Takeoff appears delayed for 787

Aug. 13, 2007
Boeing confident of 1st delivery in May

Aug. 11--The maiden flight of Boeing's 787 Dreamliner, once slated for August, now likely won't happen until October, sources say.

The delay, reported Friday by the Seattle Post-Intelligencer, would leave Chicago-based Boeing Co. with less than eight months to complete flight testing and gain Federal Aviation Administration certification before delivering the first 787 to Japan's All Nippon Airways in May.

Boeing still is aiming for a late September liftoff for the 787, timing cited by Boeing Chief Executive James McNerney during the company's quarterly earnings call with analysts late last month, said Yvonne Leach, spokeswoman for the 787 program.

But even if the first flight of the 787 slips a few weeks, as it appears likely, Boeing officials think they can meet their ambitious delivery deadline.

"We have contingency plans in place, and we're really protecting that May '08 delivery date," Leach said.

Boeing officials never set a firm date for the 787's first flight, saying only that the aircraft would take wing when it was ready. Still, given the unprecedented scrutiny of the 787's production, word that its schedule might slip sent ripples through Wall Street.

Boeing stock tumbled more than $3, or 3 percent, to $94, Friday, before rallying to finish at $98.44, gaining 14 cents.

Investors are especially nervous because Airbus SAS revealed last year that wiring and design miscues would delay initial deliveries of its A380 superjumbo jet by nearly two years. The blown deadlines cost the European planemaker millions of dollars in penalties and subsidies of replacement jets for A380 customers.

But the 787's production hiccups, so far, appear minor by comparison and typical for a brand-new plane, analysts say.

"It would be almost unusual if it didn't slip," said Richard Aboulafia, vice president of analysis with Teal Group, a Virginia-based consulting and research firm. "The A380 delay isn't a matter of months, it's a matter of years. Delays of months are inevitable, expected."

Boeing's initial 787 delivery likely won't be set off course unless its first flight is pushed past the end of November or early December, said Heidi Wood, an analyst with Morgan Stanley. Since FAA certification doesn't have to occur sequentially, Boeing can continue to work through certification issues while it readies the plane, she wrote in a research note.

Furthermore, delaying delivery for a few months wouldn't hurt Boeing financially, provided that a major, unforeseen flaw in the 787's design weren't to blame, analysts say.

"If it delivers in July, Boeing will lose a little face, but the world will move on," said Cai von Rumohr, managing director with Cowen and Co., a New York-based investment bank. "People have more anxiety about this issue because they're remembering the A380 and the enormous rework required."

Boeing has passed its initial test with the new aircraft, which was rolled out to the public on July 8: successfully assembling the carbon-composite frame created by its production partners around the world. The Dreamliner is the first commercial airliner to boast a frame made largely of superhardened plastics rather than aluminum.

Now, Boeing's engineers must ensure that the plane's myriad new software systems successfully work together before it can take to the skies.

While Boeing remains in a "risk period" with the new aircraft, von Rumohr said, the chances of the 787 needing a major redesign like the A380 did are lower because its engineers are working on systems that are "less revolutionary" than the plane's structure.

Leach, meanwhile, discounted talk of the 787's electrical wiring causing a production bottleneck. While production partners ultimately will stuff wiring into component parts before shipping them to Boeing, employees at Boeing's giant Everett, Wash., plant are handling wiring for the first few aircraft on its assembly line.

"Overall, electrical wiring is good now," Leach said. "We have achieved those milestones."

She also disputed suggestions that Boeing had missed an Aug. 10 deadline for turning on electrical power within the jet.

"We never had a 'public' date for that since we don't have a public date for [the] first flight," Leach said.

She added that it's typical to "power on" an aircraft about two to three weeks before its initial flight.



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