Boeing to Announce Further 787 Delay: ReportBy Reuters - | Posted 2008-01-15 Print
Boeing Co is close to announcing a further delay to its 787 Dreamliner, The Wall Street Journal reported, threatening to push deliveries of the new, hot-selling plane even further back and increasing the risk of costly penalty payments to airlines.NEW YORKBoeing Co is close to announcing a further delay to its 787 Dreamliner, The Wall Street Journal reported on Tuesday, threatening to push deliveries of the new, hot-selling plane even further back and increasing the risk of costly penalty payments to airlines.
Boeing's stock fell more than 4 percent to its lowest since September 2006, adding to the decline in the Dow Jones industrial average .DJI. The stock has now fallen 28 percent from the all-time high last July, when hopes for Boeing's latest fuel-efficient, long-haul aircraft were strongest.
The carbon-fiber, wide-body plane which is the most successful launch in Boeing's history is already six months behind schedule due to problems with suppliers and parts shortages.
The Chicago-based plane maker "continues to experience problems on a variety of fronts," according to the Journal report, threatening to push back the first test flight to June from the current end-March target. The plane was originally slated for first test flight last August.
Any further delay would likely make it impossible for Boeing to hit its target of 109 deliveries by the end of 2009, the Journal reported, which would eat into expected revenue.
Boeing's spokeswoman for the 787 program did not immediately return a call seeking comment. Last week, Boeing would not confirm or deny a blog report the plane was three weeks behind schedule.
Boeing has taken orders for 817 Dreamliners from 53 airlines and leasing firms, worth $135 billion at list prices. Industry analysts generally believe Boeing's new plane will ultimately be successful, but have grown wary of faltering progress in building it.
"Investors are likely to require clear signs that this is the last of the delays, which will take some months to prove out," said Morgan Stanley analyst Heidi Wood, in a research note.
Boeing's shares closed down $3.81, or 4.7 percent, at $77.86. The stock touched $76 at one point, a fall of 6.9 percent, marking its biggest one-day fall since August 2002.
Talk of more delays on the program have been circulating for some weeks in the industry, which witnessed similar spiraling delays on rival Airbus' A380 superjumbo.
Last week FlightBlogger, a respected blog run by aviation enthusiast Jon Ostrower, reported that the 787 was facing a further three-week delay. FlightBlogger was the first to report on delays on the 787 last summer, long before Boeing admitted it was having problems.
A new delay would be an embarrassing blow for Boeing, which only last month insisted the 787 was on track to meet its revised schedule. In October, Boeing put back first delivery of the plane by at least six months due to production problems.
(Reporting by Bill Rigby; Editing by Carol Bishopric/Andre Grenon)
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