Boeing Co.’s seventh delay on the 787 Dreamliner means that launch customer All Nippon Airways Co. is set to receive its first plane in the third quarter, more than three years behind schedule.
The timetable announced yesterday reflects the fallout from the Nov. 9 electrical fire on one of the test planes that forced an emergency landing. Chicago-based Boeing suspended Dreamliner flights for six weeks to investigate the incident and redesign some of the jet’s power system.
All Nippon welcomed the move as a “positive step” while noting that the original goal, of May 2008, had long since passed. Boeing’s latest target had been for a first-quarter delivery as it struggled with new materials, parts shortages, redesign work and a greater reliance on suppliers.
“We will be looking to Boeing for assurance that it can meet this latest delivery date,” Yoshifumi Miyake, a spokesman for Tokyo-based All Nippon, said in a telephone interview.
All Nippon will be seeking a new delivery schedule for all 55 of its Dreamliners on order to help the airline, Asia’s largest listed carrier by sales, prepare for the plane’s introduction, he said.
The Dreamliner’s tardy arrival is putting All Nippon through a “hard time,” forcing the carrier to extend the life of some planes and add other aircraft, President Shinichiro Ito said in a Jan. 14 interview.
Penalty Risk
Boeing faces the risk of penalties as airlines get their 787s later than planned and may need to pay advances to suppliers whose contracts call for payment upon delivery of the completed, certified jet. The new first delivery date shouldn’t have a “material impact” on last year’s results, Boeing said yesterday.
The blaze highlighted software flaws, and most investors expected another four- to six-month setback, said analysts such as Peter Arment of Gleacher & Co. Securities in Greenwich, Connecticut.
“This has been factored in now for well over two months,” Arment said in an interview. He recommends buying the company’s shares.
Boeing climbed $2.40, or 3.4 percent, to $72.47 yesterday in New York Stock Exchange composite trading for the biggest advance in the Dow Jones Industrial Average. The stock has gained 19 percent in the past 12 months. All Nippon rose 1 yen, or less than 1 percent, to 306 yen yesterday in Tokyo.
FAA Test Flights
Still ahead is the completion of test flights required for Federal Aviation Administration certification for the Dreamliner to carry passengers. The first revised 787 was allowed to start flying again Dec. 23 for the company’s purposes only, and the first flight toward certification was allowed Jan. 17. Four of the six jets are back in the air and the other two are expected to fly in the next week or so, the company said.
Boeing “restored some margin in the schedule to allow for any additional time that may be needed to complete certification activities,” program General Manager Scott Fancher said in yesterday’s statement. The third-quarter target allows enough time to produce, install and test updated software and new electrical power distribution panels in the jets, he said.
The 787 is the first airliner with a composite-plastic fuselage and wings, instead of aluminum, and it has an all- electric system to save on fuel, using five times as much electricity as a traditional jet.
Software Rewrite
After the November blaze, engineers rewrote part of the software to improve power distribution and altered the design of the panel where the fire started. Boeing has said the incident probably was caused by “foreign debris” in one of the panels, producing a short circuit or electrical arc. The panels are made by United Technologies Corp.’s Hamilton Sundstrand unit.
Investors “have become comfortable (again) that the 787 problems are not a show stopper,” Robert Stallard, an analyst at RBC Capital Markets in New York, said in a note to investors. Stallard, who rates the shares as “outperform,” said he already had projected a third-quarter first delivery.
The 787’s maiden flight was in December 2009. A fleet of six jets is based in Seattle and has been flying around the world in search of various weather conditions for tests required by the FAA for approval to carry passengers.
With 847 advance orders from 56 customers, the 250-seat Dreamliner is Boeing’s fastest-selling new aircraft. It has an average list price of $202 million.
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