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Tue, Jun 10, 2008

Wedgetail Deliveries To Australia Delayed

First Plane Rolled Out In 2002

There are two words employees in Washington, executives in Chicago, and customers around the world are probably sick and tired of hearing in the same sentence: "Boeing" and "delay." Alas, that once again is the scenario we're reporting about.

The good news is, this story isn't about Boeing's oft-delayed 787 Dreamliner... but rather an Australian defense program based off the planemaker's erstwhile 737 airliner. Boeing announced Tuesday the $1 billion "Wedgetail" surveillance aircraft program won't see its first planes delivered until 2010, due to continued "systems integration" issues.

That's one year later than previously thought, reports Bloomberg. It's also one year later than Boeing spokesman David Sloan said the first planes would be delivered just last week. Sloan said he couldn't tell reporters then the six planes would be delayed, as employees had not yet been notified.

As ANN reported, the first Wedgetail aircraft -- named after a native Australian eagle, and fitted with a wedge-shaped, Northrop Grumman/BAE-sourced early-warning radar platform atop a modified 737-700 fuselage -- rolled out of Boeing's Renton plant way back in 2002, with deliveries slated to begin in 2006. That didn't happen... and Australian defense minister Brendan Nelson said then his country was "very disappointed" with what was then forecast to be at least a two-year delay.

Fast-forward 24 months. Australia's Royal Air Force is no less disappointed... though Department of Defence spokesman Chris Deeble took a pragmatic tack in confirming the latest delays.

"The further delay relates to continuing maturity, stability and performance problems being experienced with subsystems (notably radar and Electronic Support Measures) and system integration," Deeble wrote in an e-mail to Bloomberg. "These issues are being progressively resolved as part of the developmental test and evaluation process."

Under the revised schedule, Boeing will deliver the first two Wedgetail aircraft to Australia in early 2010, with the remaining four planes coming before the end of that year. Sydney-based strategist Michael McKinley said that's still two years too late.

"If you can't get it now for effectively another two years, then by the time you get them up and running you're talking about a significant delay to a very expensive capital item thought necessary for the security of Australia," McKinley said.

Boeing is also building a version of the plane for Turkey -- it's called the "Peace Eagle" there -- and that program has suffered from similar delays.

In 2006, Boeing estimated it would take somewhere between a $300 million and $500 million pre-tax hit for the delays. No word yet on what the financial impact will be this time around.

FMI: www.boeing.com/defense-space/infoelect/wedgetail-737/

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