UPDATE: Boeing Expects First 787, Jumbo Deliveries Next Month
August 11 2011 - 1:00PM
Dow Jones News
Boeing Co. (BA) expects U.S. regulators to sign off on its new
787 and 747-8F aircraft this month, paving the way for launch
customers to receive their first planes in September, a senior
executive said Thursday.
The expected entry into service after a series of design and
production delays will see Boeing start to receive revenue from the
twin programs for the first time, though the company has yet to
disclose how much money it expects to make from the first tranche
of 787 Dreamliner orders.
The 747-8 program is already in a forward-loss position and
Boeing has taken a write-down on the revamp of its jumbo jet, while
the Dreamliner is still seen making money despite a three-year
delay in first delivery.
Jim Albaugh, head of the Boeing Commercial Airplanes unit, told
an investor conference that flight testing for the 787 will likely
be completed over the weekend, paving the way for certification by
the U.S. Federal Aviation Administration this month.
The 747-8 has already finished testing, and Albaugh said it will
be delivered to launch customer Cargolux Airlines International SA
in September, the first time Boeing has nailed down a schedule for
a plane that is more than a year late.
All Nippon Airways Co. Ltd. (ALNPY, 9202.TO) expects to receive
the first 787 in late September, inaugurating the plane on a
charter flight from Tokyo to Hong Kong then putting it on domestic
routes.
Albaugh said Boeing's key challenge is to navigate the planned
increase in the production rate of the 787, with the South Carolina
supplier it acquired last year remaining a "pinch point." The
company has cut the number of 787s and 747-8s it plans to deliver
this year to between 25 and 30, nipping 10 planes from the top end
of earlier guidance.
He also said Boeing would look toward revamping its best-selling
777 program "in the next couple of years" and continue work on a
new narrowbody plane that would come into service before 2030.
Boeing's plan to revamp its 737 line with new engines -- rather
than build an all-new aircraft by 2020 -- is seen freeing up
engineering resources that can be deployed to upgrade the 777
widebody, providing a potentially bigger challenge to the rival
A350-1000 from Airbus.
Potential orders for the new 737 -- which has yet to secure
board approval -- are seen lifting Boeing's book-to-build ratio
above one this year, with new deals seen outpacing production.
Boeing's plane backlog of seven years is too long, said Albaugh,
adding that he would like a couple of years where book-to-build is
below one.
The company on Thursday said it had received orders for another
seven 777s from an unnamed customer, taking net deals for all
aircraft types to 268.
-By Doug Cameron, Dow Jones Newswires; 312-750-4135;
doug.cameron@dowjones.com
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