Further Delays hit Boeing's 787 Dreamliner

Boeing has again revised its plan for the first flight and initial deliveries of the 787 Dreamliner that includes additional schedule margin to reduce risk of further delays on the program.

While Boeing claims significant progress has been made assembling Airplane #1, the first flight is being rescheduled due to slower than expected completion of work that traveled from supplier facilities into Boeing's final assembly line, unanticipated rework, and the addition of margin into the testing schedule. The new delivery schedule is based on a more conservative production plan developed with the 787 partner team. That schedule now targets approximately 25 deliveries in 2009.

The first flight of the all-new airplane now moves into the fourth quarter of this year rather than the end of the second quarter, and the first delivery is now planned for the third quarter of 2009 instead of first quarter.

Company officials expressed confidence in the new plan and the steps being taken to accelerate program performance.

"Over the past few months, we have taken strong actions to confront and overcome start-up issues on the program, and we have made solid progress," said Boeing Commercial Airplanes President and CEO Scott Carson. "Nevertheless, 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. Also, while the fundamental technologies and design of the 787 remain sound, we have inserted some additional schedule margin for dealing with other issues we may uncover in testing prior to first flight and in the flight test program."

The company said in January it would be conducting a comprehensive assessment of its supply chain and production system capabilities to determine the details of the 787's flight test program and initial delivery profile. As a result of that assessment, the new first-year delivery plan will be followed by a more gradual ramp up to full-rate production than previously planned.

"We deeply regret the disruption and disappointment these changes will cause for our customers, and we will work closely with each of them to minimize the impact," said Carson. "We have taken significant action to improve supply chain and production system performance, such as our investment in Global Aeronautica, but based on our assessment, the prudent course is to proceed with a more gradual ramp up to full-rate production."

For tracking program progress, a series of milestones are scheduled to occur before June 30: 787 static and fatigue structural test airplanes will move to their testing locations; Airplanes #3 and #4 will enter final assembly; hardware airworthiness qualifications will be complete; and power on will be achieved.

Boeing has also changed the timing of the introduction of two 787 derivatives. The 787-9, a larger variant of the airplane, will be the first derivative of the baseline 787 with delivery planned for early 2012. The 787-3, a shorter-range model previously slated to deliver in 2010, will now become the second derivative of the airplane family.

While research and development costs will likely increase as a result of the 787 schedule change, Boeing said it expects no change to its 2008 earnings guidance.

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