Boeing Co. (BA) said Wednesday that it doesn't expect any order
cancellations for its 787 Dreamliner passenger jet from its Asia
Pacific customers after the company postponed for the fourth time
the plane's first flight because of structural problems.
"We had some cancellations in the past because of the economic
downturn, but I don't see any tied to this issue," Yvonne Leach, a
Boeing spokeswoman for the 787 told Dow Jones Newswires.
Asia Pacific Airlines contacted by Dow Jones expressed concern
over the latest delay of the aircraft but gave no indication about
order cancellations.
Leach said that Boeing is in talks with the Asia-based airlines
that have ordered the 787 regarding compensation, but declined to
say how much this would cost the company.
The 787's first flight was supposed to take place next week, but
engineers decided to push it back because unexpected stresses
recently discovered would affect the aircraft's
maneuverability.
No new date for the first flight or the plane's delivery dates
were given. Boeing has more that 800 Dreamliners on order and
Japan's All Nippon Airways (9202.TO) is the launch customer. The
carrier was supposed to get its first 787 in the first quarter of
2010.
"I can't speculate on the first flight or the new delivery
schedule...this is a design issue. It's not going to be a huge
setback, it's literally a handful of parts that we need to design
and put on the plane. It's a manageable problem."
"But the engineers have to go back and figure out a solution.
Once they have it we will have to go through the whole process -
design, fabricate the parts and test them. It could be time
consuming," she added.
She said engineers will take several weeks to assess the problem
and only then Boeing will announce a new date for the first flight
and a new delivery schedule.
She also said that a second 787 production line was being
considered by Boeing to speed up deliveries "but no decision has
been taken."
A senior engineer with an Asian airline which has ordered the
787 said the latest setback could take months to resolve.
"There is no guidance from Boeing and it's difficult to say how
long it will take. Boeing is very good with design issues and they
will come up with a solution. But if new parts have to be designed
and tested, I would say months rather than weeks," he said.
Leach believes the 787's setbacks, which is almost two years
late, won't prompt airlines to switch to the Airbus A350, the 787's
main competitor whose first delivery is scheduled for 2014.
"The customers with a long-term view will stay with us," she
said.
Derek Sadubin, chief operating officer of Centre for Asia
Pacific Aviation, a Sydney based think tank, said Asian carriers
will have mixed feelings about the latest delay.
Carriers like those in India and airlines with weak balance
sheets will not be too concerned, but others that need the plane
for a competitive advantage like ANA and some Chinese carriers will
be quite concerned, he said.
"Some will be quite relieved as they can defer there capital
expenditure plans till market conditions improve. But if fuel
prices start rising, the 787 becomes an efficient machine that
airlines will need," he said.
"But the main game for Asia-Pacific airlines at the moment is to
preserve cash," Sadubin added.
Apart from ANA, Asia Pacific customers of the 787, include
Singapore Airlines, Japan Airlines, Qantas, Air New Zealand, Korean
Air and major Chinese and Indian airlines.
ANA said in a statement that it was "disappointed that the first
flight of the 787 would be postponed, and urge Boeing to specify
the schedule for the program as soon as possible."
ANA also said that it will continue talks with Boeing on
compensation for the delays including the latest one, and that it
will probably seek to reduce the purchase price of the new jet as
compensation.
A spokesman at Japan Airlines Corp. (9205.TO) said there is no
change in its order for 35 787 jets with an option to buy 20
additional airplanes, and doesn't know yet how long they have to
wait because of the latest delay.
Singapore Airlines Ltd. (CAL.SG) said it has not been informed
by Boeing of any change to the delivery schedule. The carrier has
ordered 20 787s and the first delivery is scheduled for 2013.
Qantas Airways Ltd. (QAN.AU) said it remains confident that it
can meet its timetable for deploying the Dreamliner.
Qantas is "finalizing" its review of its expected 787
deliveries, having firm orders for 65 of the aircraft and rights
for an additional 50, Qantas spokesman Simon Rushton said. It was
expecting its first delivery in "mid 2010."
"We are disappointed with this news and were advised of the
development by Boeing overnight," Rushton said.
"We are confident that we can still meet our proposed
timetable," he said.
New Zealand Ltd. (AIR.NZ) also said that it was disappointed by
news of the delay and was awaiting advice from Boeing if it would
affect the delivery schedule. The carrier is the launch customer of
the 787-9 aircraft and has eight panes on order with the first
delivery set in early 2013.
Korean Air Co. Ltd (003490.SE) said it has received no official
delay notice from Boeing for its 10 B787 Dreamliners - four slated
to arrive in 2011 and six later.
India's Jet Airways (532617.BY) said it doesn't expect any delay
in the delivery of its 10 787s on order.
"Our delivery dates are far off," Wolfgang Prock-Schauer, Jet's
chief executive, told Dow Jones Newswires by phone. "Boeing might
come on track with their delivery schedule. We do not foresee any
delay in delivery of the planes," he said.
Jet is scheduled to get its first delivery in 2011.
Chinese Airlines - Air China (0753.HK) with 15 Dreamliners on
order, China Southern (1055.HK) with 10 and others like China
Eastern (CEA), and Hainan Airlines - were not immediately available
for comment.
-By Costas Paris, Dow Jones Newswires; 65 6415 4153;
costas.paris@dowjones.com
(Patricia Ho, Jo, Kyong-Ae Choi, Iain Mcdonald, Simon Louisson,
Santanu Choudhury and Yoshio Takahashi and P.R. Venkat contributed
to this article.)
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