Deliveries Delayed Over Two Years For Smaller Carriers

Boeing's announcement last month of a third delay to its 787 Dreamliner program sent several carriers scrambling to compensate for delivery delays that could stretch as long as 30 months, according to a recent report by The Seattle Times.

As ANN reported, Boeing announced April 9 it had pushed the first 787-8 delivery, to All Nippon Airways, to the third quarter of 2009 -- a delay of 16 months past the original target delivery date, which was this month.

Instead of delivering the first customer bird into ANA's eager hands, however, the first Dreamliner has yet to even fly... or be powered-on, for that matter. Boeing says the "on" switch for the first flying 787 should be flipped by the end of June.

Despite the long delay ANA must now contend with, that airline is getting off easy compared with carriers that ordered their 787s closer to the end of Boeing's 857-plane order book. They may not receive their planes until 30 months after the delivery dates originally promised, according to Boeing's revised delivery schedule that pegs Dreamliner production reaching 10 planes per month in 2012... two years later than planned.

Even Boeing's largest 787 customer -- leasing giant International Lease Finance Corp. -- will have to wait some 27 months for their planes, according to a recent regulatory filing. That pushes ILFC's first 787 delivery until sometime in 2012; it will receive the last of its 74 planes in 2019.

Industry analyst Scott Hamilton termed Boeing's revised schedule "a cascading ripple effect that delays everything downstream." For Air Canada, with 37 Dreamliners on order, perhaps a more apt analogy would involve things rolling downhill.

In a conference call this week, CEO Montie Brewer said he plans to hit Boeing where it hurts most -- in its pocketbook -- in seeking compensation for the late planes. "We were counting on those aircraft, especially in an environment where you have high fuel prices," said Brewer. "Now they are delayed and we are going to have to manage through it with aircraft that have higher (fuel) burn rates."

Boeing spokeswoman Yvonne Leach says average 787 delays work out to about 20 months on the revised schedule, which is based on the assumption of 10 a month" in 2012. "If we can go above that, great, then we'll do what we can for the customer. But right now, we want to commit to something we know we can do. We don't want to risk disappointing them with any assumptions that we can go up in rate at a later time."

Three smaller 787 customers -- the UK's Monarch, Royal Jordanian, and LAN Chile -- say they've been told by Boeing to enter a holding pattern for  two years... but at least they now know what to expect, analyst Hamilton notes.

"In some ways they are probably relieved to finally know what the number is," he said. "Now they can plan."

FMI: www.boeing.com, www.aircanada.com