Boeing says Dreamliner sales set record pace But noncommittal American, fuselage delays prove drags

June 21, 2007

PARIS - Boeing Co.'s new 787 Dreamliner passenger jet, which will enter service next year, is now the fastest-selling commercial aircraft in history, Boeing said Tuesday at the Paris Air Show.

But two North Texas companies - one a partner on the 787, the other a potential customer - seem to be providing a bit of drag.

Scott Carson, the head of Boeing's commercial airplanes division, hailed the rapid sales pace of the 787 during a news conference to announce that International Lease Finance Corp. has agreed to buy 50 more of the planes.

With the ILFC purchase, customers have ordered 634 of the new aircraft, worth almost $100 billion.

But Fort Worth-based American Airlines, the world's largest airline, has yet to commit to buying any 787s.

Also, one of the 787's main subcontractors, Dallas-based Vought Aircraft Industries Inc., has acknowledged some delays in building the jet's fuselage sections.

Fuel efficiency

The 787 is attracting buyers in part because of its fuel efficiency. As much as half of the main structure is made of a composite material that's lighter than metal.

Some analysts say the problems Vought and other subcontractors are working through may be one of the reasons that American hasn't opened its checkbook for the 787.

There had been speculation that an American order would be announced at the show, but the company now seems likely to delay a decision until after it has completed its latest labor negotiations with its pilots.

Officials at American remain vague about their intentions.

"Our CEO, Gerard Arpey, has said a couple of things about the 787 - 'It's an interesting aircraft' and 'stay tuned,'" American spokesman Tim Wagner said in an e-mail.

"Other than that, we have said publicly that we have the right to purchase the 787, but we have not commented on any specific plans to do so."

Aviation analyst Scott Hamilton cited several reasons he thinks American is taking its time.

"American has made it pretty clear that they don't want to order any airplanes until they have their pilot labor contract sorted out," he said. "So that's the first thing."

Mr. Hamilton added that American might also be waiting to see what Boeing's main competitor, France's Airbus, ultimately offers in its answer to the 787, the A350.

Even if American did want to buy the 787, so many other buyers are lined up that it will be several years before any Dreamliner takes to the skies with American's logo on it.

Boeing could speed up production of the 787, Mr. Hamilton said, if it wanted to convince American that it wouldn't have to wait so long.

But cranking up production rates may not be as easy as simply giving the order.

"I think their production issues are more challenging than they had anticipated," Mr. Hamilton said.

Expected delays

Boeing has acknowledged - and did so again Tuesday - that there have been some obstacles in designing and building the first few 787s.

But officials insisted that the company had planned for delays and that the technical quality of the sections built by subcontractors is as good as could have been hoped for.

"In fact, when we mated the wings 10 days ago, the left wing, when we mated it up, was ten-thousandths of an inch out of alignment, and we have never had an airplane any closer than that, until we mated the right wing, which was right on the money," Mr. Carson said Monday.

Vought builds some of the 787's fuselage sections, and chief executive Elmer Doty said before the show that the company has had some problems getting components on time from its suppliers.

"That's just a fact of life on a start-up program," he said.

Mr. Doty said the company is spending extra money to have those parts shipped faster to South Carolina, where the assembly is done.

Mike Bair, general manager of the 787 program at Boeing, said Tuesday that Vought's performance is improving.

"I think they're going to be OK," he said. "They have had struggles, as has everybody. I don't think it's surprising. If we weren't stressed to some degree, I'd argue that we hadn't made the targets aggressive enough.

"Vought is starting to clean up," Mr. Bair added. "They've got some issues, and we're working closely with them. I'm confident that they're going to be just fine."

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