Dreamliner stuck in holding pattern
And you thought a six-hour flight delay was bad. Aerospace giant Boeing Co. said Wednesday that it would be six months late delivering its new 787 Dreamliner to airlines.
In an embarrassing setback, Boeing said carriers wouldn’t be able to start flying the highly touted Dreamliner until the end of 2008 instead of next May as originally scheduled. Most carriers won’t see the plane until 2009 or later, Boeing said.
“We’re disappointed we have to announce this delay,” said Jim McNerney, Boeing’s chairman and chief executive, during a conference call with Wall Street analysts. “We wish we didn’t have to do this.”
Boeing’s fortune has been riding high on what has become the fastest-selling passenger jet ever. Built with composite materials, the plane, which seats about 250, promises to be more fuel-efficient and easier to maintain than the current generation of commercial aircraft. With the composite design, passengers are expected to have more comfortable cabins and bigger windows.
Boeing has orders for more than 700 Dreamliners, valued at more than $100 billion.
The delay in deliveries is not expected to have a material effect on Boeing’s finances and will not change its earnings guidance for 2007 and 2008, company executives said.
Still, Wednesday’s disclosure was surprising because Boeing had until just a few days ago adamantly insisted that the plane would be delivered on time despite reports that Boeing was having difficulty resolving lingering production problems.
Wall Street didn’t take the news well, and Boeing shares slid nearly $3 to $98.68 after rising steadily over the last year on booming sales of the new plane.
The delay evoked memories of troubles faced by Boeing’s archrival Airbus as it was developing the A380 superjumbo jet. The world’s largest passenger jet -- capable of seating 525 passengers -- fell two years behind schedule, and instead of flying in 2006 as planned, it will enter commercial service later this month.
The delay cost the European aircraft maker billions of dollars, led to the ouster of its top two executives and roiled relations between France and Germany.
“I certainly don’t think it’ll be two years, but you can’t rule out the possibility of further delays,” said Scott Hamilton, an aviation consultant in Issaquah, Wash. “I know that they are trying to say everything is going to be fine, but it’s really what you don’t know that will kill you.”
But Paul H. Nisbet, an aerospace analyst for JSA Research Inc., said the delay was not likely to be a harbinger of more problems.
“I think the impact is more psychological than technological or financial,” Nisbet said. “It’s not going to hurt that much.”
Boeing executives took great pains Wednesday to explain that the problems were being resolved and that the delay would give them enough time to address any additional problems that might pop up. Much of the delay was prompted by a shortage of fasteners and other parts that are needed to assemble the plane, Boeing said.
Major problems are “largely behind us,” said Scott Carson, head of Boeing’s commercial aircraft business. Moreover, Carson said the delay would give Boeing engineers more leeway in test flights. Because of the supply problems, Boeing was looking at compressing test flights by several months.
“We’ve put some margin back in the flight test program,” Carson said.
Japan’s All Nippon Airways, which ordered 50 Dreamliners and expected to be first to fly the plane in May, said in a statement that it regretted the delay but that it would work closely with Boeing to “keep the impact of the delay to a minimum.” The airline had hoped to fly the Dreamliner for the Beijing Olympics next summer.
Also, 14 other carriers will not get their Dreamliners until 2009 or later as deliveries of 30 to 35 planes slip into 2009, Boeing said.
