Boeing official says 787 on track

EVERETT — The Boeing Co. recently batted down rumors of another delay to its 787 Dreamliner program.

“It’s an aggressive schedule but we believe we can do it,” Boeing’s marketing guru Randy Tinseth told reporters while speaking Monday in Australia.

Over the last few days Boeing officials have disputed claims that the company won’t meet its first delivery target of May 2008 to Japan’s All Nippon Airways. But skepticism by industry analysts and others over the Dreamliner drove down Boeing’s stock last week, a trend that continued Monday.

Most industry observers, however, maintain that a minor delay of between three and six months won’t tarnish either Boeing’s reputation or its Dreamliner program.

Lehman Brothers’ Joseph Campbell suggested in a note to investors that Boeing should adjust its 787 program predictions. Due to the tight flight test program and delivery schedule Boeing faces, the company should say “while they hope to stay close to schedule, it is more likely that the program could slip by four to six months,” Campbell wrote.

He also thought it appropriate for Boeing to say “that the production ramp-up currently planned may not be achievable.”

Wall Street seemed to give some credence to Campbell’s comments Monday, pushing Boeing’s stock as low as $100.09. But it rebounded to close at $101.07, down $1.18 for the day.

On Sept. 5, Boeing officials confirmed rumors about a delay in the 787’s flight test program while reaffirming its May 2008 first delivery. Mike Bair, who leads the 787 program, pointed to problems with the plane’s flight control software and a shortage of fasteners as the reason for the delay. Bair pegged the first flight for the mid-November to mid-December time frame.

“We don’t see a high probability — or even a low probability — of it moving out of the year,” Bair said.

By pushing back the first flight, Boeing made its already condensed flight test period even shorter. As a result, Bair said, if Boeing finds an issue with the 787 during flight test, “we’re rapidly running out of time to deal with something big.”

Scott Carson, who heads the Commercial Airplanes division, noted that even a delivery delay of one to three months would have “minimal financial impact” on Boeing in 2008.

Despite acknowledging that it essentially has little to no buffer in order to meet its schedule, Boeing didn’t take a beating back in September on its stock. In fact, Boeing’s stock held steady, gaining slightly to $95.84, the day of the delay announcement and continued to climb throughout the remainder of the month, closing at $106.65 Oct. 1.

And a potential delay hasn’t dampened the popularity of the 787. In the month since Boeing delayed the Dreamliner’s first flight, Boeing has won 787 orders from British Airways, Arik Air and Vietnam Airlines. The 787 has accumulated more than 700 orders since its launch.

As long as Boeing delivers its 787 sometime next summer, “it will still be a strategic victory,” said Richard Aboulafia, analyst with the Teal Group.

Boeing’s troubles on the 787 relate to its new production method, not to a significant design flaw, he said. Boeing pushed off onto several suppliers the responsibility for building major 787 sections like the wings and fuselage. Large Dreamliner assemblies come to Everett for final assembly. Boeing ultimately hopes to assemble one Dreamliner in Everett every three days.

When rival Airbus ran into problems with its A380, the plane maker faced accusations even from airline customers that its superjumbo jet wouldn’t live up to expectations.

With the 787, Aboulafia said, “No one is saying the economics can’t be met or that it has serious weight or design issues.” he said.

For more on aerospace, visit reporter Michelle Dunlop’s blog at heraldnet.com.

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