United paying price for being among first to get 787 Dreamliner
By David Roeder Business Reporter January 19, 2013 1:12AM
A United Airlines 787 Dreamliner arrives at O'Hare international Airport in Chicago, Sunday, Nov. 4, 2012, from Houston, after making United's inaugural 787 revenue flight. The aircraft is touted to be much more fuel efficient than any other similar plane and has a host of passenger amenities, such as larger windows, special lighting and filtered air. (AP Photo/Nam Y. Huh)
Updated: February 21, 2013 6:45AM
You couldn’t blame United Airlines if it confessed to a giant case of buyer’s remorse.
Among domestic airlines, Chicago-based United was first out of the gate with its support of the Boeing 787 Dreamliner. It took delivery of six of the technologically advanced jets last year, well ahead of other U.S. carriers.
All six now are ensnared in the Federal Aviation Administration’s grounding of the Dreamliner after repeated problems. Most involve the model’s supercharged, lighter-weight lithium ion battery and its propensity to overheat and catch fire.
Fifty Dreamliners have been delivered to carriers worldwide, and nearly all have been deemed temporarily too dangerous to fly while the battery problem is being examined. Aviation authorities overseas or airlines themselves have grounded the planes, as the FAA’s order directly applied only to United’s aircraft.
United, part of United Continental Holdings Inc., thus bears a burden along with other quick customers of the 787, such as All Nippon Airways, Japan Airlines and Qatar Airways. They were early adopters of new technology, and are paying a price for their eagerness.
Aviation experts, however, said the cost shouldn’t be large. For one thing, the airlines will be in line for compensation from Boeing Co., depending on terms of their contract with the manufacturer.
At least one airline leader has declared he will demand money from Boeing. News outlets last month quoted Qatar Airways Chief Executive Officer Akbar Al Baker commenting acidly, “Definitely we will demand compensation. We are not buying airplanes from them to put in a museum.”
United hasn’t been so blunt. Spokeswoman Mary Ryan declined to comment on compensation, saying only that the airline is working closely with Boeing and the FAA and that its order book is unchanged.
The airline is due to receive 50 Dreamliners by 2019.
Just as with any new design of a complex device, such as cars or computers, being among the first buyers involves risk, said aerospace engineer Willem Anemaat, president of DARcorporation.
“It’s a brand new airplane and they always have issues,” he said. For that reason, the first customers get a good price, as the airplane maker sees value in getting the model into service.
“They get good discounts. They know they’re being used to work out the kinks,” Anemaat said.
American Airlines, which is reorganizing under bankruptcy protection, has 42 “firm” orders for the Dreamliner and an option for 58 more, said spokeswoman Mary Frances Fagan. She said the first planes are due in November 2014.
Delta Air Lines conspicuously has stayed away from the Dreamliner rush. It has orders for 18 planes but with no delivery until 2020, a spokesman said.
American and Delta said they haven’t changed their orders as a result of the model’s trouble. The Dreamliner carries a list price of $207 million each, but the airlines negotiate lower prices.
United operates around 700 planes, so having six out of service isn’t a burden. But the financial impact will get worse if the Dreamliner is grounded for a long period, more so for overseas airlines that rely on it for a greater share of its flights.
Boeing’s next-generation design is for long-haul flights and promises a 20 percent increase in fuel efficiency, so some carriers relied on it to expand into new markets. More than three years of delays in production forced those airlines to regroup, so some were irritated with Boeing by the time the Dreamliner showed up.
LOT Polish Airlines was the first European carrier to get a Dreamliner, and now one sits grounded at O’Hare Airport. The Polish state-controlled carrier is going back to its older fleet of Boeing 767s to bridge the gap.
A LOT spokesman said that the airline is considering seeking compensation from Boeing for the grounding of its two Dreamliners.
Getting the new model was central to the carrier’s plan to stay competitive, said LOT regional sales director Frank Joost.
“Passengers start thinking about switching to other airlines because there’s a difference whether you fly on an airplane that was put into service in the beginning of the ’90s or something that’s brand new,” Joost said in an interview before the groundings.
Contributing: Lori Rackl