Boeing Co. (NYSE: BA) and its 787 Dreamliner are more than three years behind schedule and has cost the company billions in penalties paid to customers due to the delays. The company’s latest plan had called for the first Dreamliner to be delivered early in the first quarter of 2011. Now Boeing says the delivery will not happen until the middle of the first quarter.
The most recent problem “follows an assessment of the availability of an engine needed for the final phases of flight test this fall.” The recalcitrant engine, which is being built by Rolls-Royce Group (PINK: RYCEY), failed a test earlier this month and caused damage to Rolls-Royce’s English test facility. The damage was declared to be relatively minor, and Boeing has said that the “availability issue” is unrelated to the test bed failure.
Boeing’s first delivery is scheduled to go to Japan’s All Nippon Airways, Inc. (PINK: ALNPY). ANA, as the airlines is known, has said that while it regrets the delay, it will wait patiently, confident that it will receive “the best possible aircraft in the shortest possible time frame.”
The Dreamliner offers Boeing’s customers a choice of engines. General Electric Co. (NYSE: GE) is the second supplier of engines, but early customers have chosen the Rolls-Royce engine, which until now has been problem-free in testing.
Boeing has said that as of April 2010 some 866 Dreamliners had been ordered.
The string of delays, of which this is number eight, has given competitor EADS (PINK: EADSF), maker of the Airbus planes, a chance to catch up with Boeing, even though the European maker got started later on its competitor Airbus 350.
Boeing’s CEO started his tenure at about the same time that the Dreamliner was announced, and he and his management team have presided over the many delays that have plagued the plane. So far though, the company’s board has stood behind the CEO. Now may be the time to wonder how long the board will maintain that stance.
If the company can’t get the Dreamliner out by this latest delivery date, someone will almost certainly pay the price. The CEO would be at the top of the list of suspects.
As of this writing, Paul Ausick did not own a position in any of the stocks named here.
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