Despite Official Reports To The Contrary, They Expect More Delays

It's tough to be a certain American planemaker this week. With Boeing Integrated Defense Systems still reeling from the loss of the US Air Force KC-X contract -- and now involved in a Government Accountability Review of the process that awarded the deal to Northrop/EADS -- the commercial division of the aerospace manufacturer is facing some tough talk, and even outright skepticism, at an industry trade show over its beleaguered 787 Dreamliner program.

The Seattle Times reports several airline executives and industry analysts attending this week's International Society of Transport Aircraft Trading (ISTAT) Conference in Orlando, FL spoke harshly about the state of the troubled airliner, and took Boeing to task over its reassurances the 787 remains on target for its first flight in June. Those customers say they've heard it before.

"The production ramp-up is going to be slower" than previously announced, said one senior executive with an airplane-leasing company and Boeing customer. "It was always aggressive. Now it's not achievable."

All customers interviewed by the Times spoke anonymously, saying they didn't want to get on Boeing's bad side publicly. Investment brokers cited their respective company's policies about public comments.

As ANN reported last week, Goldman Sachs analyst Richard Safran predicted the looming announcement of another delay to the 787, citing unnamed sources close to the program. If true, it would be the third such delay in the Dreamliner program, which saw the first plane unveiled to the public in July 2007.

Boeing announced the first six-month delay to Dreamliner deliveries in October 2007... and while heads at Boeing didn't necessarily roll, they did bounce, with former 787 program chief Mike Bair shuffled out of the program, and several executives from other Boeing areas moving over to the troubled 787 program.

Things seemed to be on track after that, and most 787 customers accepted the delay with little public grumbling. Sales of the airliner also continued at a fast pace, with 817 orders taken for the efficient airliner through December 2007.

In January, however, Boeing announced a second delay, this one of about three months... and eyebrows raised. At ISTAT this week, Boeing Marketing VP Randy Tinseth sought to reassure those customers, saying the program remains on the schedule announced in January, with first flight by June and entry into service in "early 2009."

Few in the industry believe him.

"Yeah, right," a second senior leasing executive grumbled to the Times. "There's the official position and then there's the unofficial position."

Another official, this one an executive at an airline, told the paper he doesn't expect his company will see any Dreamliners in 2009, despite Boeing's current schedule that shows it will receive its first 787 in the summer of that year.

The consensus among those interviewed is that Boeing will deliver no more than 45 787s -- and possibly a lot less -- in 2009, despite the current Boeing forecast it will roll 109 planes out the door in that timeframe. Goldman Sachs' Safran predicts 50 deliveries.

Customers also wish Boeing had announced a single, 18-month delay to the Dreamliner program in October, instead of parsing out the bad news incrementally. Boeing is currently about a year behind its original schedule; the company would have looked all-the-more impressive, they say, if Boeing had then beat its own 18-month deadline.

One leasing company executive summed up the mood in the field succinctly. "Boeing didn't learn anything from the A380," he said, referring to the 22-month delay in deliveries of the superjumbo airliner.

"Three strikes and you're out," he added. "If what comes out [later this month] doesn't work, there's no place left to go."

FMI: www.boeing.com