Dreamliner delays threaten Boeing’s other programs

  • By Michelle Dunlop Herald Writer
  • Sunday, October 28, 2007 11:02pm
  • Business

EVERETT — It’s not just the Dreamliner that could be affected by the six-month setback to the Boeing Co.’s 787 commercial jet program.

During the company’s third-quarter earnings call last week, Boeing’s chief executive, Jim McNerney, downplayed rumors that the Dreamliner delay may disrupt its other plane programs. Besides its 787, Boeing also is developing the 747-8 as well as its 777 Freighter. The latter might be where things get messy for Boeing.

Earlier this month, Boeing pushed back the delivery of its first 787 until November or December 2008. The 777 Freighter also is expected to enter service in the fourth quarter of 2008.

“That is the only potential conflict that I see,” McNerney said.

Local analyst Scott Hamilton, of Leeham Co., questions whether Boeing can pull off two separate test flight program simultaneously. Minus any further delays, the Dreamliner should make its maiden flight by the end of March — a feat that kicks off the 787’s flight certification program.

When Boeing initially pushed back the 787’s first flight to mid-November of this year, the company said it would fly Dreamliners around the clock to log in enough hours to meet certification demands. At the time, Boeing intended to manage its test planes and test flight pilots like an airline.

The more recently announced six-month delay created a little more cushion for the jet maker, McNerney said. While the new schedule may give Boeing time to fix whatever hiccups crop up in 787 flight tests, it also could create new headaches, Hamilton suggests.

The company will have to juggle test pilots to keep both the 777 Freighter and the 787-8 in the air. Boeing is expected to deliver the first 787 to Japan’s All Nippon Airways and the first 777 Freighter to Air France in late 2008.

Boeing may be forced to make some tough choices.

With more than 700 orders to date, Boeing has a lot riding on its 787. Dreamliner customers who receive their 787s late can seek compensation from the aerospace company, though those claims aren’t expected to have a significant financial impact on Boeing.

But Boeing won’t want to let down its cargo customers either.

For decades, Boeing basically monopolized the cargo business. The company says its freighters account for roughly 90 percent of worldwide freighter capacity. The 777 Freighter has received more than 80 orders since its launch in 2005.

Just this year, Airbus finalized its A330-200 Freighter, a slightly smaller competitor to the 777. Airbus’ new cargo plane snagged 66 orders in the first nine months of the year and will enter service a year later than Boeing’s 777 Freighter.

With a year separating the two freighters’ delivery, customers aren’t likely to flock to Airbus if Boeing suffers a minor delay on its 777 Freighter, Hamilton said. But a delay in another jet program could create an even bigger problem for Boeing — one of credibility.

Further delays to the 787 or a 777 Freighter setback would raise concerns about the schedule of Boeing’s 747-8. Last week, McNerney assured investors that the 747-8, an updated version of Boeing’s jumbo jet that uses Dreamliner technology, remains on track. Boeing’s chief executive acknowledged that engineers had remained on the 787 program when they were expected to start work on the 747-8. However, he said, a company of Boeing’s size can move engineers from project to project without suffering severe shortages.

Boeing broke tradition with its revamped 747, launching the freighter version first. The cargo plane, which has won more than 60 orders, is scheduled to enter service by the end of 2009.

Reporter Michelle Dunlop: 425-339-3454 or mdunlop@heraldnet.com. For more on aerospace, visit reporter Michelle Dunlop’s blog at heraldnet.com.

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