UPDATE: Boeing Expects First 787, Jumbo Deliveries Next Month

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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