28-Aug-2009 8:57 AM

Boeing announces new B787 schedule and USD2.5 billion charge for 3Q2009

Boeing announced (27-Aug-2009) the first flight of the B787 is expected by the end of 2009 and first delivery is expected to occur in 4Q2010. The new schedule reflects the previously announced need to reinforce an area within the side-of-body section of the aircraft, along with the addition of several weeks of schedule margin to reduce flight test and certification risk. The company projects achieving a production rate of 10 aircraft per month in late 2013. Based on the revised schedule and other assumption updates, the company has determined that the B787 programme is not in a forward-loss position. However, costs previously recorded for the first three flight-test aircraft will be reclassified from programme inventory to an R&D expense, resulting in an estimated non-cash charge of USD2.5 billion pre-tax, against 3Q2009 results [more - Boeing]

All Nippon Airways, the launch customer for the aircraft, stated that the “length of this further delay is a source of great dismay, not to say frustration”. [more ANA]

Boeing India stated it would assess Air India’s compensation demands for the delays once the B787 is ready for commercial operation (Economic Times, 28-Aug-2009). The carrier has reportedly claimed USD700 million in compensation from Boeing. Air India is also seeking to defer the delivery of six B777s, for delivery over 2010 and 2011, and will incur a contract penalty.  

Qantas CEO, Alan Joyce, stated the new was frustrating, but not unexpected and the carrier will know more in the next few months regarding its B787 deliveries (Dow Jones, 28-Aug-2009)

Virgin Atlantic stated it was “very disappointed at this latest setback to Boeing's 787 program and await to hear what implications this will have for our first deliveries, currently scheduled for mid-2013," (Bloomberg, 27-Aug-2009).

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