* U.S. regulator grounded Boeing's Dreamliner fleet in Jan
* Battery faults sparked Dreamliner safety concerns
* Boeing says planes safe to fly, fix found
By Aaron Maasho
ADDIS ABABA, April 27 (Reuters) - Ethiopian Airlines on Saturday became the world's first carrier to resume flying Boeing Co's 787 Dreamliner passenger jets, landing the first commercial flight since the global fleet was grounded three months ago following incidents of overheating in the batteries providing auxiliary power.
The flight from Addis Ababa to Nairobi was the first since regulators grounded all Dreamliners on Jan. 16 after two lithium-ion battery meltdowns that occurred on two jets with other airlines within two weeks that month.
U.S. regulators approved a new battery design last week, clearing the way for installation and a resumption of Dreamliner flights by airlines around the world.
The battery faults raised fears of a possible mid-air fire, drawing worldwide attention to Boeing and denting the reputation of its flagship plane.
"I wasn't aware that I was going to be on the 787 Dreamliner until on my way to the airport. It was a good service and the flight was pleasant," said Senait Mekonnen, an Ethiopian restaurateur, moments after the plane landed.
The fully booked flight arrived at Nairobi's Jomo Kenyatta International Airport just after 9.30 GMT, with passengers giving the crew a round of applause upon landing.
The grounding of the Dreamliner fleet has cost Boeing an estimated $600 million, halted deliveries of the aircraft and forced some airlines to lease alternative planes.
The Dreamliner cost an estimated $20 billion to develop and represents a quantum leap forward in design, offering a 20 percent reduction in fuel burn and added cabin comforts such as higher humidity, larger windows and modern styling.
But by sparking fears of a dangerous mid-air fire, the battery problems drew worldwide attention to both aircraft safety and the technology behind lithium-ion batteries, which are widely used in laptops, mobile phones, electric cars and other products.
The scrutiny turned from what are often called normal "teething pains" for a new plane into a serious crisis for Boeing. As the plane goes back into service, what caused the fire is still unknown.
The battery that overheated on a parked Japan Airlines 787 in Boston caught fire and burned for more than hour before firefighters put it out. The plane was on the ground and empty. The second incident, which has not officially been termed a fire, occurred during a flight in Japan.
An odour of smoke in the cabin and warnings in the cockpit prompted the All Nippon Airways pilots to make an emergency landing and evacuate the aircraft. Boeing said both incidents showed its safeguards had worked.
CAUSE NOT YET FOUND
After the second incident, airlines were swiftly barred from flying the 250-seat aircraft, which carries a list price of $207 million. The U.S. National Transportation Safety Board (NTSB) launched a full-scale investigation to find the root cause of the Boston fire and examine the process by which the Federal Aviation Administration (FAA) approved Boeing's design.
The NTSB has not yet found the cause, and after hearings last week the investigation continues.
The last time an airliner fleet was grounded was more than a generation ago, when the U.S. Federal Aviation Administration banned the McDonnell Douglas DC-10 jet in 1979 after a crash in Chicago killed 273 people.
Boeing spent thousands of hours and millions of dollars redesigning the battery system, drawing on its vast staff of engineers and experts in everything from fighter planes to rockets and satellites.
The changes include a revamped battery less prone to heat build-up, a redesigned charger and a stainless-steel enclosure capable of withstanding an explosion and equipped with a metal exhaust tube to vent fumes and gases outside the jet, if the battery overheats.
International airlines have been slowly putting the Dreamliner back into their schedules. United Airlines, the only U.S. carrier with the jet, said it will begin commercial flights on May 31. All Nippon Airways plans to conduct its first test flight of the revamped 787 on Sunday but has yet to decide when to resume passenger flights.
Ethiopian Airlines previously said its fleet did not suffer any of the technical glitches experienced by other Dreamliner jets, though it withdrew the planes from service to undergo the changes required by the FAA.