Boeing: Jets in the pipeline are a plus

EVERETT — Jet orders ran cold for the Boeing Co. during January, with two airlines cancelling orders for a total of 31 787s.

But company executives remain confident in Boeing’s ability to weather the brewing storm of cancellations and order deferrals that 2009 seems poised to deliver.

“We are well-positioned in these uncertain times,” said James Bell, Boeing’s chief financial officer, at a conference Thursday.

Boeing’s robust backlog of roughly 3,700 unfilled jet orders allows the company the flexibility to accommodate airlines’ requests to push out or cancel aircraft deliveries, Bell said. With a cancellation for 16 of its delayed 787s posted Thursday, Boeing has received 13 more cancellations than it has received orders so far this year. That’s down from last January, when the company took in 65 net orders, including requests for 40 Dreamliners.

But Boeing will hold its production rates steady into 2010 unless the company sees a dramatic upswing in deferrals and cancellations, Bell said. The Chicago-based aerospace company is overbooked on orders, particularly for its 737, for 2009, giving it breathing room for managing delivery deferrals. That changes in 2010, however, when Boeing may have some open positions in its order books, Bell said.

In 2009, Boeing has taken in orders for 18 of its single-aisle 737s — 13 from Ryanair and five from Southwest Airlines. Last week, Boeing revealed that Russian carrier S7 canceled a $2.4 billion deal for 15 787. On Thursday, Fakher Daghestani, Boeing’s communications manager in the Middle East, said by phone that Dubai-based leasing company, LCAL, cut its order for the model to five planes from 21.

Daghestani said the cancellations had nothing to do with delays that have plagued the 787’s development. Rather, he said the leasing company is “preparing for tough challenges caused by the growing global recession.”

The company formed with the specific goal of buying and leasing 787s.

Boeing has fallen nearly two years behind schedule delivering its fuel-efficient, mostly composite jet. Parts shortages and production problems have led to a series of embarrassing delays in the program. Boeing’s latest schedule has the company putting the jet into flight by June and delivering the first 787 in early 2010.

“Despite a modest amount of order churn, we remain confident in this aircraft,” Bell said Thursday.

Last month, Boeing delivered 35 aircraft — one more than the previous January. The company’s jet production line was frozen last fall during a 57-day Machinists strike. Between the strike, parts shortages and 787 delays, Boeing delivered roughly 100 fewer jets in 2008 than initially planned.

The Machinists strike also cost Boeing supplier Spirit AeroSystems about $500 million in income last year, the company said Thursday. Kansas-based Spirit saw its fourth-quarter income drop 74 percent compared with the same time in 2007.

“We are working closely with our customers and monitoring developments across the industry as we look forward into 2009 and beyond,” said Jeff Turner, Spirit’s chief executive.

Spirit’s shares closed down 3.6 percent at $12.98. Boeing’s stock rose 1.7 percent to close Thursday at $42.69.

The Associated Press contributed to this report.

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