787 delays hamper Boeing’s schedules

EVERETT — A year ago, there were whispers about a delay.

Back then, the setback involved Airbus and the delivery of its A380 superjumbo jet. During the past weeks, tales of a new delay surfaced, this time surrounding the Boeing Co. and the first flight of its 787 Dreamliner.

Delays involving new aircraft programs are nothing new. Investors demonstrated their understanding of this when Boeing’s stock took only a moderate dip following the annoucement of the delay and bounced back fully within 48 hours.

On Wednesday, Boeing pushed back the Dreamliner’s first flight to the mid-November to mid-December time frame. The setback means Boeing has even less time than anticipated to complete its flight testing program, which already was shorter than any previous flight test for Boeing.

Scott Carson, president of Boeing Commercial Airplanes, attributed part of Boeing’s 787 delay to troubles with the plane’s software system. The company is working with supplier Honeywell to finish writing code for the flight control system.

“They had software issues with the 747-400 as well,” said Scott Hamilton, an analyst with Leeham Co.

In that case, back in the late 1980s, Boeing had to push out deliveries of the plane to Northwest Airlines.

The Chicago-based planemaker also had difficulties delivering its Next Generation 737s, noted Paul Nisbet, an analyst with JSA Research in Rhode Island.

With the Renton-built 737 program, Boeing promised too much, too soon.

“They tried to triple the rate of production while dramatically changing the production line,” Nisbet said. “That was the worst snafu on a new aircraft.”

Last week, Boeing went public with a three- to four-month delay in the first flight of its 787 Dreamliner. Originally, the company had floated a late-August date for the plane’s maiden voyage. As the year progressed, however, that date slid into the September to October time frame.

If Boeing announces another significant delay a few months down the line, the company risks losing investor and customer confidence.

“It’s a slippery slope,” Nisbet said.

Airbus found that out over the last few years in dealing with setbacks to its A380 program. The European planemaker tended to dole out announcements of delays, forcing Airbus to come forward again and again with setback announcements.

“The bad news wasn’t reflective of how bad it was,” Hamilton said

In June 2006, Airbus came forward with a six-month delay to its superjumbo jet program. By September, a minority shareholder in Airbus’ parent company, European Aeronautic Defence and Space Co., said it anticipated further setbacks to the A380. Last October, Airbus acknowledged that deliveries of its new jet would be delayed on average two years.

“It took Airbus a long time to admit how bad their delay was,” Nisbet said.

Hamilton compliments Boeing for dealing with rumors about 787 delays. The aerospace company may not have all the skeptics, including Hamilton, convinced it can meet its May 2008 delivery commitment to Japan’s All Nippon Airways. However, Boeing headed off tales of even lengthier delays and gave some detail about the problems the 787 is facing and how the company will address those issues.

“They’re taking a different approach” than rival Airbus, Hamilton said.

By mid-December, the world will know whether that approach yields better results.

Reporter Michelle Dunlop: 425-339-3454 or mdunlop@heraldnet.com

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