Boeing delays 787 debut due to supply-chain and assembly problems

CHICAGO " The Boeing Co. delayed its 787 jetliner program again Tuesday, pushing back its expected debut in commercial service to the third quarter of 2009 as it continues to grapple with problems involving its supply chain and the need to redo some outside work.

The plane's first flight, originally targeted for last year, now isn't expected to take place until the fourth quarter of this year as Boeing builds more time into the schedule to reduce the risk of further delays on the program.

The fourth delay with the 787, coming less than three months after the last one, further undermines Boeing's credibility on the much-hyped program and also is a setback to the more than 50 airlines that have placed about 900 orders for the top-selling plane. Buyers are likely to seek compensation for the delays.

The twin-engine widebody will be the first jetliner made largely of carbon-fiber plastic, which Boeing says will save fuel and be cheaper to maintain. But schedule delays with new jets are not uncommon, and Boeing also has had difficulties with a program that leans unusually heavily on overseas suppliers.

The Chicago-based company had said its goal was to send the 787 on its first flight by the end of June, and deliver the first plane to All Nippon Airways in early 2009. However, after announcing a third major delay in the 787 program in January, it reviewed the schedule once again.

The company said that while significant progress has been made assembling the first airplane, it is rescheduling the first flight "due to slower-than-expected completion of work that traveled from supplier facilities into Boeing's final assembly line, unanticipated rework and the addition of margin into the testing schedule."

Boeing said it now anticipates delivering a total of 25 of the new airplanes in 2009.

"Over the past few months, we have taken strong actions to confront and overcome start-up issues on the program, and we have made solid progress," said Scott Carson, president and CEO of Boeing's Seattle-based commercial airplanes unit. "Nevertheless, the traveled work situation and some unanticipated rework have prevented us from hitting the milestones we laid out in January."

The company said research and development costs will likely increase because of the latest delay but it expects no change to 2008 earnings guidance. It said it will disclose more details when it reports first-quarter earnings on April 23.

Analysts and customers had been expecting the latest delays. European rival Airbus saw delays of 18 months for its A380.

Boeing shares rose $1.27, or 1.7 percent, to $76.33 in premarket trading.


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