LITTLE ROCK — Boeing Co. said Thursday that its long-delayed 787 jetliner will be ready for its maiden test flight by year's end and its first delivery in the fourth quarter next year.
But Wall Street remains skeptical.
The initial flight of the next generation plane, built for fuel efficiency with lightweight carbon composite parts, was originally planned for the fall of 2007. But production problems delayed the passenger jet five times and the first deliveries are more than two years behind their original schedule.
After so many false starts, airline customers have grown irritated and analysts skeptical of the company's timetables for the 787. Billions of dollars in penalties and expenses are expected from the delays.
Boeing came under questioning in a conference call after the announcement. One analyst, Howard Rubel of Jefferies & Co., asked why the latest schedule is "any better" than ones issued previously by the company.
"We understand the need to make the best and safest aircraft possible and appreciate that delays due to engineering issues of the current nature must be solved in order to move forward and achieve this," Japan's All Nippon Airways Co. said in a statement Thursday. "However, as launch customer and future operator of the 787, the length of this further delay is a source of great dismay, not to say frustration."
Boeing will now book a pretax charge of $2.5 billion, or $2.21 per share, in the third quarter related to the 787 program, the company said Thursday. The charge includes a write-off for the first three test planes, which Boeing says customers don't want.
"The charge is rather eye-watering, but we think it is better to take the pain now, remove the overhang and get on with the program," Rob Stallard, a New York-based analyst with Macquarie Capital Inc., said in a note to clients. "The real challenge for Boeing is to actually stick to this revised 787 timetable - something it has been unable to do in the past."
With the 787, the company has taken a new approach to building airplanes, relying on overseas suppliers to build huge sections of the plane that are later assembled at the company's commercial aircraft plant near Seattle.
But ill-fitting parts and other problems have hampered production. The latest delay came in June, when the company said it needed to reinforce areas close to where the wings and fuselage join.
Still, the jet remains Boeing's best-selling new plane and a priority as it struggles with sharply lower orders caused by weak demand for air travel. Boeing currently has 850 orders for the 787.
The company and some analysts say the 787 eventually will prove a financial and technological success.
With the new schedule set, shares of Boeing rose $4, or 8.36 percent, to close at $51.82.
The 787 is Boeing's first all new jetliner since the 777, which airlines began flying in 1995.
Information for this article was contributed by Daniel Lovering of The Associated Press and by Susanna Ray of Bloomberg News.
Business, Pages 29, 34 on 08/28/2009