Boeing Inching Towards First 787 Flight

Dogged by production delays and a sagging global economy, Boeing's 787 Dreamliner finally appears set for its first flight, an event that could shape the future of Boeing and commercial aviation itself.

The carbon composite aircraft -- two years behind its original schedule -- promises to usher in an era of lighter, more fuel-efficient planes. With oil near USD$70 a barrel, cost conscious airlines are desperate for lower jet fuel bills.

For Boeing, the world's No. 2 commercial planemaker, a successful test flight would bolster its image after several embarrassing schedule changes and order cancellations. The company has 56 customers who have placed 866 787 orders -- a record number for pre-delivery aircraft.

"It'll definitely be a momentous milestone," said Alex Hamilton, senior managing director at Jesup & Lamont Securities. "It's sort of changing the way aircraft have been built."

"This will add nothing to the bottom line, but it's certainly going to be a psychological positive," he added.

Chicago-based Boeing and rival Airbus are being hit hard as carriers and cargo operators grapple with economic recession in many parts of the world. So far this year, Boeing has seen as many order cancellations as it has new orders.

The company has yet to set a firm date for the first 787 test flight, but CEO James McNerney said as recently as last week that it would fly in June. Some experts think the test flight, near the assembly site in Seattle, may be planned to coincide with the Paris Air Show, which starts on June 15.

"Literally, I think they'll put duct tape on this thing and get it up if they have to," Hamilton said.

DELAYS

Boeing had originally planned to fly the 787 in the summer of 2007. But the date was pushed back four times because of production problems and a two-month strike.

"Boeing has had a lot of egg on their face for the way they've handled the 787," Hamilton said.

At Boeing's annual shareholders meeting on April 27, McNerney said he was disappointed by the program's setbacks. But he reiterated the importance of the aircraft to Boeing and to the commercial airline industry.

"By far, the biggest of our challenging programs and the most critical to our future growth and success is the 787," he said.

"The growing pains that we have experienced with this airplane are not uncommon with game-changing innovation," McNerney said. He noted the possibility that the test flight could reveal unforeseen flaws that add to development time.

Airbus discovered problems with its A380 superjumbo after its test flight. The first of the double-decker A380s was delivered about two years late because of wiring problems, and Airbus has repeatedly been forced to delay its delivery targets.

But if the 787 flies on schedule and reveals no flaws that further delay production, then Boeing plans to begin delivering the panes in the first quarter of 2010.

Boeing gets paid at delivery. The list price for a Dreamliner is about USD$165 million, making its 787 order book worth about USD$140 billion.

"They're betting the commercial side of the company," said Richard Aboulafia, aerospace analyst at the Teal Group. "This is the key to their product line reinvention."

"It's the plane of the decade," he said. "It's going to be the first of a long series of aircraft built with advanced composite materials rather than metal."