Boeing Dreamliner Jets Grounded across Globe over Safety [VIDEO]

Europe, Japan, India and The United States have decided to suspend the Boeing Dreamliner jets on safety concerns after a second battery-related problem forced a Japanese flight to make an emergency landing.

The US Federal Aviation Administration (FAA) said that it would temporarily stop the new jet's operations, adding that the airlines will have to show that the lithium ion batteries used in the aircraft meet safety mandates before services resume.

Its decision came after an All Nippon Airways (ANA) aircraft encountered a battery error that reportedly led to smoke in the carrier, prompting an emergency landing. Earlier, another battery-related issue had caused fire in a Japan Airlines flight that was parked in Boston Airport. Both the airlines have grounded all their 787s on safety concerns.

"As a result of an in-flight, Boeing 787 battery incident earlier today in Japan, the FAA will issue an emergency airworthiness directive (AD) to address a potential battery fire risk in the 787 and require operators to temporarily cease operations," the FAA said in a statement.

"Before further flight, operators of US-registered Boeing 787 aircraft must demonstrate to the Federal Aviation Administration (FAA) that the batteries are safe".

In the previous week, US authorities had ordered a broad review of the aircraft. The last time US authorities took similar action was in 1979, when the McDonnell Douglas DC-10 was grounded following a crash in Chicago.

The US regulator's decision prompted a number of other administrations to follow suit. Reuters reported, citing a European Aviation Safety Agency spokeswoman who said that the region would follow the US decision, although Poland's LOT Airlines is the only company in the area owning the Dreamliner jet.

In Japan, the Transport Ministry Vice Minister Hiroshi Kajiyama said that all Dreamliners will be grounded for an indefinite period. India's state owned carrier Air India also clarified that it will suspend all 787 operations until Boeing meets safety standards. Chile's LAN has also confirmed that it will ground its jets following the US warning.

Despite the widespread groundings, Boeing maintained that it was confident on the jet's reliability.

"Boeing is committed to supporting the FAA and finding answers as quickly as possible. The company is working around the clock with its customers and the various regulatory and investigative authorities. We will make available the entire resources of The Boeing Company to assist," said the company in a statement.

The 787 Dreamliner, which has a list price of about $207m, is one of Boeing's most technologically advanced products. Considering the significant investment behind the development of the new jet, its future is critical to the company's financial outlook. The FAA's decision has called for urgent measures to fix the battery problem, but analysts suggest that there is no clarity on what the real cause is.

"Nobody knows what the fix is because they don't know what the problem is," John Goglia, a former member of the US Transportation Safety Board, told Bloomberg. Last week, Boeing's chief engineer for the 787, Mike Sinnett, had told reporters that Lithium ion batteries have the potential to catch fire if overcharged and once ignited the chemicals in it could produce oxygen making the fire difficult to be put out, but added that "it was the right choice". Lithium ion batteries are one of the major innovations in the Dreamliner, which the company claims uses up about 20 percent less fuel than other jets.

The latest developments have prompted analysts to review Boeing's financial prospects with the 787. Moody's Investor Service has said that the suspension of the Dreamliner's operation was a negative development for the firm's credit outlook.

"While product performance issues are commonplace on new aircraft programs, the company faces heightened challenges in quickly resolving problems with the 787's electrical system in order to have the grounding order lifted," noted Russell Solomon, Moody's Senior Vice President and lead analyst for the company.

"This could pose new operating and financial pressures for Boeing, including further delay in delivery schedules and future order flow, as well as ongoing reputational risk".

After a number of delayed deliveries, Boeing has been looking to increase its 787 production to meet the demand. Boeing shares slid 1.9 percent to $72.90 at in New York during after market hours, extending an earlier fall of 3.4 percent. Shares of its battery-maker, GS Yuasa Corp tumbled around 4.7 percent in Tokyo.