Boeing delivers first 787 after 747-8 setback

Boeing Co's newest, biggest plane has cast a shadow over ceremonies to mark the three-years-late first delivery of its smaller cousin, the composite-plastic 787 Dreamliner. Handing over the initial 747-8 jumbo jet on September 19 was supposed to open a week of public-relations victories as Boeing delivered the first of its two beleaguered aircraft models. Instead, Boeing had to cancel three days of events as the launch customer for the 747-8 balked at the last minute. The planemaker now heads into a weekend of celebrations for the 787, the jet being counted on to return Boeing to the top spot in industry sales lost to Airbus in 2003. Chicago-based Boeing is trying to boost monthly Dreamliner output fivefold in the next two years to help make up for the delays. "Boeing is not only facing issues on the 747, they need the 787 production ramp-up to go smoothly," said Heidi Wood, a Morgan Stanley analyst in New York who recommends holding the stock. "But at the moment, it isn't going real well." Speeding up final assembly will be pivotal for Boeing. Planemakers receive most of their payments as jets move through the production cycle before delivery, and airlines' contracts generally provide for penalties upon delays. Boeing's aim is to reach 10 Dreamliners a month by 2013, a record level for wide-body aircraft, as it works off a backlog for 821 orders. "The aerospace supply base is working overtime just to produce two airplanes a month," Wood said in an interview. "We are convinced that the ramp-up is going to be longer and more arduous than Boeing is describing." Japan's All Nippon Airways will be the first airline to get the 787. The events for the handover begin today near the wide-body jet factory in Everett, Washington, where Boeing builds the Dreamliner and the 747-8. Scott Fancher, the 787 programme chief, said Boeing is working "very hard" with customers to make sure the plane will meet their needs and resolve any concerns. Boeing has said the initial Dreamliners are overweight, as are the first 747-8s, and the company is working to make them lighter. "We feel pretty good about this airplane and getting it ready to deliver to ANA," Fancher said last week in a Bloomberg Television interview. The 747-8 was already two years behind schedule before the freighter version's entry into service was delayed indefinitely on September 16 by Cargolux Airlines International's "unresolved issues". On Wednesday, Atlas Air Worldwide Holdings said it was dropping orders for three of its 12 747-8s, citing delays and "performance considerations". That leaves Boeing tweaking that plane, starting work on a new US Air Force tanker based on the 767 jet and developing an upgraded version of 737 model.