Air NZ keeps the faith with Boeing

Air New Zealand remains confident in its Boeing 787 Dreamliner programme, even though the aircraft has been grounded by US safety authorities.

The airline is not due to take delivery of the first of 10 of the next model of the new generation planes until next year and says it remains committed to the order.

Japan's two biggest airlines and the United States Federal Aviation Administration have grounded more than half the Boeing 787s in use around the world after an emergency landing of one of the jets exposed a battery fire risk in the technologically advanced aircraft.

Air India last night said it had grounded its fleet of six Boeing 787 aircraft under orders from Indian aviation authorities.

Even before action by the FAA - likely to be followed by authorities in other countries - Boeing's share price had tumbled after news of the groundings in Japan in what is being described by experts in the US as a crisis for the plane maker.

The 787-8 that landed on Wednesday had been leaking electrolyte and burn marks were found around the main battery, in an electrical room below the cockpit, according to All Nippon Airways.

The domestic flight landed at Takamatsu airport in western Japan after a cockpit message showed battery problems and a burning smell was detected in the cockpit and cabin.

Boeing is counting heavily on the success of the 787, which has a list price of about $220 million.

Its launch was delayed for more than three years and since it started flying commercially in late 2011, it has been plagued by problems including a battery fire and fuel leaks.

A Boeing spokeswoman told the Herald: "All lessons learned on the 787-8 will be addressed for the 787-9 before it enters service."

Forsyth Barr head of private wealth research Rob Mercer agreed there was plenty of time to iron out problems with the plane by the time Air New Zealand gets theirs.

"The benefit of that is that the 787-8 is going to wear all the creaks Boeing is currently facing."

The fuel-efficient Dreamliner was ideal for Air New Zealand's long-haul routes and an important part of the airline's strategy, Mercer said.

If there were further delays, the airline would not be unduly affected as delays would hit all airlines.

"From a competitive perspective you're not disadvantaged if everyone's in the same position. You're only disadvantaged if you're running a fleet inferior to what you're competing against."

Mercer said Air New Zealand received a discount by signing up as the launch customer for the next model plane, and is likely to have been compensated for delays with discounts on maintenance deals.

Craigs Investment Partners analyst Chris Byrne said it appeared planes early off the assembly line were most affected by the problems.

"A lot of the first planes built generally have issues right across aircraft types," he said. "It's par for the course to a degree.

"I don't think Air New Zealand would be particularly worried at this stage. If it's something we're talking about in six months' time and they're grounded then you've got problems."

Fifty of the planes have been delivered. ANA has 17, Japan Airlines seven, Air India six, United Continental Holdings six, Qatar Airways, five, Ethiopian Airlines four, Chile's LAN Airlines three and LOT Polish Airlines two.

The groundings in Japan pulled Boeing shares down sharply on Wall Street yesterday, dragging the Dow Jones industrial average lower.

Boeing's stock sank US$2.60 to US$74.34, a loss of 3 per cent.

The plane maker insists the Dreamliner is safe. "We are confident the 787 is safe and we stand behind its overall integrity," Boeing chief executive Jim McNerney said.

- Grant Bradley of the New Zealand Herald