LOT Polish Airlines gives Boeing until years end to settle on 787 compensation to avoid law suit

Boeing Co. has been given until the end of the year by Polish National airline LOT to settle on compensation revolving around its 787 Dreamliner faults before the airline pursues court action, Reuters reports.

 

LOT CEO Sebastian Mikosz told newspaper Dziennik Gazeta Prawna on Thursday that if the two sides are unable to agree on compensation, LOT would be forced to move the dispute into legal proceedings. ”We are holding negotiations because Boeing is our very important partner and we are ready to take any steps possible within the bounds of the law to defend the interests of the company,” Mikosz told the Polish publication.

The news comes as earlier this week LOT explained that it had to delay some of its Dreamliner flights when check-ups revealed that two planes were missing gas filters. The cost of temporary replacement plane rentals, along with a list of other compensation claims, are estimated at about 100 million Polish zlotys ($32 million). However, LOT spokeswoman Barbara Pijanowska-Kuras told the Times that the gas filter issue represented ”no threat to flight safety” as each engine has two filters.

Boeing spokesman Doug Alder Jr. explained, “No other 787s in the worldwide fleet are impacted.” He continued, “Boeing is conducting a thorough review of the cause of this and will implement the appropriate changes to ensure it does not happen again.”

LOT is one of 13 airlines that fly the 787, which has been touted as an industry game-changer given its use of lighter materials and new engines. Boeing has promised that the airplanes will result in 20 percent savings in fuel compensation over previous models along with a 20 percent decrease in emissions.

The jetliner is the first in the industry to be made from composites and also features rechargeable lithium ion batteries.

Despite the cost-saving potential of Boeing’s new airplane, the manufacturer has been bogged down by a variety of technical setbacks. An issue with the manufacturer’s lithium ion batteries earlier this year resulted in a temporary grounding of all planes when a battery caught fire on an All Nippon Airways flight in January.

Then, in July, a fire broke out on a 787 that was parked at London’s Heathrow Airport — an incident whose cause has not yet been determined. This situation with LOT is just one more hurdle for Boeing to get over as it works to keep its reputation from crumbling.

(Thomas Mentel - The Wall Street Cheat Sheet)