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Boeing has design trouble with the 787 Dreamliner

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Oh boy! What was I saying yesterday about Qantas and the Dreamliner order?

June 26  Boeing Co. lost half of a 30-plane order for its 787 Dreamliner from Qantas Airways Ltd., formerly the model’s biggest airline customer, amid slumping demand for international travel.

The carrier canceled 15 787-9 aircraft scheduled for delivery by 2015 and will delay taking another 15 787-8s by four years, Sydney-based Qantas said in a statement today. The changes weren’t influenced by Boeing’s announcement this week of a design issue with the planes, the airline said.

The cancellation, valued at as much as $3.1 billion based on Boeing’s current list prices, follows the fifth delay of the 787, already two years behind schedule. Boeing has lost orders for 58 Dreamliners this year as carriers struggle with record declines in passenger traffic and the International Air Transport Association forecasts industry losses worldwide may total $9 billion in 2009.

“Boeing is really facing a crisis that they will ultimately surmount, but they need to be very careful of a perceived loss of confidence,” said Michel Merluzeau, an aviation analyst at G2 Solutions in Kirkland, Washington. “The cancellation is a serious worry to the 787 program. I suspect this won’t be the last.”

Boeing, the world’s second-largest commercial plane maker, rose 2.9 percent to $42.53 yesterday and has plunged 38 percent in the past year. Qantas shares rose 1.8 percent, to A$2.01 at the close of Sydney trading.

Prudent Delay

Qantas’s first batch of Dreamliners, 15 aircraft for its Jetstar discount carrier’s international routes, will be delivered from mid-2013, about three years later than planned.

“Delaying delivery, and reducing overall 787 capacity, is prudent,” Chief Executive Alan Joyce said in the statement. “Qantas announced its original 787 order in December 2005, and the operating environment for the world’s airlines has clearly changed dramatically since then.”

Qantas and Japan’s All Nippon Airways Co. will jointly remain the Dreamliner’s biggest airline customers with firm orders for 50 aircraft each.

“We are working Qantas to make changes appropriate to the current climate,” said Jim Proulx, a Boeing spokesman in Seattle, where Boeing’s commercial aircraft operations are based.

The 787-9 is Boeing’s most expensive Dreamliner costing between $194 million and $205.5 million, according to Boeing’s Web site. It is the model’s longest-range version capable of carrying as many as 290 passengers as far as 8,500 nautical miles (15,750 kilometers).

Cost Cutting

Cutting the Boeing order, two months after delaying deliveries of Airbus SAS planes, will save Joyce $3 billion as a slump in corporate travel creates record losses at Australia’s largest airline. Joyce, 43, has already slashed jobs and grounded aircraft to combat what he says is aviation industry’s worst-ever crisis.

“They’ll take whatever measures they have to take, but they still have flexibility,” said Matt Crowe, an analyst at JPMorgan Chase & Co. in Sydney, who rates Qantas “overweight.” “In the short term the reduced capital expenditure will help.”

The company spent A$1.38 billion ($1.1 billion) in capital expenditure in the six months ended in December, the highest amount in six years.

Airline industry 2009 losses worldwide may nearly double IATA’s previous forecast, as an outbreak of swine flu compounds the effects of the recession, the trade group said June 8. Sales may fall 15 percent to $448 billion from $528 billion last year, it said.

Boeing Completes Crucial Fix On First 787
November 12, 2009

Boeing said on Thursday that it has completed work to address a structural problem on its delayed 787 Dreamliner, and still expects the plane's maiden flight to take place before year's end.

The company said reinforcements have been installed within the side-of-body section on the first 787. New fittings at 34 stringer locations were installed within the joint where the wing is attached to the fuselage.

The company said completing the modifications was a crucial step toward the first flight of the 787.

In late June Boeing put off the first flight of the Dreamliner, citing the structural problem. It was the latest in a series of delays that have put the test flight two years behind its original schedule.


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