Boeing 787 won't fly for at least several weeks

Boeing 787 won't fly for at least several weeks »Play Video
Boeing Co. has again delayed the first test flight of its long-awaited 787 jetliner, a hot-selling aircraft seen as pivotal for the company and the way it builds airplanes in the future.

The Chicago-based aerospace giant said Tuesday it needs to reinforce small areas near the connection of the wings and fuselage before conducting the test flight, which Boeing had insisted would occur before July. A revised schedule for the flight, as well as first deliveries to customers, will not be announced for several weeks.

The announcement comes as Boeing, the world's second-largest commercial airplane maker, and European archrival Airbus SA grapple with slumping orders for their jets as the recession dampens demand for air travel and cargo services. Tight credit markets also have muted orders for new planes.

Deliveries of the long-range widebody have been delayed four times already. Customers had expected to get the first of the new jets in the first quarter of 2010 - nearly two years behind schedule. Some 58 orders have been canceled this year. The delays have cost Boeing credibility and billions of dollars in anticipated expenses and penalties.

Shares of Boeing slid 2 cents to $43.85 in after-hours trading. During the regular session, they tumbled $3.03, or 6.5 percent, to close at $43.87.

Boeing said it discovered areas around the part of the plane where the wings join the fuselage that need to be reinforced during recent tests on the airplanes.

Scott Fancher, Boeing's 787 program manager, said the 36 areas - 18 on each side - cover about 1 to 2 square inches each.

"We're talking about a relatively small number of parts and a relatively simple modification here, and we are designing it so the parts can be installed in fully assembled aircraft," he said in a conference call. "We are already moving toward a solution."

During a test late last month that involved bending the 787's wings to simulate flight conditions, workers discovered greater-than-expected stress in the plane's so-called side-of-body structure, according to Pat Shanahan, vice president and general manager of airplane programs for Boeing's commercial airplane division. Further tests completed late last week showed the plane needed structural reinforcement before it could be flown, he said.

The 787 is the first commercial jet made mostly of light, sturdy carbon-fiber composites instead of aluminum. Large parts of the plane, such as the fuselage sections and wings, are made in factories around the world and flown in a huge modified 747 to Boeing's widebody plant in the Seattle area, where they are essentially snapped together.

The plane's wings are made by Japan's Mitsubishi Heavy Industries and the side-of-body structure by Fuji Heavy Industries, also of Japan. The design of that part of the aircraft has been handled by the two companies along with Boeing.

"This is a structural reinforcement issue, not an issue of materials or workmanship," Shanahan said. "Composites are the right choice for airplane structure."

He added: "We will correct this situation and do so with both care and urgency."

Boeing has made delivery of the plane its top strategic priority as it faces dwindling orders due to the global economic slowdown. CEO Jim McNerney has called the 787 the biggest advance in commercial aviation since the start of the jet age.

"Boeing was counting on the 787 to transform the company, and not only just for its own sake but also to be the pattern for future airplanes," said Scott Hamilton, managing director and founder of Leeham Co. "So it's huge for the company."

Airbus, owned by European Aeronautic Defence & Space Co., dealt with two years of delays on its superjumbo A380, but Hamilton noted those were prompted by software compatibility problems, whereas "this is about new materials, new production."

The 787 production team will continue testing the airplane, performing tests such as low-speed taxiing, Boeing said. Work also will continue on five other test planes and other 787s in the production system, it said.

The 787 is Boeing's first new aircraft since the 777, which was introduced more than a decade ago. Airlines around the world have ordered the 787 in record numbers, and Boeing currently has orders for 866 of the planes from at least 56 customers. Japan's All Nippon Airways Co. is slated to receive the first of the new planes.

A spokesman for the carrier, Rob Henderson, said in a statement Tuesday that ANA was disappointed about the latest 787 delay and urged Boeing "to specify the schedule for the program as a whole as quickly as possible."

Boeing said its financial guidance will be updated to reflect any impact from the changes when the company issues its second quarter 2009 earnings report in July.

Boeing recently cut its 20-year forecast for the commercial airplane market for the first time in at least a decade, citing the global recession and other factors. Its defense business, which accounts for roughly half its revenue, hopes to make up for lagging commercial sales and weakening U.S. military sales through rising international exports.

Boeing executives, meanwhile, have said the company is cushioned by an order backlog of more than 3,500 planes.

Paul Nisbet, an analyst at JSA Research, said the latest announcement about the 787 was "not good news," and that Boeing had said at the Paris Air Show just days ago that the plane was ready to fly.

"I don't think it means much overall, but it certainly is a disappointment short-term," he said.