Dreamliner Delays - 787 slips in Production

Boeing (BA) on Oct. 10 issued the following press release:

The Boeing Co. today announced a six-month delay in its planned initial deliveries of the 787 Dreamliner due to continued challenges completing assembly of the first airplanes.

Deliveries of the strong-selling Dreamliner are now slated to begin in late November or December, 2008, vs. an original target of May, 2008. First flight is now anticipated around the end of first quarter 2008.

The company said the financial impact of the delay would not be material to earnings and that its earnings guidance for 2007 and 2008 remained unchanged.

"We are disappointed over the schedule changes that we are announcing today," said Boeing Chairman, President, and Chief Executive Officer Jim McNerney. "Notwithstanding the challenges that we are experiencing in bringing forward this game-changing product, we remain confident in the design of the 787, and in the fundamental innovation and technologies that underpin it."

Early last month Boeing announced a delay in the planned first flight of the 787, citing ongoing challenges with out-of-sequence production work, including parts shortages, and remaining software and systems integration activities. The company also acknowledged increasing risk to the delivery schedule, indicating that the margin to accommodate unexpected issues had been eliminated. The newly revised schedule for first flight and first delivery addresses the production challenges and restores margin for the program to deal with issues that may be uncovered in final ground or flight testing. Boeing also said today that flight control software and systems integration activities are not keeping pace with items in the revised schedule for first flight.