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|Delhi||Rs. 29200.00 (0%)|
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Pressure grew on Wednesday for Boeing to compensate airlines in hard cash for disruption caused by the grounding of its 787 Dreamliner as two airlines manoeuvred for immediate help instead of future purchase discounts.
Leading 787 customer All Nippon Airways wants cash refunds, rather than discounts on future orders, for losses inflicted by the worldwide grounding in place since mid-January, a person familiar with the airline's intentions told Reuters.
In India, a senior government source said state carrier Air India would take the same stand in favour of direct refunds.
All 50 Dreamliners delivered worldwide since it entered service in late 2011 were idled after separate incidents with the plane's battery at a U.S. airport and on a domestic flight in Japan.
ANA operates 17 of those aircraft and is likely to have been hit hardest by having them out of service. The airline has cancelled more than 3,600 flights to the end of May.
"ANA would prefer to have the cash," said the person, who asked not to be identified, adding that compensation talks with Boeing had not yet begun.
"This is not something we have disclosed," said ANA spokesman Ryosei Nomura. "Nothing has been decided regarding future talks with Boeing."
Air India has six of the $200 million jets and has ordered 21 more.
"We will obviously ask for cash. We will negotiate once the planes start flying again," said the senior Indian government source, who has direct knowledge of the situation.
"Air India will surely ask for compensation. There is no question about it."
Boeing has yet to say if it will compensate carriers for lost revenue from the 787's grounding. Nor has it indicated how it would do this or how much it might pay.
Persuading customers to accept discounts on future aircraft purchases would allow Boeing to spread any reimbursement costs over several years. Airlines, though, may see cash compensation as a quicker way to make up for their losses.
Boeing declined to comment on compensation issues.
"There's a singular focus on getting the airplanes returned to service. Our customers want that and we're working hard to achieve that," said spokesman Marc Birtel.COMPLEX CONTRACTS
Boeing has reportedly faced billions of dollars in fees for three years of delays in getting the advanced 787 into service, mainly because of problems with a global production system.
Just as with consumer objects like cars, airlines receive a warranty which, while guaranteeing repairs, doesn't typically oblige manufacturers to compensate for lost business.
In a proforma warranty attached to a regulatory filing on sales of smaller planes in the United States, Boeing guarantees its products are free from defects in material and design.
Significantly, these include "selection of materials and the process of manufacture, in view of the state of the art at the time of design." Battery experts have said Boeing's choice of lithium-ion batteries was current when the 787 was designed.
When dealing with wing cracks on its A380, Boeing's European rival Airbus
Tim Clark, head of the A380's largest operator, Emirates Airline, told reporters earlier this month that Airbus "recognize the commercial distress that has put us into."
Since airplane purchases tend to be complex and can involve long-term ties, compromise is common. When Boeing's 747-8 hit snags, instead of cancelling, Hong Kong's Cathay Pacific came away with a good deal on brand-new 777s.
Delays caused by strikes or events outside manufacturers' control, such as earthquakes, are usually deemed "excusable".
After ANA, which has ordered another 66 Dreamliners, the biggest 787 operator is rival Japan Airlines Co (JAL) <9201.T> with seven of the jetliners, and another 38 on order.
ANA has not said how much the 787's grounding has cost it to date. It has a large cash buffer, having raised $1.8 billion in a share sale last year to fund aircraft purchases and possible acquisitions.
JAL President Yoshiharu Ueki said on Tuesday the 787's grounding could knock 1.1 billion yen off the airline's operating profit for April-May, taking the total hit since the grounding to 1.8 billion yen. In October-December, the company had an operating profit of 46 billion yen.
Without yet having found what caused the battery incidents in January, Boeing last week unveiled a new battery system and predicted the 787 could be back in the air within weeks - a forecast that ANA chief Osamu Shinobe described as a best-case scenario as it remained unclear how long regulators will take to approve Boeing's battery fix.
ANA estimates it may take a month to fit the new battery systems to its 787 fleet - even after Boeing completes certification testing, gains regulatory approvals and ships all the parts and equipment to planes parked around the world.