Airlines Disappointed, But Taking 787 Delay in Stride

Airlines say they can deal with the delay and do not expect it will hurt their operations substantially.


SEATTLE_Despite their dismay that Boeing Co. has pushed back delivery of its first 787s by at least six months, airlines waiting for the plane say they can deal with the delay and do not expect it will hurt their operations substantially.

Japan's All Nippon Airways Co. is first in a line of 50 customers that have ordered the medium-sized, long-haul jets.

It was expecting to get the first of its 50 planes next May, but on Wednesday, Boeing announced it was postponing the 787's initial delivery at least six months, mostly because of problems in its supply chain that have complicated assembly of the first planes on the production line.

Though it is not happy with the delay, All Nippon Airways said it's not overly concerned because it can keep flying the Boeing 767s that the 787 Dreamliners will replace longer than anticipated.

"For now, we don't expect it to have such a huge impact, but we are studying it further," Shinichi Shinkawa, a spokesman for All Nippon Airways, said in a statement issued Thursday from the airline's Tokyo headquarters.

Boeing is in talks with 15 customers about rescheduling deliveries. It is unclear exactly how many planes will be delayed and for how long, but Boeing spokeswoman Yvonne Leach said Thursday the company expects to catch up to its original delivery schedule by 2010.

Boeing shares slid for a second day Thursday, closing down 2.5 percent at $96.26.

The 787 will be the first large airliner made mostly of lightweight, sturdy, carbon fiber-reinforced composites rather than aluminum. Boeing has promised the plane will be significantly more fuel efficient, cheaper to maintain and more comfortable than comparable planes flying today.

Northwest Airlines, the first North American carrier to order the 787, was to start taking delivery of its 18 planes next August, and expects to get an updated delivery schedule from Boeing within the next few weeks.

"We're disappointed by Boeing's delay, but we can certainly adapt," Northwest spokesman Roman Blahoski said.

"Just because there's a six-month slide in the initial delivery does not mean there's going to be a six-month slide in all deliveries," Blahoski added.

Australia's Qantas Airways Ltd. said Boeing has assured the airline that its first 15 787s - which had been scheduled for delivery between August 2008 and December 2009 - will be delivered by 2009.

Those planes will fly international routes for Qantas' budget carrier, Jetstar. Geoff Dixon, the airline's chief executive officer, said Qantas has contingency plans for any short-term capacity shortages.

"Once Boeing confirms a revised delivery schedule, we will assess the need for any other measures such as delaying the retirement of aircraft," Dixon said in a statement.

Qantas, one of the biggest 787 customers, has placed 45 firm orders, is finalizing orders for another 20 planes, and has options and purchase rights for an additional 50, Boeing said.

Richard Aboulafia, an analyst with aerospace and defense consulting firm Teal Group, said he thinks Boeing has set a realistic goal for its initial 787 deliveries, but has doubts about its ability to get 109 planes off the production line by the end of 2009.

Another big question mark, Aboulafia said, is how Boeing can claim the delays won't materially affect its earnings or guidance for next year.

"I'm not sure how it couldn't," Aboulafia said. "You've got a delivery revenue shortfall, any additional rework that needs doing and you've got penalty payments."

This content continues onto the next page...

We Recommend