Military

Dreamliner Customers Want Cash Compensation from Boeing

787 With Mt Rainier in DistanceK65116
courtesy Boeing Co.
All 50 of the 787 Dreamliners delivered to customers of the Boeing Co. (NYSE: BA) have been grounded until the company can figure out fix for the battery problems that have bedeviled the aircraft. Now, some of Boeing’s customers are lining up to seek cash compensation for the grounding and cancelled flights.

All Nippon Airways (ANA) has taken delivery of 17 Dreamliners, all are grounded, and ANA has cancelled more than 3,600 flights through the end of May due to the battery problems with the plane. An unidentified “person familiar with the airline’s intentions” told Reuters that ANA “would prefer to have cash” as opposed to discounts on future deliveries of 49 more Dreamliners. Boeing, of course, would prefer the discounts which would spread out the hit to its bottom line over a few years.

Japan Airlines (JAL) owns 7 Dreamliners and has another 38 on order, and it, too, would prefer to get cash now rather than discounts later. Air India also prefers a cash settlement.

JAL’s president said yesterday that Dreamliner flight cancellations for April and May would cut operating income by $11.6 million. Adding in prior cancellations, the total cost to JAL may easily surpass $20 million. ANA’s losses could be even larger.

Boeing had not comment other than to say that the company continues its “singular focus” on getting the Dreamliners back in the air. The compensation problem won’t go away that easily though, and the smart money says Boeing will end up paying cash for its missteps — again.

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