New due date for 787
Published 6:03 am Tuesday, January 18, 2011
After seven delays, the Boeing Co. gave a 787 delivery date that Wall Street believed.
The aerospace company’s shares rose $2.40 to $72.47 Tuesday after Boeing announced it would deliver its first Dreamliner in the third quarter of 2011, more than three years late.
“It sounds lik
e an extremely reasonable date,” said Richard Aboulafia, an analyst with the Teal Group.
Analysts have criticized Boeing for previous overly optimistic 787 schedules. Initially, after rolling out its 787 on July, 8, 2007, Boeing said it would deliver the first Dreamliner 10 months later in May 2008. But, after multiple delays, the 787 didn’t end up taking its first flight until December 2009.
Boeing’s new 787 schedule comes after the company halted flight testing of its 787 on Nov. 9. An electrical fire broke out on the company’s second 787, forcing an emergency landing in Laredo, Texas. After six weeks on the ground, Boeing began limited flight tests in late December.
However, only on Monday did Boeing resume flight tests that will count toward the 787 gaining certification from the Federal Aviation Administration. The company can’t begin delivering the 847 Dreamliners it has on order until the FAA gives its approval for the Dreamliner to fly commercially.
“This revised timeline for first delivery accommodates the work we believe remains to be done to complete testing and certification of the 787,” said Scott Fancher, vice president and general manager of the 787 program, in a statement Tuesday.
Prior to the fire, Boeing had expected to deliver the first 787 in February to Japan’s All Nippon Airways. Aviation analysts had predicted a delivery slide of four to six months on average.
On Tuesday, Boeing said its revised schedule gives the company time to produce, install and test updated software and new electrical power distribution panels in the flight test and production airplanes. But that doesn’t mean that Boeing will have finished repair work on all of the 787s the company has built by first delivery, said Lori Gunter, Boeing spokeswoman. The redesigned panels and updated software are needed as a result of the electrical fire.
“We’ve also restored some margin in the schedule to allow for any additional time that may be needed to complete certification activities,” Fancher said.
The third-quarter delivery date looks “refreshingly conservative,” Aboulafia said.
Still, analysts will be listening carefully to what Boeing officials say during the company’s earnings call on Jan. 26. That’s when Boeing is expected to outline some of the 787 deliveries subsequent to the third quarter delivery to Japan’s All Nippon Airways.
After Boeing delivers its first Dreamliner, the company eventually plans to ramp up 787 production to a pace of 10 aircraft monthly. Boeing is opening up a second 787 final assembly line in North Charleston, S.C. to help with that pace.
Boeing said this recent delay won’t affect the company’s 2010 earnings, which Boeing will report next Wednesday.
