Confidence Issues Linger as the Dreamliner Soars Again

BEIJING â€" For nearly two hours on Sunday morning a Boeing Dreamliner 787 cruised the skies above Japan, with Boeing chief of commercial aircraft, Ray Conner, and the All Nippon Airways president, Shinichiro Ito, on board.

The presence of the two top airline executives on the test flight appeared aimed at restoring confidence in a plane that was grounded in January after two incidents in which batteries overheated in two separate aircraft, leading to a lengthy and costly grounding of the fleet. Fixes designed by Boeing and approved by the Federal Aviation Administration have been made to the batteries and Japanese airline authorities ordered other safety measures, as my colleague Hiroko Tabuchi reported.

The ANA flight left Haneda airport in Tokyo at 8:59 a.m. local time and returned without incident at 10:54 a.m., Reuters reported, citing an airline spokesman.

What next for the hitherto-troubled Dreamliner? It’s the only large commercial airliner equipped with the battery in question, a lithium-ion battery made by a Japanese company, as part of its power system, Bloomberg News reported.

It’s all about the fixes working, of course - but also about confidence, analysts said.

The fixes include better insulation between the eight cells in the battery, gentler charging to minimize stress and a new titanium venting system, The New York Times reported.

Enough? Akihiro Ota, the Japanese transportation minister, seemed to think so, saying at a news conference last week he was satisfied with the measures Boeing had taken to eliminate risks of fire. “They have adopted defense in depth,” Mr. Ota said.

But ANA plans at least 230 test flights in May before putting the aircraft back into commercial use. It owns 17 of the 50 Dreamliners already delivered, while Japan Airlines owns seven. Ethiopian Airlines Saturday made the first commercial flight with a Dreamliner since January. JAL will begin test flying its Dreamliners in May and aims to resume normal operations in June, the airline said.

ANA said it intended to set up a dedicated Web site to address passenger concerns about the safety of the 787.

“It’s going to be difficult to get passengers to fly,” Ryota Himeno, an analyst at Barclays Securities in Japan, told Bloomberg. “ANA needs to invest a lot of time in flying the planes before customers come back.”

Japanese transportation authorities are aware of the challenge. “We will ask Japanese airlines to ensure the safety of passengers and provide them with information,” Mr. Ota, the transport minister, said last week.

Boeing rival Airbus has decided to abandon the battery altogether, Bloomberg reported.

It will not use lithium-ion batteries for its A350, the direct rival to the 787, after Boeing encountered problems. Airbus plans the first A350 deliveries next year, Bloomberg said.

Despite the problems, Boeing profits rose in the first quarter, according to reports.

“Our first priority in the days ahead is to fully restore our customers’ 787 fleets to service and resume production deliveries,” Boeing chairman Jim McNerney said in a statement. McNerney said that the company “worked around the clock to resolve the 787 battery issue,” while increasing deliveries of the 737 and 777 planes.

Banking Advice From Britain’s Businessman Archbishop

LONDON â€" The Church of England was once known as the Conservative Party at prayer.

That was before new generations of priests and prelates began asserting their independence from the British establishment by reminding politicians of all parties of their duty to the more vulnerable members of society.

Justin Welby, enthroned only last month as Archbishop of Canterbury, has already set the tone for his leadership of the Anglican Church with trenchant comments about the Conservative-led government’s handling of the economy and criticism of the country’s bankers.

As my colleague Alan Cowell wrote for Rendezvous this week, the Right Rev. Welby used an address on Monday to offer a somber assessment of the country’s economic woes and to warn that it would take “something very, very major” to shed them.

The archbishop followed up with comments broadcast on Saturday criticizing a “culture of entitlement” in the City of London, Britain’s financial center.

In a BBC interview, he urged a reform of the banking sector that would require bankers to undergo formal professional training and pass exams.

Politicians have become used to being preached at by members of the Church on issues that are arguably beyond their competence. The difference this time is that the archbishop can claim to know what he is talking about.

He was an oil company executive before he came to the priesthood relatively late in life. A member of the House of Lords - Britain’s upper house - he also sits on the parliamentary banking commission.

Among those who welcomed his contribution to the economic debate, Vicky Beeching, a broadcaster and theologian, posted on Twitter:

The archbishop defended remarks on Monday in which he suggested Britain was suffering a depression rather than a recession, although he acknowledged he might have upset the government of Prime Minister David Cameron.

“Sometimes feathers get ruffled,” he said in the BBC interview with George Parker, the Financial Times political editor. “I mean â€" that’s life.”

The archbishop and the prime minister both went to the prestigious Eton College, which has traditionally tuned out leaders of the British establishment. But, as Mr. Cameron was jokingly reminded last year when he endorsed the prelate’s appointment, there are very different kinds of Old Etonian.

“His distinguishing feature and most valuable asset is his former career in the oil industry,” George Pitcher, an Anglican priest, wrote last November. “Welby is clearly a man who knows how corporations work.”

His background prompted the question this week â€" evidently only partly in jest â€" whether bishops should run the banks.

Robert Peston, the BBC’s business editor, said the archbishop had highlighted ethical aspects of the financial crisis in his proposals for reform, in which he had stressed the importance of bankers having a closer and more personal relationship with their customers.

More specifically, he has called for a major unnamed bank to be broken up into regional banks that would be closer to their local communities.

“Economic crises are a major problem when they are severe,” Archbishop Welby said on Monday. “When they are accompanied by a financial crisis and a breakdown in confidence then they become a generational problem.”

Answering his own question about whether anyone should care what this man of the cloth thought about the banking sector, Mr. Peston wrote, “The UK’s economic malaise shows no signs of being fixed any time soon by the supposed experts in the Bank of England or Treasury, so there may be a case for looking elsewhere for wisdom.”

What do you think? Should church leaders, whatever their expertise, intervene on issues of government economic policy. Or should they limit their preaching to the pulpit? Let us know your views.

Hong Kong Retains Allure as Retail Mecca

HONG KONG â€" Amid camera-wielding photographers, flower bouquets and a bustling crowd of curious onlookers, the Uniqlo opened a flagship store in the heart of one of Hong Kong’s busiest shopping districts on Friday - underlining the city’s unrelenting attraction for retailers seeking exposure to the giant mainland Chinese market.

It took barely half an hour for the store - which spans three floors and features suspended mannequins moving up and down along a central light well - to reach a semblance of normality, with shoppers eagerly snapping up the colorful casual clothes for which Uniqlo, part of the Japanese company Fast Retailing, is best known.

With a floor space of more than 37,500 square feet, or about 3,500 square meters, the store is a far cry from the far smaller shops that Uniqlo began with in the 1980s. It is also part of Fast Retailing’s strategy of rapid expansion outside Japan, whose economy has been beset by deflation and anemic growth for years.

About 25 percent of the 1,137 stores Uniqlo operated as of last August were outside Japan - 145 of them in China, where the first outlet was opened in 2002. By next August, this will have risen to about 35 percent, with 225 stores in mainland China, Fast Retailing forecasts. The aim, company executives said, is to open 100 Uniqlo stores in China each year, and to have 3,000 stores in across China in 10 years’ time.

Hong Kong, too, is a must-be-there location for international retailers - despite the fact that rents retail, office and residential rents are among the highest in the world.

Uniqlo did not say how much it is paying for the new Hong Kong store - its 16th in the city â€" which is located in the neighborhood of Causeway Bay.

According to a recent report by the real estate services firm CBRE, however, Causeway Bay is the most expensive area in Hong Kong, with an average rent of 786 a square foot Hong Kong dollars, or $101.2 per square foot in U.S. dollars per month. The most expensive locations within the neighborhood, which is home to scores of high-end clothing and jewelry stores and some of Hong Kong’s largest shopping malls, can be more than three times as expensive to rent, CBRE said.

Still, retailers keep coming: Gap and American Eagle Outfitters opened up shops in Hong Kong in 2011, Forever21, another popular U.S. brand, opened a large store just a few steps from the new Uniqlo outlet last year. Abercrombie & Fitch’s flagship store, in the heart of the financial district of Central, opened last August. And Topshop, a British brand, is due to open a large shop this summer, also is in Central.

The reason for all this activity is not so much Hong Kong’s population of 7 million, but the Chinese shoppers to flock to capitalize on the lower taxes in Hong Kong. They are also drawn by the perception that what they are buying here is, well, the genuine article.

Their numbers have ballooned from 6.8 million in 2002 to nearly 35 million in 2012 - and the growth is likely to continue.

No wonder the retail scene, too, has swelled.