* Approval clears way for return of jet to passenger service
* 'We're back in business, baby!' industry group says
(Adds reaction from Boeing, detail about extended range, reaction from airline)
By Alwyn Scott and Andrea Shalal-Esa
April 19 (Reuters) - U.S. regulators on Friday approved a revamped battery system for Boeing Co's 787 Dreamliner, a crucial step in returning the high-tech jet to service after it was grounded in January because the plane's lithium-ion batteries overheated.
The Federal Aviation Administration said it had approved a package of detailed design changes, a move that allows Boeing to issue a service bulletin and begin making repairs to the fleet of 50 planes owned by eight airlines around the world. Other global regulators must approve Boeing's new design for the repairs outside the United States, but were expected to act quickly once the FAA gave its blessing.
The FAA action all but ends a grounding that has cost Boeing an estimated $600 million, halted deliveries and forced some airlines to lease alternative aircraft. Several airlines have said they will seek compensation from Boeing, potentially adding to the plane maker's losses.
The agency also said the jet retained permission to fly up to 180 minutes over remote areas and oceans once U.S. regulators allowed the Dreamliner to return to the skies. There had been talk of scaling back the approved range, known as ETOPS, which would have limited the use of the fuel-efficient jet.
Boeing CEO Jim McNerney said the 787's promised benefits 'remain fully intact.'
Reaction in the industry was swift and joyous.
'We're back in business, baby!' tweeted the Washington Aerospace Partnership, a group of business, labor and local government leaders supportive of Boeing.
'This is a good step forward,' United Airlines said in a statement. United is the only U.S. carrier with 787s and plans to add them to its schedule starting May 31. Plans to launch service from Denver to Tokyo Narita are set for June 10, but depend on completing the modifications by then, it added.
The FAA said that next week it will tell airlines what changes to make and will publish a directive that 'will allow the 787 to return to service with the battery system modifications.'
The directive takes effect when it is published, the agency said.
Much of the design change already is well-known, thanks to Boeing's detailed descriptions of the system to customers, legislators and media.
Before the planes can fly, they must be fitted with a 'containment and venting' system for both the two lithium-ion batteries on the 787, the FAA said. That includes a stainless-steel enclosure to prevent heat, fumes or fire from spreading if a battery overheats in flight.
Batteries and battery chargers must also be replaced with different components, the FAA said.
Boeing teams around the globe were ready to quickly repair the jets. The company also has been conducting regular flights of the 787 to test it before delivery, a process that will speed the process of getting 787s to customers that have been waiting while the plane was grounded.
In approving the change, the FAA is indicating that it believes Boeing's fix is adequate to address the risk of fire on the plane. However, the National Transportation Safety Board continues to investigate what caused a battery to catch fire on a Japan Airlines plane that was parked at the airport in Boston.
The NTSB, the top U.S. transportation investigator, is holding a two-day investigative hearing next week to help it get to the bottom of what caused the fire.
Boeing has said its redesign addresses more than 80 potential causes of fire, and therefore is more rigorous than if a single cause had been found.
On Friday, the NTSB said it would call senior FAA and Boeing officials to testify at the hearing. The agency also is calling officials from Thales SA, the French company that makes the battery system, and GS Yuasa Corp, the Japanese company that made the actual battery.
Among those included: Dorenda Baker, the director of the FAA's aircraft certification service, and Ali Bahrami, the manager of the FAA's transport airplane directorate and head of the Seattle FAA office, which has close connections with Boeing's factories in Washington state.
The NTSB also will call Mike Sinnett, Boeing's chief 787 project engineer, who has been the frontman for Dreamliner engineering questions throughout the grounding.
(Reporting by Alwyn Scott, Andrea Shalal-Esa and Tim Hepher; Editing by Gerald E. McCormick, Stev Orlofsky and Eric Walsh) Keywords: BOEING DREAMLINER/BATTERY
(firstname.lastname@example.org)(646-223-6132)(Reuters Messaging: email@example.com)
Copyright Thomson Reuters 2013. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.