U.S. launches safety review of 787 after recent issues

The U.S. government ordered a wide-ranging review of Boeing's latest passenger jet, the 787 Dreamliner, citing concern over a fire and other recent problems but insisting the plane was still safe to fly.

It was unclear how long the review will take or how much it will ultimately cost Boeing, but the company was concerned enough that it sent a top executive to a Washington press conference on the problem. Boeing shares fell 3 percent.

The 787 represented a leap in the way planes are designed and built, but the project was plagued by cost overruns and years of delays. Some have suggested Boeing's rush to get planes built after those delays resulted in the recent problems, a charge the company strenuously denies.

Either way, regulators said a thorough examination was needed to identify the root cause of the problems, including a fire on a parked 787 on Monday.

"There are concerns about recent events involving the Boeing 787. That is why today we are conducting a comprehensive review," Transportation Secretary Ray LaHood told a news conference followed by more than 100 reporters around the world.

Those concerns notwithstanding, though, LaHood also maintained the plane was still airworthy.

"I believe this plane is safe and I would have absolutely no reservations about boarding one of these planes and taking a flight," he said.

While the FAA launched its review, Boeing customer All Nippon Airways had a launch of its own, initiating Dreamliner service between Tokyo and the Silicon Valley hub of San Jose. Passengers preparing to board shook off any suggestion they might be worried.

"Whenever there's a new plane there's some breaking in that comes with it. If the pilot's willing to get behind the stick and ride the plane, I have a great deal of confidence in the worthiness of the plane," said Marc Casto, 37, who runs a San Jose-based travel company.

Boeing shares fell 2.7 percent to $75 in late trading. Since December 4, when the first of the recent incidents took place, the stock is up 1.5 percent, underperforming a 4.3 percent gain in the S&P 500.

Much like the company's customers, who have generally stood behind it, analysts give the company good marks for its early response to the crisis.

"Boeing is doing a good job getting in front (as much as a company can) of the FAA situation. My view is that if the FAA deems this as a non-design issue, Boeing will be fine. If this is a design issue, it will be more troublesome because we need to pause the production to fix the design and then proceed," said Morningstar analyst Neal Dihora.