The first Boeing 787 Dreamliner, which is more than two years behind schedule, should fly by year's end, and the first of the largely composite jets will be delivered to All Nippon Airways by the end of 2010, the company announced Thursday.
Boeing Co. also intends to take a pretax charge of $2.5 billion, or $2.21 a share, for the repeatedly delayed jet. The Chicago-based aerospace manufacturer is writing off the value of the first three Dreamliners it makes after determining there were no takers for planes that are tons overweight and that bear a patchwork of structural fixes.
The news cheered investors, who had feared that even lengthier delays would bedevil the Dreamliner. Boeing shares rose 8% on Thursday to close at $51.82.
Analysts were relieved that Boeing had finally revealed how production of the plane would be affected by structural issues that were disclosed in June, just days before the jet was to take its first flight.
But they will continue to be skeptical until the groundbreaking plane is finally certified for flight.
"Full speed ahead just don't mean very much," said Richard Aboulafia, aerospace analyst with Teal Group, a Virginia-based market research firm. "But it sure beats them not having dealt with that particular problem."
Dreamliners were supposed to be rolling out of Boeing's factory in Everett, Wash., at the rate of two a week by now. Instead, Boeing is putting the finishing touches on its first few planes, the result of a long string of embarrassing glitches.
Officials vastly underestimated the challenge involved in creating an all-new aircraft while simultaneously adopting a new means of manufacturing that placed most of the 787's development in the hands of subcontractors, analysts said.
The delays have cost Boeing much of the five-year lead it once held over rival Airbus, which also is developing a largely composite plane.
The delays also have increased the pressure on Boeing Chief Executive Jim McNerney to get the program back on track.
McNerney assured analysts and reporters Thursday that despite the 787's "challenges," the plane "remains on track to be a true game-changer for our airline customers."
One party that wasn't cheering Boeing's announcement was launch customer All Nippon Airways, which once had planned to showcase its first Dreamliners at the 2008 Beijing Olympics. The Japan-based carrier said Thursday that the "length of this further delay is a source of great dismay, not to say frustration."
Boeing said the first two 787s were ready to fly but were awaiting new fittings to fix a structural flaw discovered this spring. As engineers tested the strength of the 787's wings, that stress caused the composite frame to tear in a handful of areas where the wing is joined to the aircraft body.
The company said it had completed initial testing on a fix and planned to begin reinforcing its jets within the next few weeks. A source close to the program said the plane's first flight, an important milestone, would probably occur around the end of November.
Boeing said it aimed to make 10 Dreamliners a month by 2013 and was moving ahead with plans to open a second assembly line to speed manufacturing.
Boeing plans to decide by the end of the year whether the line will be based in Washington state or South Carolina, where the company recently purchased facilities from Vought Aircraft Industries.