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<< Previous   of   Next >> (click to enlarge) Michael O'Leary / The Herald  (click to enlarge) Catherine Dwight installs some of the wiring needed in the cargo hold of a Boeing 767 being assembled in Everett. The 767 line got a boost in 2007 when UPS ordered 27 cargo versions of the jet.   ADVERTISEMENT   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Monday, May 12, 2008 New life for Boeing 767 despite failed tanker deal Losing the Air Force tanker contract doesn't doom the jet, since delays in the 787 program prompt airlines to eye the 767 to fill the gap By Michelle Dunlop Herald Writer EVERETT -- Take a look at the Boeing Co.'s order book, and you'll find one fat zero among a healthy list of figures. More than 14 months have passed since Boeing last captured an order for its commercial 767 jet, which is assembled in Everett. The "mighty" 767's backlog shows only 49 unfilled orders for the jet remaining. But don't let the numbers -- or lack of orders -- fool you into thinking the 767's future is dim, analysts say. For several years, the 767's fate seemed tied to Boeing's ability to secure a contract to supply the U.S. Air Force with aerial refueling tankers based on the commercial 767 jet. The company lost that contract this February but has protested the Air Force's decision. A review of the contract is expected in June. Yet analyst Scott Hamilton, with Leeham Co., believes Boeing's defense loss is the company's commercial gain as Boeing tries to appease airlines waiting for its delayed 787 Dreamliner jet. "I think, in many respects, Boeing is in a better position having lost the tanker contract because it frees up a lot of capacity," Hamilton said. Last year, the 767 enjoyed a resurgence, winning 36 new requests during the first two months of 2007. Chile's LAN Airlines placed an order for three 767 passenger planes in January 2007. UPS gave the 767 its biggest boost of confidence with an order for 27 767-300 freighters. DHL also put in a request for six 767 freighters on Feb. 23, 2007, the date of the aircraft's last order. Boeing has delayed the first delivery of its 787 Dreamliner by as much as 15 months, from May 2008 to the third quarter of 2009. Dreamliner customers, such as Air Canada, are bracing for delivery delays by as much as 30 months. That's because Boeing had expected to ramp up production on the 787 to a 10-Dreamliner-per-month pace within a few years of the first delivery. At its latest 787 briefing in April, Boeing officials predicted they won't hit the 10-aircraft-per-month milestone until 2012. As delays pile up, Dreamliner customers have only limited options as they look for aircraft to tide them over until their 787 orders are ready. Last week, the chief executive of Qatar Airlines, which has 30 787s on order, said the carrier not only would seek compensation from Boeing for delays but also would seek delivery of 777s it has on option. Boeing's larger 777 aircraft are in higher demand and, therefore, have a longer lead time than 767s. Although Boeing hasn't seen a 767 order for more than a year, as recently as last month, company officials have said they continue to see interest in the jet. At the 767's height of production in 1992, Boeing delivered 63 of the aircraft. Boeing had slowed down production rates on the 767 after the terrorist attacks of Sept. 11, 2001. In 2006 and 2007, the company handed over just 12 767s each year. "Boeing is out there scouring for any interim lift," Hamilton said. Hamilton says it will take Boeing until 2010 to get its 767 supplier base in line to increase production. That's still two years before the company will be up to speed on the 787, if Boeing hits no additional delays. "We are seeing a lot of demand, including for the 767, where we can't in all cases meet our customers' desired positions," said Boeing's spokeswoman, Leslie Hazzard, in an e-mailed statement. "In many areas, including the 767, we may look at increasing rates to support our customers. However, we don't publicly discuss production rates of any program, either current or future, or our lead times." Rather than ordering a 767, airlines may look to lease one through Boeing. As of last Thursday, Boeing listed no available 767s for lease through the company, according to its Web site. However, 11 767s were up for lease from other companies. Reporter Michelle Dunlop: 425-339-3454 or mdunlop@heraldnet.com.

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