Boeing 787 Further Delayed

On 9 April, Boeing announced a “revised plan for first flight and initial deliveries of the 787 Dreamliner that includes [an] additional scheduled ‘margin’ to reduce risk of further delays on the programme.”

The company said that it has made significant progress in assembling the first aircraft, but added that delays by suppliers and unanticipated rework (of externally supplied components) have necessitated the latest “revision” to flight test and delivery dates, and the incorporation of an additional “margin” into the testing schedule. The latest revised schedule now plans for approximately 25 deliveries in 2009.

The first flight of the 787 is now expected to be in the fourth quarter of this year rather than the end of the second quarter, and first delivery is now planned for the third quarter of 2009 instead of the first quarter.

“Over the past few months, we have taken strong actions to confront and overcome start-up issues on the programme, and we have made solid progress,” said Boeing Commercial Airplanes President and CEO Scott Carson. “Nevertheless, the travelled work situation and some unanticipated rework have prevented us from hitting the milestones we laid out in January. Our revised schedule is built upon an achievable, high-confidence plan for getting us to our power-on and first-flight milestones. Also, while the fundamental technologies and design of the 787 remain sound, we have inserted some additional schedule margin for dealing with other issues we may uncover in testing prior to first flight and in the flight test programme.”

In January, the company said it would be conducting a comprehensive assessment of its supply chain and production system capabilities to determine the details of the 787’s flight test programme and initial delivery profile. As a result of that assessment, the latest first-year delivery plan will be followed by a more gradual ramp up to full-rate production than the company had previously planned.

“We deeply regret the disruption and disappointment these changes will cause for our customers, and we will work closely with each of them to minimise the impact,” said Carson. “We have taken significant action to improve supply chain and production system performance, such as our investment in Global Aeronautica, but based on our assessment, the prudent course is to proceed with a more gradual ramp up to full-rate production.”

Pat Shanahan, 787 vice president and programme manager, echoed Carson’s comments about the progress being made in 787 factories.

Shanahan outlined a series of milestones that will occur before June 30 that will track the programme’s progress: 787 static and fatigue structural test aircraft will move to their testing locations; aircraft numbers 3 and 4 will enter final assembly; hardware airworthiness qualifications will be complete; and power on will be achieved.

Shanahan also announced that the 787-9, the larger variant of the aircraft, will be the first derivative of the baseline 787 with delivery planned for early 2012. The 787-3, which is a shorter-range model that was previously slated to deliver in 2010, will now become the second 787 family derivative.

Air New Zealand and Qantas have confirmed they will be seeking financial compensation from Boeing as a result of the newly announced delays to the 787 programme.

Qantas’s CEO Geoff Dixon has said the airline is “very disappointed that Boeing has again delayed the delivery schedule.” However, he said that Qantas had “put in place contingencies to alleviate possible capacity constraints.” Qantas plans to lease six A330s for use by Jetstar that will “provide adequate growth….until the arrival of the Dreamliner.”

Qantas now expects its first 787-8 to arrive 15 months late and its first 787-9 to be delivered 15–23 months late. It said it is “entitled to substantial liquidated damages” under its contract with Boeing and that it would use those funds to offset the cost of lease agreements required to “ensure sufficient capacity for the needs of all our airlines in the coming years.”

Air New Zealand, which originally had expected the first of its eight 787-9s to arrive in late 2010 but now will wait until at least early 2012, said it “will enter into compensation discussions with Boeing” as a result of the delay. According to CFO Rob McDonald, “While disappointed, Air New Zealand has retained sufficient flexibility in its existing portfolio…to ensure no capacity shortfall arises during this period.” However, he added that he was not sure if the airline’s network expansion plans would suffer as a result.

Several other airlines have commented in various press reports. British Airways and Virgin Atlantic Airways have said that they, too, would approach Boeing about compensation, with the latter telling Dow Jones it also will inquire about replacement aircraft. TUI has declined to comment about its plans to seek compensation and has said only that it is talking with Boeing about its revised delivery schedule. Gulf Air has said that its order for 16 aircraft “will not be affected” because of a 2016 delivery date.