Boeing again delays first 787 delivery

Boeing Co., citing unresolved production problems, said Wednesday that it would be unable to deliver its first 787 Dreamliner passenger plane until early 2009 – more than nine months later than it had promised airlines.

The latest holdup marks another embarrassing setback for Boeing, which had insisted even as recently as last month that there would be no further delays after having pushed back delivery of the first 787 by six months in October.

In a conference call with analysts Wednesday, Boeing executives said they did not anticipate the delay having a significant effect on 2008 earnings, though the company was still assessing how it would affect earnings in 2009, the first year when Boeing would have to pay penalties to airlines.

But Peter Arment, an analyst with American Technology Research, estimated in a report to investors Wednesday that Boeing may have to pay penalties to 40 airlines totaling more than $1 billion.

The 817 Dreamliners on order from 53 customers have a combined value of more than $110 billion.

Arment also cautioned that the program could encounter “further complications” that could require Chicago-based Boeing to pay major suppliers at least $1 billion to renegotiate a revised production schedule.

“Boeing is a great company and eventually will make another great airliner for the world to enjoy,” he said, but over the next several quarters, Boeing’s stock “is likely dead money.”

Airlines have been eager to get the new mid-size, long-haul plane, which Boeing has promised would be highly fuel-efficient and provide greater comfort for passengers. It is the hottest-selling Boeing jet ever.

But the company said it had been unable to resolve problems with major components made by key suppliers. Parts for the 787 are made by manufacturers scattered around the globe and then shipped to Boeing’s Everett, Wash., plant where they are, in many respects, “snapped” together.

“We underestimated how long it would take to complete someone else’s work,” Pat Shanahan, general manager of the 787 program, said during a teleconference call Wednesday with industry analysts.

Boeing shares rose $2.01, or 2.6%, to $79.87 on Wednesday after losing about 5% a day earlier on news that another delay announcement was imminent.

“While we’re deeply disappointed that we could not maintain our previous schedule, we believe we’ve made the right decision to help assure the success of this program,” said Scott Carson, head of Boeing’s commercial aircraft business.

Japan’s All Nippon Airways, which was expecting to be the first airline to fly the plane this spring, said in a statement that the latest delay was “extremely regrettable,” but added that it would “work with Boeing on the revised schedule and decide how to proceed from there.”

peter.pae@latimes.com