TallDutch
2007-12-10, 04:18 PM
NEW YORK (Reuters) - Boeing faces doubts that it will keep to the revised production schedule for its new 787 Dreamliner, but is not expected to announce further delays on Tuesday, when the project's new manager hosts his first call on the troubled plane.
The revolutionary carbon-fibre aircraft is already at least six months behind schedule, with a very ambitious ramp-up of production planned to meet the demands of the many airlines clamouring to get hold of Boeing's new fuel-efficient plane.
On Tuesday the project's new head, Pat Shanahan, is scheduled to face analyst and media questions in Boeing's latest regular update on the program, which has been struggling with a host of supplier issues and shortages of key components.
Wall Street expects that Boeing will admit that it is still having production problems, but will not delay the target for first delivery of November-December 2008, which is six months later than originally planned.
"We expect the commentary to be largely positive and focused on the near-term path to first flight," said Joseph Nadol at JP Morgan, in a research note.
Boeing is targeting its first test flight around the end of March next year, compared with its original plan of August this year, as a result of problems getting the first 787 assembled.
Beyond that, analysts anticipate problems.
"We doubt Boeing will announce any changes to the schedule," said Citigroup's George Shapiro, in a research note. But more delays are likely and production ramp-up "will be a major issue," he said.
"We also believe that the program is still facing industrial disarray and that Boeing is struggling to implement the ramp up necessary for 109 deliveries before the end of 2009," said JP Morgan's Nadol.
Despite postponing the initial delivery date in October, Boeing has essentially held to its ambitious production schedule, promising 109 deliveries before the end of 2009, compared with its original plan to deliver 112 of the planes by that time.
That timetable has been publicly doubted by analysts and industry insiders.
"We are sceptical that 109 deliveries will occur by 2009," said Shapiro. "Even if Boeing can reach its production targets, any changes resulting from flight certification will require modification of the approximately 60 aircraft that will be near completion at the time of first delivery."
Those with inside knowledge of the 787 program seem to agree that Boeing's plan to outsource most of the production to manufacturers across the world and assemble the pieces in Seattle has not worked as well as expected.
The original head of the program, who was moved aside by Boeing in October, commented soon afterward that some key 787 suppliers simply weren't up to the job, and that Boeing should consider bringing major production back to the Seattle area.
The difficulties of a spread-out manufacturing base has been exacerbated by an acute and unexpected shortage of bolts to hold the plane together. Boeing also did not help itself by putting together a shell of the plane for a flashy July roll-out only to pull most of it apart again.
As a result of the delays, major suppliers such as Rockwell Collins Inc and Spirit Aerosystems Holdings Inc -- which are not due to be paid until 787s start being delivered -- now face a long wait between investing heavily in the project and seeing financial benefits.
These and other suppliers are now in discussions with Boeing over possibly speeding up some payments, or making some other arrangement to reduce their exposure.
Boeing also faces the prospect of paying compensation to airlines waiting longer than expected for planes, just as Airbus, a unit of European aerospace group EADS, did over late deliveries of its A380 superjumbo.
"Unhappy suppliers do not make for successful airplane programs, and we believe that Boeing must address these issues," said Nadol at JP Morgan. "Although it would cause some near-term pain, we still think Boeing's best option may be to slow the ambitious production ramp up."
http://africa.reuters.com/world/news/usnMOL071284.html
The revolutionary carbon-fibre aircraft is already at least six months behind schedule, with a very ambitious ramp-up of production planned to meet the demands of the many airlines clamouring to get hold of Boeing's new fuel-efficient plane.
On Tuesday the project's new head, Pat Shanahan, is scheduled to face analyst and media questions in Boeing's latest regular update on the program, which has been struggling with a host of supplier issues and shortages of key components.
Wall Street expects that Boeing will admit that it is still having production problems, but will not delay the target for first delivery of November-December 2008, which is six months later than originally planned.
"We expect the commentary to be largely positive and focused on the near-term path to first flight," said Joseph Nadol at JP Morgan, in a research note.
Boeing is targeting its first test flight around the end of March next year, compared with its original plan of August this year, as a result of problems getting the first 787 assembled.
Beyond that, analysts anticipate problems.
"We doubt Boeing will announce any changes to the schedule," said Citigroup's George Shapiro, in a research note. But more delays are likely and production ramp-up "will be a major issue," he said.
"We also believe that the program is still facing industrial disarray and that Boeing is struggling to implement the ramp up necessary for 109 deliveries before the end of 2009," said JP Morgan's Nadol.
Despite postponing the initial delivery date in October, Boeing has essentially held to its ambitious production schedule, promising 109 deliveries before the end of 2009, compared with its original plan to deliver 112 of the planes by that time.
That timetable has been publicly doubted by analysts and industry insiders.
"We are sceptical that 109 deliveries will occur by 2009," said Shapiro. "Even if Boeing can reach its production targets, any changes resulting from flight certification will require modification of the approximately 60 aircraft that will be near completion at the time of first delivery."
Those with inside knowledge of the 787 program seem to agree that Boeing's plan to outsource most of the production to manufacturers across the world and assemble the pieces in Seattle has not worked as well as expected.
The original head of the program, who was moved aside by Boeing in October, commented soon afterward that some key 787 suppliers simply weren't up to the job, and that Boeing should consider bringing major production back to the Seattle area.
The difficulties of a spread-out manufacturing base has been exacerbated by an acute and unexpected shortage of bolts to hold the plane together. Boeing also did not help itself by putting together a shell of the plane for a flashy July roll-out only to pull most of it apart again.
As a result of the delays, major suppliers such as Rockwell Collins Inc and Spirit Aerosystems Holdings Inc -- which are not due to be paid until 787s start being delivered -- now face a long wait between investing heavily in the project and seeing financial benefits.
These and other suppliers are now in discussions with Boeing over possibly speeding up some payments, or making some other arrangement to reduce their exposure.
Boeing also faces the prospect of paying compensation to airlines waiting longer than expected for planes, just as Airbus, a unit of European aerospace group EADS, did over late deliveries of its A380 superjumbo.
"Unhappy suppliers do not make for successful airplane programs, and we believe that Boeing must address these issues," said Nadol at JP Morgan. "Although it would cause some near-term pain, we still think Boeing's best option may be to slow the ambitious production ramp up."
http://africa.reuters.com/world/news/usnMOL071284.html