Tag Archives: Boeing Co

Airbus Poaches Boeing Customer; Boeing CEO Gets 20% Pay Boost

By 24/7 Wall St.

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Just when it seemed that Boeing Co. (NYSE: BA) had reached an agreement on how to fix the battery problems with its 787 Dreamliner and get off the front pages for a while, the aircraft maker loses out on a contract for 234 new planes for one of its best customers, Indonesia’s Lion Air. Last year Lion Air ordered more than 200 of Boeing’s 737 single-aisle planes in a deal worth more than $22 billion. The order for 234 planes from Airbus is valued at $24 billion.

The Airbus order was announced today, and it follows on Saturday’s announcement from Boeing that the company was so pleased with CEO Jim McNerney’s work in 2012 that it raised his compensation for the year by 20% to $27.5 million. McNerney earned $23 million in 2011.

Let’s add it up: The 787 Dreamliner, McNerney’s signature program, was three years late and billions of dollars over budget. When it finally did fly, the plane was grounded for flaws in its battery systems that caused onboard fires. That is a record that certainly deserves to be rewarded with a pay hike.

Boeing’s board apparently believes that McNerney had something to do with the company’s 2012 success. Shareholders did not share in that success, however. Boeing’s stock price rose only 2.7% in 2012 while the S&P 500 index rose 13%.

When McNerney took over as CEO in 2005, shares traded at an all-time high of more than $100 before falling to below $40 in 2009. The climb back out of that hole was mostly complete by 2010, when shares rose to near $75.

What McNerney did in 2012 was mostly not much. But given his track record, the less he does the better it is for Boeing.

We have long argued that McNerney should go, but maybe the rest of Boeing’s board ought to be shown the door as well.

Boeing’s shares are down about 1.1% in early trading this morning, at $85.48 in a 52-week range of $66.82 to $86.49.

Filed under: 24/7 Wall St. Wire, Aerospace & Defense, Compensation, Corporate Governance, Shareholder Issues Tagged: BA

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Source: FULL ARTICLE at DailyFinance

Resumption of 787 Flights Up to FAA, Boeing Official Says

By The Associated Press

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Congressional officials say Boeing is proposing a long-term fix for the 787 Dreamliner’s troubled batteries that won’t have the planes back in the air until April at the earliest. (Elaine Thompson/AP)

By JOSHUA FREED

Boeing expects to finish testing its battery fix for the 787 within the next week or two. Then it will be up to the Federal Aviation Administration to decide when the planes fly again.

That assessment from Ron Hinderberger, Boeing’s vice president for engineering on the 787, was more cautious than statements from other company officials, who suggested Thursday that the 787 could be flying within weeks.

Boeing Co. (BA) is testing several changes to the plane’s lithium-ion battery aimed at preventing overheating and a fire — conditions that led to the global fleet of 787s being grounded for the past two months.

Hinderberger said Friday that there will be one flight test. Most tests will be done on the ground, and all should all be done in one to two weeks.

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Boeing's 787 Dreamliner Woes Continue

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Employers Caught Off Guard by 'Unfair' Health-Care Fee

By David Schepp

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Employers are bracing for big fees next year for insuring their employees. The fee, equal to $63 for each employee, is a little-noticed requirement of the Patient Protection and Affordable Care Act that became law in 2010. The fee goes to create a $25 billion fund for insurance companies to offset the cost of covering patients with high medical bills.

As The Wall Street Journal reports, the fee will hit most large employers, and they’re fighting back. The requirement unfair, they say, because it subsidizes individually purchased plans that won’t cover their workers. Companies including Boeing Co. (BA) and a union health plan covering retirees of General Motors (GM) Ford Motor Co. (F) and Chrysler, among other groups, have asked federal regulators to exclude or shield their insurance recipients from the fee.

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The fee goes into affect next year and applies to medical plans covering millions of Americans. It applies to employers who self insure as well as private plans sold by insurers. As the Journal notes, the fee will be smaller in 2015 and 2016, but amounts for those years have yet to be determined.

Few noticed the fee when the act passed three years ago. Employers have spent recent months trying to peel it back, the Journal reports, but final regulations published Monday in the Federal Register left it largely intact.

You can read more about the controversy and learn what insurers are saying in the full story (subscription required).

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What's Important in the Financial World (3/15/2013)

By 24/7 Wall St.

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Boeing 787 Ready to Fly?

Boeing Co. (NYSE: BA) has said, once again, that its deeply trouble 787 will take to the air again soon. Battery problems with the plane have kept it grounded for two months. Regulators in Japan, and particularly the United States, have combed through the mechanics of the plane but have not found root causes. Boeing recently was cleared to make test flights. While Boeing expects a quick resolution, the FAA has said more than once that there may be no quick resolution. According to Reuters:

Boeing, which has Federal Aviation Administration (FAA) approval to test its new battery for certification, said Friday it will encase the redesigned power pack in a steel box, pack it with added insulation, heat-resistant material and spacers, drill drain holes to remove moisture, and vent any gases from overheating directly to the atmosphere outside the aircraft.

“If we look at the normal process and the way in which we work with the FAA, and we look at the testing that’s ahead of us, it is reasonable to expect we could be back up and going in weeks, not months,” the 787′s chief engineer, Mike Sinnett, said at a briefing in Tokyo.

Refurbished iPads

In what could be another bad sign for the demand for Apple Inc. (NASDAQ: AAPL) products, the company has begun to sell some refurbished iPads and iPad minis. Several of these products have only been in the market for few months. Either Apple has found that people have dropped the products because they do not like themo or perhaps these customers anticipate another iPad launch soon and just want to clear their desks, homes and offices of old inventory. According to Apple Insider:

The refurbished mini and fourth-gen iPad are now available in Apple’s online store. Customers can pick up a black 16GB iPad mini with Wi-Fi + Cellular for $429 or a White 32GB Wi-Fi only model for $389.

Customers looking for a full-size iPad can pick up the fourth-generation iPad, which features an improved processor and compatibility with Apple’s new Lightning connector standard. Refurbished fourth-generation models run from $449 for a white 16GB Wi-Fi only model to $679 for a black 32GB Wi-Fi + Cellular model.

More Video Game Headwinds

Research firm NPD has released its monthly data for video game sales. The industry continues to face consumer preferences for using tablets and smartphones instead of consoles as platforms. And the number of inexpensive games that can be download from app stores has risen. Some of the most popular sources of these games are free. This movement has pressured both console makers Microsoft Corp. (NASDAQ: MSFT) and Sony Corp. (NYSE: SNE) and has eroded revenue at game creators and marketers, particularly Electronic Arts (NASDAQ: EA). According to Edge Online:

The software charts saw an overall year-on-year decline in unit sales of 30% compared to February 2012, though there were a similar number of new releases. Total video game software sales at retail amounted to $352 million in February 2013, compared to $484 million …read more
Source: FULL ARTICLE at DailyFinance

Media Digest (3/14/2013) Reuters, WSJ, NYT, FT, Bloomberg

By 24/7 Wall St.

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The head of marketing at Apple Inc. (NASDAQ: AAPL) criticizes Google Inc.’s (NASDAQ: GOOG) Android software and its largest adopter, Samsung. (Reuters)

Citadel will sell the shares it still has in E*Trade (NASDAQ: ETFC). (WSJ)

Competition hurts China Mobile Ltd.’s (NYSE: CHL) earnings. (WSJ)

Amazon.com Inc. (NASDAQ: AMZN) cuts the price of its Kindle Fire HD tablet. (WSJ)

As U.S. retail sales rose last month, consumers saved less. (WSJ)

The head of the Google Android business will move to another job and the head of Chrome operations will take over. (WSJ)

Renault will produce more cars in France, and in exchange, unions will accept pay freezes. (WSJ)

Capital One Financial Corp. (NYSE: COF), Citigroup Inc. (NYSE: C) and Wells Fargo & Co. (NYSE: WFC) agree to new employee clawback provisions after pressure from New York State. (WSJ)

Early tests of the batteries on the Boeing Co. (NYSE: BA) 787 Dreamliner are not set to predict future problems. (NYT)

A Solar Energy Industries Association study shows rapid growth of solar adoption in the United States. (NYT)

President Obama says he will increase pressure about cyberattacks that originate in China. (FT)

Germany says it will reject stimulus in favor of budget cuts. (FT)

Finance ministers at a European Union summit likely will ask to lessen budget demands on many weak nations. (Bloomberg)

Filed under: 24/7 Wall St. Wire, Press Digest Tagged: AAPL, AMZN, BA, C, CHL, COF, ETFC, GOOG, WFC

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Source: FULL ARTICLE at DailyFinance

CEO Optimism Rises for Sales and Capital Spending, but Not for Jobs

By 24/7 Wall St.

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The Business Roundtable (BRT) released its first-quarter CEO Economic Outlook Survey for 2013, showing that average CEO economic expectations for the coming six-month period have improved for first time in four quarters. Unfortunately, CEO optimism may not translate to jobs growth yet. Chief executives are expecting higher sales and capital spending from their companies but are expecting that net hiring will remain flat.

The BRT said, “CEO economic expectations increased for the first time in four quarters. BRT CEOs also expect 2.1 percent growth for 2013, a slight increase from last quarter’s estimate of 2.0 percent.”

Jim McNerney, who is head of Boeing Co. (NYSE: BA) and the chairman of Business Roundtable, said, “The relatively smaller improvement in the outlook for hiring, however, may reflect ongoing uncertainty and a wait-and-see attitude about the business climate in the United States, as agreement on the nation’s debt and budgetary issues remains elusive.”

Today’s survey release was up in the first quarter of 2013, to 81.0 from 65.6 in the fourth quarter of last year, and is back to the its highest level since the second quarter of 2012. The current index is at about its long-term average level of 79.2.

The BRT survey was completed between February 11 and March 1, 2013, and responses were received from 144 member CEOs for a 69% participation rate in the BRT survey. Here is a snapshot:

Roundtable

Filed under: 24/7 Wall St. Wire, Corporate Governance, Economy, Jobs, Labor & Unions, Large Cap Stocks Tagged: BA

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5 Big Analyst Upgrades & Downgrades for Wednesday (BA, WAG, WMT, YUM, ZTS)

By 24/7 Wall St.

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24/7 Wall St. has seen many analyst upgrades and downgrades this Wednesday, but there are several calls which really stand out in key companies.

Boeing Co. (NYSE: BA) was reiterated with a “Buy” rating and with a $100 price target at BofA Merrill Lynch based partly upon Dreamliner tests resuming. It was also upgraded to Hold from Underweight at BB&T and Stifel Nicolaus maintained a “Buy” rating and raised its target to $100 from $85 this morning.

Walgreen Co. (NYSE: WAG) was raised to Buy from Neutral at UBS.

Wal-Mart Stores, Inc. (NYSE: WMT) was reiterated as “Buy” but what stood out here was the firm’s $85 price target at BofA Merrill Lynch.

Yum! Brands INc. (NYSE: YUM) was also maintained as Outperform and its target price was raised by $3 to $70 at Credit SUisse based upon the bleeding in China finally letting up.

Zoetis Inc. (NYSE: ZTS) was started in coverage by the major brokerage firms now that the quiet period has ended: started as Neutral at BofA/Merrill Lynch; started as Neutral at Goldman Sachs; started as Buy at Jefferies; started as Overweight at JPMorgan; started as Buy at Deutsche Bank.

by Jon C. Ogg at 247wallst.com

Filed under: 24/7 Wall St. Wire

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Source: FULL ARTICLE at DailyFinance

Leadership Changes at Boeing Should Include McInerny

By 24/7 Wall St.

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Two key commercial airliner projects at Boeing Co. (NYSE: BA) today got new leaders. Development of the 777X project has been handed to Bob Feldman who previously led development of the 737 MAX. The 737 MAX program has been assigned to Keith Leverkuhn who had been in charge of the propulsion systems (engines) division. The engines division’s new chief will be Nicole Piasecki.

While these are all important projects for Boeing’s future, the company’s current issue with the 787’s electrical system needs immediate attention. CEO Jim McNerny has presided over the company and the 787 since 2005, with not a lot to show for his tenure but long delays, big cost overruns, and a buggy airplane.

We suggested earlier this week that Ford Motor Co. (NYSE: F) CEO Alan Mullaly, formerly the head of Boeing’s commercial aircraft division, should be on the speed dial of Kenneth Duberstein, the chairman of the company’s governance, organization, and nominating committee. Mullaly is due to retire from Ford in less than two years and Boeing could use his turnaround talents and familiarity with Boeing’s products to get the company back on track.

Boeing’s shares are trading up about 0.2% today at $81.19 in a 52-week range of $66.82 to $81.95.

Filed under: 24/7 Wall St. Wire, Aerospace, Aerospace & Defense, Corporate Governance, Management Change Tagged: BA, F

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Will Ford's Mullaly Be Boeing's Next CEO?

By 24/7 Wall St.

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The problems with electrical systems on the Boeing Co. (NYSE: BA) 787 Dreamliner are so severe that the plane may not fly for months. Production has backed up, and airlines almost certainly will ask for compensation. There is no doubt who is ultimately responsible for the failure — chairman and CEO W. James (Jim) McNerney, who joined Boeing in 2005, about the same time as the serious development of the 787 began. The board of Boeing cannot keep McNerney under these circumstances. The most logical person for them to turn to is Ford Motor Co. (NYSE: F) CEO Alan Mullaly.

Mullaly has engineered a spectacular turnaround at Ford and kept it from being the only one of the Big Three not to avoid bankruptcy. Ford already has begun to prepare for his retirement, which could come in little more than a year. Ford does not need a turnaround expert anymore. Mullaly’s efforts have been that successful.

Mullaly ran the Boeing Commercial Airplanes division until he was passed over for the CEO job, which went to McNerney. Mullaly left for Ford in 2006. With that background, Mullaly knows the airline industry as well as almost any executive in the world. He is an engineer who graduated from MIT and worked on versions of almost all the planes Boeing currently sells.

Boeing needs to make a move now so that it can address two problems. The first is that it must regain confidence with customers, shareholders and employees. McNerney cannot do that. His failures are too extensive. Boeing also needs a leader who can step into the job quickly and will not need months and months to learn about the company and its operations.

Today, Boeing is rudderless, perhaps the worst condition in which a large public company can find itself. Mullaly has been the rudder of Ford. It time for the Boeing board to hire him before its situation becomes much worse.

Filed under: 24/7 Wall St. Wire, Corporate Governance Tagged: BA, F

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Source: FULL ARTICLE at DailyFinance

Media Digest (3/5/2013) Reuters, WSJ, NYT, FT, Bloomberg

By 24/7 Wall St.

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China will lean on consumer spending to expand its economy. (Reuters)

Facebook Inc. (NASDAQ: FB) faces more lawsuits over its initial public offering. (Reuters)

The White House says it believes people should be able to unlock their cell phone for use on more than one network. (Reuters)

Pew reports that debt among young people has dropped to a multiyear low. (WSJ)

The Chinese government drops annual GDP growth goals to 7.5%. (WSJ)

Citigroup Inc.’s (NYSE: C) new CEO, Michael Corbat, is more likely to track the performance of individual senior executives. (WSJ)

Fannie Mae and Freddie Mac will combine some operations. (WSJ)

A senior General Motors Co. (NYSE: GM) executive says the company will keep its Opel operations in Europe. (WSJ)

The CEO of H.J. Heinz Co. (NYSE: HNZ) could make $200 million if he leaves the company after a buyout. (WSJ)

Theft of oil from Nigerian pipelines starts to sharply cut production. (WSJ)

Royal Dutch Shell PLC (NYSE: RDS-A) will build LNG plants in Louisiana and Canada. (WSJ)

The chief of Boeing Co. (NYSE: BA) says the return to service of the 787 will depend on how fast the FAA approves a potential fix. (WSJ)

Bond yields on Spanish and Italian debt narrow because of stability in Spain and instability in Italy. (WSJ)

Facebook creates an ad system that could take business from Google Inc. (NASDAQ: GOOG). (WSJ)

Congress accuses key J.P. Morgan Chase & Co. (NYSE: JPM) executives of roles in the bank’s $6 billion loss. (NYT)

Hess Corp. (NYSE: HES) will sell its gas stations as investors pressure it to restructure the company. (NYT)

Apple Inc.’s (NASDAQ: AAPL) shares reach a 52-week low as Google’s reach an all-time high. (FT)

Boeing defends its decision to keep the battery used in its 787 Dreamliner. (FT)

European Union finance ministers may ease budget restraints to cure the fallout from austerity. (Bloomberg)

Pearson PLC (NYSE: PSO) executives tell the Financial Times that a number of positions will be cut. (Bloomberg)

Filed under: 24/7 Wall St. Wire, Press Digest Tagged: AAPL, BA, C, FB, GM, GOOG, HES, HNZ, JPM, PSO, RDS-A

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Boeing Tries to Reassure Skeptical Japanese Customers

By 24/7 Wall St.

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Japan’s airline industry has more to lose than that of any other nation as delays in fixing the Boeing Co. (NYSE: BA) 787 Dreamliner continue. All Nippon Airways (ANA) in particular has relied on the plane.

Now, the U.S. manufacturer plans a series of actions to reassure Japanese customers. However, based on a review of these plans, they hardly seem likely to work, particularly based on the skepticism of authorities.

According to The New York Times:

Japanese investigators have maintained that there is still not enough evidence to show that the batteries themselves are the cause of fires, and that a shock could have caused them to overheat. That could complicate Boeing’s efforts to get regulators around the world to approve their fixes, because they focus only on containing any problems that might arise in the batteries.

Boeing shares are thus far inactive in premarket trading, but closed at $77.36 yesterday. The 52-week range is $66.82 to $78.02.

Filed under: 24/7 Wall St. Wire, Aerospace, Airlines, International Markets Tagged: BA

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Source: FULL ARTICLE at DailyFinance

Israel, US successfully test anti-missile system

Israel‘s Defense Ministry says a joint exercise with U.S. forces has successfully tested the Arrow anti-missile system for the first time. The system is meant to defend Israel from the threat of an Iranian strike.

The ministry said Monday the test was “a major milestone in the development of the Arrow 3 Weapon System.”

The Arrow is produced jointly by Israel Aerospace Industries Ltd. and Chicago-based Boeing Co.

It detects an incoming missile and destroys it with a second missile. Iran‘s Shahab ballistic missile can carry a nuclear warhead and has a range of 1,250 miles (2,000 kilometers), putting Israel well within range.

The Arrow is part of Israel‘s multilayered shield designed to intercept rockets and missiles. Israel sees Iran‘s nuclear and ballistic missile program as an existential threat.

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Source: FULL ARTICLE at Fox World News

Japan identifies spate of Boeing 787 jet problems

Japanese investigators have identified the causes of fuel leaks and other problems with Boeing’s 787 but are still investigating the more serious battery problem that forced an emergency landing in January and the worldwide grounding of the jets.

An oil leak was caused by an improper paint job that led to a switch not working properly, while inadequate taping led to cracks in cockpit glass, and a faulty part led to braking problems, according to the Transport Ministry‘s investigation released Friday into problems that occurred with the 787 Dreamliner in January.

The government issued orders to fix the problems with 787s operated by Japan Airlines and All Nippon Airways, the country’s two major carriers and the biggest customers for Boeing Co.’s new jet.

All 50 of the 787 jets in service around the world have been grounded for more than a month after a lithium-ion battery in a 787 operated by ANA overheated Jan. 16, forcing an emergency landing in western Japan. Earlier in January, a lithium-ion battery caught fire in a Japan Airlines 787 parked in Boston.

Boeing and U.S. authorities are also investigating, but Friday’s findings shed little light on the main problem.

The 787 is the first jet to extensively use lithium-ion batteries, which weigh less, charge faster and are more powerful than other kinds of batteries. Japanese manufacturer GS Yuasa makes the batteries for Boeing.

The aircraft manufacturer said earlier this week that it intends to propose to U.S. federal regulators a temporary fix for the batteries. The official who spoke on condition of anonymity did not disclose details.

A fix for the 787 batteries would require stopping an uncontrolled overheating reaction called “thermal runaway,” in which the battery gets hotter and hotter, and short-circuits spread from one battery cell to another.

The battery problems are not necessarily linked to their manufacturer and could come from the myriads of parts and systems connected to the battery.

Separately, the Japanese ministry said this week it had found the ANA jet’s auxiliary power unit had been erroneously wired to the main battery that overheated.

ANA, which has 17 Dreamliners in its fleet, and JAL, with seven, have had to cancel hundreds of flights over the 787 woes.

JAL and ANA have released plans for flights without the 787 through the end of March, but have not said what they plan to do in the long term. Both companies have said they are ready to seek compensation from Boeing.

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Source: FULL ARTICLE at Fox World News

Boeing to reportedly propose 787 battery fix to FAA

Boeing has developed a plan that it intends to propose to federal regulators to temporarily fix problems with the 787 Dreamliner’s batteries that have kept the planes on the ground for more than a month, a congressional official told The Associated Press on Wednesday.

Boeing Commercial Airplanes CEO Ray Conner is expected to present the plan to Michael Huerta, head of the Federal Aviation Administration, in a meeting on Friday, the official said. The official spoke on condition of anonymity because he wasn’t authorized to speak publicly.

Boeing Co. spokesman Marc Birtel said the company doesn’t talk in advance about meetings with federal officials.

“Everyone is working to get to the answer as quickly as possible, and good progress is being made,” Birtel said.

The FAA and overseas aviation authorities grounded all 50 of the planes in service worldwide after a lithium ion battery caught fire on a plane parked in Boston and a smoking battery led to an emergency landing by another plane in Japan. The 787 is Boeing’s newest and most technologically advanced plane. It was supposed to exemplify the future of commercial aviation, but the groundings have been a major public black eye and financial drain for Boeing, which vies with Airbus for the position as the world’s largest commercial aircraft maker.

The plane is also the first airliner to make extensive use of lithium ion batteries to help power its electrical systems. Lithium ion batteries weigh less, charge faster and hold more energy than other batteries of comparable size. But they are also more susceptible to short-circuiting that can cause fires if they are damaged, have manufacturing flaws, are exposed to excessive heat or are overcharged.

The National Transportation Safety Board is investigating the battery fire in a Japan Airlines 787 that was discovered shortly after the plane landed at Boston’s Logan International Airport on Jan. 7. Japanese authorities are investigating a battery failure in an All Nippon Airways 787 that made an emergency landing nine days after the fire. Investigators have said the batteries experienced short-circuiting and thermal runaway, a chemical reaction that causes progressively hotter temperatures, but they haven’t found the root cause of the incidents.

Japan‘s Transport Ministry said Wednesday its investigation has uncovered a new problem: The aircraft’s auxiliary power unit, which contains a lithium ion battery, was improperly connected to the main battery that overheated.

NTSB investigators found the Boston fire started with multiple short-circuits in one of the battery’s eight cells. That created an uncontrolled chemical reaction known as “thermal runaway,” which is characterized by progressively hotter temperatures. That spread the short-circuiting to the rest of the cells and caused the fire.

The board’s findings are at odds with Boeing’s initial battery testing before FAA‘s safety certification of the plane, which concluded that any short-circuiting could be contained within a single cell, preventing thermal runaway and fire from spreading.

Among the measures being discussed to make the batteries safe enough to return the 787 to the skies are adding more ceramic spacers between battery cells to contain any short-circuiting and …read more
Source: FULL ARTICLE at Fox US News

Boeing engineers split on contract, talks to resume

A Boeing 787 descends in Everett, Washington travelling with crew only from Fort Worth, Texas

SEATTLE (Reuters) – The largest group of engineers working at Boeing Co approved the planemaker's latest contract offer in a vote on Tuesday, likely paving the way for a full agreement as Boeing attempts to focus its resources on fixing battery problems on its 787 Dreamliner. However, members of the union representing about 23,000 engineers also authorized it to call a strike, giving the union some leverage as parties head back toward negotiations. …

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Source: FULL ARTICLE at Yahoo Business

Dubai's A380 concourse in full operation

Dubai’s airport authorities say a purpose-build concourse for Airbus’ A380 aircraft is fully open after weeks of phased-in operations.

The aircraft is a double-decker that seats 525 people and is so large some airports have to be adjusted to accommodate it.

The 20-gate concourse, which hosted its inaugural flight on Jan. 2, is part of a wider $7.8 billion expansion plan for Dubai’s international airport, which seeks to become the world’s busiest by 2015.

The new concourse, formally unveiled Sunday, is also a boost for the European Airbus consortium in its rivalry with Boeing Co., whose 787 has been grounded since mid-January as investigators examine possible problems in its lithium ion batteries.

The Dubai-based carrier Emirates currently flies 31 A380s and has 59 on order.

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Source: FULL ARTICLE at Fox World News