Boeing to announce B787 delay: Hoping dreams won't turn to nightmares
Boeing’s B787 Dreamliner test flight is likely to be delayed until Jun-08, according to reports from Seattle. The B787, the most successful pre-sold aircraft in history, has reportedly continued to suffer software, supplier parts and assembly problems. The new delay would mean the B787 flies almost a year later than originally planned.
Yesterday Boeing shares fell 5% to a 12-month low, with speculation over the expected announcement and concerns about penalty payments, or even order cancellations if delivery times for the B787 slip further (although cancellations are unlikely unless competitor Airbus is able to make alternative capacity available).
Following the Tuesday share price slide, Boeing is expected to make an announcement on the details on Wednesday morning, before US markets open. If the revised first flight timetable for the B787 does slip until Jun-08, completion of the FAA certification process is likely to take until early 2009. Following the original 6-month delay announcement, Boeing had planned to deliver 109 units in 2009, but this now looks likely to slip.
All Nippon Airways is to be the first recipient of the new aircraft, with 50 firm orders for the B787, which was to become a key part of its long term strategy.
Qantas subsidiary, Jetstar, the second scheduled recipient of the Dreamliner, is heavily reliant on the new long haul equipment for the economics of its international strategy. Further pushbacks will also delay the dramatic marketing impact of being the first low cost operator of the B787 Dreamliner. But the LCC can at least continue to use the A330s it is currently operating for its Asian services (the postponement may even prove a blessing for the Qantas Group if the parent is able to deploy some potentially excess A330 and B767ER capacity in the near term).
Japan Airlines and Singapore Airlines are other major buyers of the new aircraft to be affected; for the renewed Air India, the B787 is an important piece in its revival plans and further postponement will not be welcomed.
Boeing meanwhile was cheered yesterday by British Airways’ confirmation of its order for 24 B787s and an increase in Air Pacific's order. In fact, the financial damage to Boeing is likely to be limited by the absence of any equivalent alternative, as the Airbus A350-XWB will not be available until well into the next decade.
Indeed, as global economies slide, some airlines may find solace in the resulting slowdown in entry of new capacity caused by the late B787 and A380 arrivals.