The 787 is delayed for the third time — Airbus says HA!

by Grant Martin on

Chicago based airframe manufacturer Boeing announced the third delay to their 787 Dreamliner this week, in a move that many industry analysts have been predicting for several weeks now. I guess things haven’t been coming together as fast as they had expected.

This time around, corporate has put sloppier dates on their milestones so that they can be more flexible on their timing and hopefully won’t miss any further checkpoints — multiple customers are relying on these timetables and it has been well publicized that Boeing often has to pay stiff penalties for being behind.

First flight has thus now been pushed back to the the fourth quarter of this year, with the first delivery scheduled in the third quarter of 2009. CEO Scott Carson boasted about the company’s achievements earlier in the week, conceding, however that “… the traveled 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”

Let’s hope that this schedule is actually achievable.

Could the 787 be delayed again?

by Grant Martin on

The last few months have been a little rough for Boeing. After all but laughing at their rival Airbus for delays related to their A380 program, the Chicago based airframe manufacturer has pushed back the delivery of their new 787 composite aircraft twice, citing supply chain and final construction issues.

Then, earlier this month, Boeing lost a key Department of Defense contract for airborne tankers to the European air and space conglomerate, EADS, in a performance based competition.

Now, some airline analysts are starting to predict another, more significant delay for the embattled aircraft. Construction and integration of the wing box, a critical section on the underbelly that interfaces with the wings, holds fuel and connects to the landing gear, appears to be the source of the issue. Steven Udvar-Hazy, chairman of International Lease Finance Corp, Boeing’s largest customer recently highlighted the problems and referred to the situation as “not pretty”.

This is, however, one opinion from one analyst in the industry. Boeing hasn’t made an official statement on the matter, stating that they’ve been “focused on [their] near-term milestones of power on and first flight”, but Yyvone Leach, their Senior 787 PR contact did proffer this foreshadowing:

“It is normal during the development of a new airplane to discover the need for design enhancements. We are working with our partners to address the need for design changes in some areas. While these changes are not good for final assembly because they are dealing with traveled work at this time, the design changes are not the sole pacing item.”

The program update for media and analysts is scheduled for April 23. Perhaps things will be more transparent by then.

Check out James Wallace’s blog for more info (and speculation).

Looks like the Dreamliner is going to be pushed back again

by Grant Martin on

Several news depots are reporting rumors that Boeing’s new 787 Dreamliner aircraft is going to be delayed by another three months. Right now the airline is “reviewing their schedule” as their stock wildly flounders on the stock market.

The story? Same old supply chain issues. Apparently the airline company, who recently lost a their bid on a hotly contested air tanker order, still can’t manage to get their suppliers in line and their aircraft put together on time.

As an analyst from Goldman Sachs puts it,

“[Boeing] continues to underestimate the amount of work required on the 787. We think Boeing will notify suppliers of new production targets shortly, motivated by the need to keep delivery commitments to airlines.”

I guess designing and building an entirely new airframe takes time. Just look at the problems with the A380 — that was pushed back even further than the 787 (so far). I guess nobody is immune to manufacturing hiccups.

It’s official: the Dreamliner is delayed again

by Grant Martin on

Boeing issued a press release early this morning pushing back the release of the 787 one more time, citing issues with their global supply chain as well as stitching the final aircraft together.

First flight is now scheduled for some time late in the second quarter.

Though several in the airline sector had predicted the delay — after all, this is the first time that an aircraft company has attempted to globalize a supply chain of this magnitude — today’s news still comes as a disappointment to investors and enthusiasts alike, both of whom were looking forward to riding on the aircraft sometime this year.

Hopefully this doesn’t turn into the fiasco that the A380 became and that turned into a major disappointment for EADS. Continue reading for the full press release:
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VERETT, Jan. 16, 2008 — Boeing [NYSE:BA] today announced that first flight of the 787 has been moved from the end of the first quarter of this year to around the end of the second quarter to provide additional time to complete assembly of the first airplane. Deliveries are now expected to begin in early 2009, rather than late 2008.

“The fundamental design and technologies of the 787 remain sound,” said Scott Carson, president and CEO of Boeing Commercial Airplanes. “However, we continue to be challenged by start-up issues in our factory and in our extended global supply-chain.”

Carson said that while solid progress has been made on the assembly of Airplane #1, the rate at which jobs are being completed has not improved sufficiently to maintain the current schedule.

“Our revised schedule is based upon updated assessments from the 787 management team of the progress we have made and the lessons we have learned to date. This includes our experience on the factory floor completing production work on the airplane that was originally intended to be done by our suppliers,” Carson said.

Over the next several weeks, Boeing will be working with its customers and suppliers to assess the specific impacts of the schedule change on the 787’s flight test program and entry into service. This effort will include an assessment of supplier progress in meeting their commitments to deliver more complete assemblies on subsequent airplanes.

“We are deeply disappointed by what this delay means for our customers, and we are committed to working closely with them as we assess the impact on our delivery schedules,” Carson said.

Under 787 Vice President and General Manager Pat Shanahan, who assumed leadership of the 787 program last October, Boeing has provided additional resources to more effectively manage the 787 global supply chain. The company has assembled a team of experienced executives, business managers and planning specialists that will be based at the supplier partners, as well as in its own final assembly facility.

“We have brought together the right skills and leadership from around the company to ensure a successful start-up of our global production system,” said Shanahan. “We have put the people, structure and processes in place to execute our plan and we will take additional steps to strengthen our team if needed. We have made significant progress in reducing parts shortages, improving fastener availability and achieving static and systems test milestones. We are focused on getting the 787 flying, certified and delivered to our customers.”

Boeing’s 2008 financial guidance will be updated with the impact of these changes when the company holds its fourth-quarter 2007 earnings conference call on January 30. There will be no impact from the schedule change on 2007 financial results and the company does not expect the impact on 2008 earnings guidance to be significant. Financial guidance for 2009 now will be provided when the company issues its first quarter 2008 earnings report in late April, which will follow the assessment of the impact of 787 schedule changes. The company continues to expect strong earnings per share growth in 2009. The outlook for the company’s defense business and in-production commercial airplane programs remains very strong.

Boeing will hold a conference call with Scott Carson and Pat Shanahan to discuss the 787 schedule changes today at 11:00 a.m. EST, 8:00 a.m. PST. The call will be accessible by clicking here.

Will Boeing’s 787 release turn into the fiasco that the A380 was?

by Grant Martin on

We all remember the much hyped — and recurring letdowns — that led up to the release of the Airbus A380, the world’s largest passenger jumbo jet now flying over the Southeast Asian skies. It was a roller coaster of a journey, with EADS’s stock wildly galloping across European stock exchanges, investors crying murder and numerous management changes within the embattled airline company.

We all hoped that this wouldn’t happen to Boeing, our domestic and local favorite airplane manufacturer. But as their 787 reaches the critical stage of release vs. delay, more attention has turned to the possibility of further delays and a repeat of the A380 runaround. Indeed as the Wall Street Journal reported earlier, Boeing is close to making another delay announcement, and their 787 may not fly until the middle of this year.

But Boeing has more at stake than EADS. With the fastest selling jet in commercial airline history, the Chicago based company has not only 817 airplanes to deliver but a reputation and integrity to maintain. Investors have faithfully banked on their success and if Boeing balks on their promises there are going to be serious financial ramifications.

Good luck, my friends.