Thursday, May 23, 2013

China Clears Boeing 787s for Commercial Service: WSJ

Updated May 23, 2013, 1:50 p.m. ET 


The Wall Street Journal

Chinese regulators have cleared local airlines to fly the Boeing Co. 787 Dreamliner and are expected to allow them to launch overseas flights within a matter of months.

The approval from the Civil Aviation Administration of China on Thursday follows clearance in recent weeks from regulators in the U.S., Europe, Japan and elsewhere for the 787 to return to commercial service after a three-month global grounding while Boeing fixed problems with the jet's batteries.

The CAAC will require carriers to fly their 787s first only on domestic routes, though a senior executive at one Chinese Dreamliner customer airline said the international restriction would be far shorter than that imposed on the Airbus A380.

China Southern Airlines Co.,  the only local customer for the Airbus A380, ran up large losses after being required to fly the super jumbo only on domestic routes for a year before receiving clearance to start international service.

"It isn't a yearlong wait [for the 787], it is more a matter of months," said Joel Chusid, executive director USA at Hainan Airlines Co., 600221.SH -1.02% the fourth-largest Chinese carrier by traffic.

Hainan expects to receive the first of its 10 Dreamliners next month, and hopes to start a new flight from Beijing to Chicago on Sept. 3. Mr. Chusid said that flight would start with an Airbus A340 jet if approval to use the 787 hasn't been received by September. However, he expects its U.S. services to be flown with 787s by next year.

China Southern, which also ordered 10 787s, is expected to receive its first Dreamliner in the coming weeks, according to a person familiar with its plans. The airline declined to comment.

The nation's largest carrier by traffic, had expected to take delivery of the first jet last year after several rounds of production delays, but the plan was held up because Chinese authorities hadn't issued an airworthiness certificate.

The airline said earlier this year that it aimed to receive as many as eight 787s in 2013, and would initially operate them from its hometown hub on key routes such as Beijing and Shanghai, before adding international destinations such as London and Vancouver.

Separately, Japan's All Nippon Airways Co. said Thursday it would start some domestic charter flights with its 787s on May 26, with scheduled service resuming on June 1. United Continental Holdings Inc. earlier this week completed its first commercial 787 flight since the planes were grounded in January.

Chinese approval could potentially help Boeing lock in more orders from one of the world's fastest-growing aviation markets. Boeing expects China will need 5,260 new airplanes in the next 20 years, buoyed by reflecting and growing demand for air travel. China's airlines operated 1,941 planes as of the end of 2012, according to the aviation regulator.

—Yoshio Takahashi contributed to this article. 


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