Poland's state-controlled LOT Airlines said it would seek compensation from Boeing for grounding its two planes. It expects delivery of three more Dreamliners by the end of March, but would only take them if the technical issues have been resolved, deputy chief Tomasz Balcerzak told a news conference.

The lightweight, mainly carbon-composite plane has been plagued by recent mishaps, raising concerns over its use of lithium-ion batteries. An All Nippon Airways (9202.T) domestic flight made an emergency landing on Wednesday after warning lights indicated a battery problem.

Boeing shares fell 1.3 percent, or about 88 cents, to $73.44 in early New York Stock Exchange trading, hitting their lowest point in about two months. For the first few weeks of the recent spate of incidents, the stock held up relatively well compared with the broader market, but in recent days has weakened as analysts grew wary of the costs Boeing may face.

"While it is entirely possible that the current battery issue is resolved in short order, it is also equally possible that the 787s current certification could be called into question," BB&T Capital Markets analyst Carter Leake wrote Thursday, cutting his rating on the stock to "underweight."

The U.S. Federal Aviation Administration FAA.L on Wednesday temporarily grounded Boeing's newest commercial airliner, saying carriers would have to demonstrate the batteries were safe before the planes could resume flying. It gave no details on when that might happen.

It is the first such action since the McDonnell Douglas DC-10 had its airworthiness certificate suspended following a deadly crash in Chicago in 1979, analysts said.

Boeing has sold about 850 of its new planes, with 50 delivered to date. Around half of those have been in operation in Japan, but airlines in India, South America, Poland, Qatar and Ethiopia, as well as United Airlines in the United States, are also flying the 787, which has a list price of $207 million.

SCHEDULE GAPS

With most of that Dreamliner fleet now effectively out of action as engineers and regulators make checks, primarily of the plane's batteries and complex electronics systems, airlines are wrestling with gaps in their scheduling.

Japan Airlines Co (9201.T) said it canceled eight Dreamliner flights between Tokyo and San Diego until January 25, affecting some 1,290 passengers, and would switch aircraft for another 70 flights scheduled to fly the 787. Air India said it would use other planes on scheduled Dreamliner flights.

Qatar Airways, whose Chief Executive Akbar Al Baker had been one of the most outspoken critics of delays and technical problems with the 787, said his airline would ground its fleet of five planes.

"We ensure all our aircraft meet the most stringent safety standards and this will not be compromised in any way," he said in a statement.

Keeping the 787s on the ground could cost ANA alone more than $1.1 million a day, Mizuho Securities calculated, noting the Dreamliner was key to the airline's growth strategy.

Regulators in Japan and India said it was unclear when the Dreamliner could be back in the air. A spokesman for the European Aviation Safety Agency said the region would follow the FAA's grounding order.

Boeing said in a statement it was confident the 787 was safe and it stood by the plane's integrity.

Passengers leaving United's flight 1426 in Houston, which took off from Los Angeles moments before the FAA announcement, reported an incident-free trip. "I fly over 100,000 miles a year," said Brett Boudreaux, a salesman from Lake Charles, Louisiana. "That was one of the most relaxing flights I've ever had. I hope they sort it out. It's a hell of a plane."

'WORST THING'

Scott Hamilton, an analyst at Leeham Co, an aerospace consulting firm in Seattle, said having a plane grounded "is about the worst thing that can happen to an airplane program."

"If this goes beyond just a bad design of a battery and you have to redesign some systems leading to the battery, and look at why didn't safeguards on this thing work, you get a ripple effect," he said. "They'll have more airplanes going out the door and they can't deliver them. So you build up inventory. Every day ... is an added day of delivery delays."

Six new 787s, painted and apparently ready for delivery to various airlines, were parked on the apron at Paine Field in Everett, Washington, adjacent to Boeing's 787 plant on Thursday. Four more Dreamliners occupied the final assembly spots inside the factory.

SMOKE AND SOOT

The Japan Transport Safety Board said the battery on the ANA flight that made the emergency landing was blackened, carbonized on the inside and weighed 5 kg less than normal, the Kyodo news agency reported. Representatives from the FAA, Boeing and the U.S. National Transportation Safety Board were due in Japan on Friday to inspect the plane.

The use of new battery technology is among the cost-saving features of the 787, which Boeing says burns 20 percent less fuel than rival jetliners using older technology.

Shares of GS Yuasa Corp (6674.T), a Japanese company that makes batteries for the Dreamliner, tumbled as much as 7.5 percent to a two-month low. The stock has dropped 18 percent since January 7 when one of its batteries caught fire in a parked JAL-operated 787 at Boston Logan International Airport.

The 787 represents a leap in plane design, but the project has been plagued by cost overruns and years of delays.

Based on how regulators usually handle air safety, experts say U.S. authorities and Boeing will discuss the criteria for inspections on the Dreamliner. They would also set what fixes, if any, are needed and a timetable for those. Analysts say it is unclear how long that could take or how much it could cost, but some question whether Boeing can stick to its target of doubling 787 output to 10 a month by the end of this year.

"It guarantees some throttling back in production. It's clear one of the problems was building planes before fully understanding the rhythm of production," Teal Group analyst Richard Aboulafia said.

But aircraft industry sources say there was no immediate threat of airlines cancelling orders. "You aren't going to see cancellations," Leeham's Hamilton said, noting airlines have no alternative as rival Airbus (EAD.PA) models are sold out and have years-long waiting lists.

Airbus reported a 43 percent drop in orders for its planes last year, surrendering its crown as the world's largest plane maker to Boeing. The European manufacturer said it was confident of achieving the maiden flight of its A350 carbon-composite airliner by mid-year. The new plane will also use lithium-ion batteries, made by France's Saft Groupe (S1A.PA). (Additional reporting by William Rigby, Tim Hepher, Andrea Shala-Esa, Erwin Seba, Mari Saito, Anurag Kotoky, Karolina Slowikowska, Adrian Krajewski and Reuters bureaux; Writing by Ian Geoghegan and Ben Berkowitz; Editing by Alex Richardson and Maureen Bavdek)

• A Permanent Economic Emergency