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Boeing confident they’ll hit new 787 deadline

/ Source: The Associated Press

Delays in Boeing Co.'s 787 program have given the company extra time to fine-tune the plane's electronics and other systems, lowering the risk that it will encounter problems during flight testing, the head of its commercial jet division said Wednesday.

Speaking in New York at an aerospace and defense conference hosted by Cowen & Co., Scott Carson said Boeing has "great confidence that the airplane will be ready to go as we've scheduled it."

"We have taken advantage of the delays to make sure our system level maturity is coming along at a rate that will avoid problems as we enter flight test," Carson said.

Boeing is slated to start test flying the 787 by late June, almost a year later than originally planned. Japan's All Nippon Airways was supposed to take delivery of its first 787 this May, but will now have to wait until early next year.

Boeing announced the latest in a series of delays last month, citing slow progress assembling the first planes, which it blamed mostly on significant work that had to be done on the factory floor — work its many suppliers were supposed to finish on their own. It also has struggled with an industrywide shortage of fasteners that hold pieces of the plane together.

Carson acknowledged that Boeing has learned some tough lessons with the 787 and said it needs to improve relationships with its suppliers, which are designing and building a bigger share of the 787 than they ever have on any other Boeing airplane program.

Boeing has sent scores of production experts to factories all over the world to help suppliers improve production.

"We're finding that the system is straightening itself out in a hurry," Carson said. "It has required a great deal of effort on our part and on our supply partners, but we are on track at this point."

Three planes are on the final assembly line in Boeing's widebody factory in Everett, north of Seattle. Boeing will make three others for its flight- and ground-test program.

Mitsubishi Heavy Industries in Japan is working on wings for the seventh plane, which will be the first to enter commercial service. Some suppliers are already working on parts for the 17th plane, Carson said.

Boeing faces costly penalties for delivering planes late, and some suppliers who are waiting to get paid have also asked for financial relief. Carson said Boeing is in talks customers and suppliers, discussing on a case-by-case basis how the delays have affected them.

Boeing shares dipped 65 cents, or less than 1 percent, to $80.64 in afternoon trading Wednesday. The company's stock has fallen about 20 percent since last July, before the first delay was announced.

To date, Boeing has won more than 850 orders for the 787 from some 56 airlines, leasing companies and other customers, making it the most successful new plane in the company's history.

Boeing hasn't won many orders for a slightly larger, more fuel-efficient version of its 747 passenger jumbo jet. Luftansa, which has signed up for 20, is the only airline that's placed a sizable has order for the 747-8, but Carson said he thinks more customers will follow.

The cargo version of the 747-8 sold much better. It's scheduled to enter service late next year, about a year ahead of the passenger version.

Boeing expects its next new airplane to replace the single-aisle 737 and enter commercial service around 2015, Carson said, but he noted the company hasn't yet come up with a design that meets the criteria customers have outlined.

Boeing won a record 1,413 commercial plane orders last year, about 70 more than rival Airbus SAS. Both companies have predicted they'll sell fewer planes in 2008.

Because its customer base is broad and scattered worldwide, Boeing has not seen significant signs that the U.S. economic downturn is hurting the company. Nevertheless, Carson said Boeing remains concerned about "the opportunity that exists for us to sneeze and give the rest of the world cold."