s operated by All Nippon and Japan Airlines.
All Nippon has scrambled to use replacement aircraft to keep routes operating. But the airline has been forced to cancel about 450 domestic and international flights, affecting almost 60,000 customers. The airline has said it expects disruptions to continue, and was unsure how long the disruption to its services would continue. All Nippon has scrambled to use replacement aircraft to operate its routes. But the airline has been forced to cancel about 450 domestic and international flights, affecting almost 60,000 customers.
The airline said Thursday that so far, the 787 grounding had caused an estimated $15.4 million in lost revenue, a disappointing reversal after the airline touted the big fuel savings brought about by the fuel-efficient jets. For now, All Nippon kept its profit forecast for the year through March unchanged at ¥40 billion, though it remains unclear how big an impact the Dreamliner woes will have on the airline’s future earnings and strategy. The airline has said it expects disruptions to continue and is unsure when they will end.
Seven operators grounded their 787 fleets on Jan. 16 after regulators around the world followed U.S. and Japanese regulators in ordering the suspension of all flights until the battery problems could be resolved. Earlier that day, a 787 operated by All Nippon was forced to make an emergency landing in western Japan after pilots spotted a battery error signal and a strange smell in the cabin. The airline said on Thursday that the 787 grounding had caused an estimated $15.4 million in lost revenue so far, a disappointing reversal after the airline trumpeted the big savings brought about by the fuel-efficient jets. For now, All Nippon kept its profit forecast for the year through March unchanged at about $44 million, though it remains unclear how big an effect the Dreamliner woes will have on the airline’s future earnings and strategy.
Just 10 days earlier, a similar battery burst into flames aboard a parked 787 operated by Japan Airlines at Boston’s Logan Airport. The charred remains of the lithium-ion batteries have been recovered from both planes, and are now being scrutinized by U.S. and Japanese investigators. Seven operators grounded their 787 fleets on Jan. 16 after regulators around the world followed those in the United States and Japan in ordering the suspension of all flights until the battery problems could be resolved. Earlier that day, a 787 operated by All Nippon made an emergency landing in western Japan after pilots noticed a battery error signal and a strange smell in the cabin.
All Nippon has since said that it replaced batteries and chargers in its Dreamliners a total of 10 times before the emergency landing, and Japan Airlines said it had done so several times. U.S. investigators are now asking for more data on the devices’ past performance. Just 10 days earlier, a similar battery burst into flames aboard a parked 787 operated by Japan Airlines at Boston’s Logan Airport. The lithium-ion batteries have been recovered from both planes and are now being scrutinized by American and Japanese investigators.
All Nippon has not asked Boeing for compensation linked to the grounded 787s, but will discuss the issue once the total financial impact is more clear, the executive vice president Kiyoshi Tonomoto was quoted by Reuters as saying. All Nippon has since said that it replaced batteries and chargers in its Dreamliners 10 times before the emergency landing, and Japan Airlines said it had done so several times.
According to Boeing, the two Japanese airlines account for about an eighth of the 848 orders the aircraft manufacturer has received for the Dreamliner so far. Japan Airlines, which owns seven of the jets, reports its earnings next week. United States investigators are now asking for more data on the devices’ past performance.
All Nippon has not asked Boeing for compensation linked to the grounded 787s but will discuss the issue once the total financial effect is more clear, said the executive vice president, Kiyoshi Tonomoto, according to Reuters.