Last updated 4:04PM ET
February 15, 2012
Biz/Tech
Biz/Tech
Costly Delay for Boeing 787
(2009-08-27)
An unfinished Dreamliner in Everett. Photo by Bellamy Pailthorp.
(KPLU) - Boeing is taking a $ 2.5 billion-dollar write-off because of the problems it's had with the new 7-8-7 Dreamliner. When the company announced the new schedule for first flight of the aircraft, it added that the first three test jets cannot be sold to customers.

The first aircraft are pretty much ready to take off - they're now scheduled start test flights before the end of this year. The company has been taxiing planes one and two around runways outside the factory in Everett and simulating flight conditions on the ground. But Boeing has now conceded that the first three planes coming off the assembly line are not commercially viable. So they'll never be sold to an airline. CEO Jim McNierny made the announcement in a conference call with analysts.

"The initial flight test airplanes have no market value beyond the development effort, due to the inordinate amount of rework and modifications made to those planes," he said.

The planes didn't have customers lined up - the first jet to be delivered is # 7, which is to go to Japan's All Nippon Airways. And Boeing says aircraft 4 though 6 could still be sold. But tests have shown fraying of light-weight composite materials where the wings are attached to the side of the first jets. And the patches they're putting in could affect things such as the much-touted fuel efficiency of the aircraft, says aviation analyst Richard Aboulafia. He thinks the first several dozen of the new planes could be sub par.

"I think the biggest question with the 787 program, other than when is it going to fly, is will the aircraft perform as advertised. We know of course that there have been hiccups with the design and when you make modifications to a plane like this that's a very specific point design, you know you're adding weight. And that of course is going to impair economics" he says.

Aboulafia now calls first flight a "show me" story; he'll believe first flight is actually taking place when he sees it.

The new announcement is the sixth schedule Boeing has issued. Airlines have now canceled their orders for 73 of the new jets; Boeing says a few of its customers who needed new planes quickly have switched to other models: 777s and 767s. But with more than 850 orders still on the books, the Dreamliner remains the company's best-selling new jet in its history.

NOTE: this article has been corrected. Orders for 73 787s have been canceled this year so far. The original falsely stated that 73 airlines had canceled orders. We regret the error.

For more information:

Boeing's Announcement: New 787 Schedule and Third-Quarter Charge

Richard Aboulafia's web site




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