YTD Order Count Stands At -13

A second customer for Boeing's 787 Dreamliner cancelled the majority of its orders last week, leaving the American planemaker with a deficit of 13 orders so far in 2008.

The Seattle Times reports LCAL, a Dubai-based leasing startup, opted to pull 16 of its 21 orders for the composite-bodied airliner, citing changes in a number of factors in its decision.

"Whilst the economic down turn has been unhelpful there are other factors affecting LCAL's business model, including the postponement of the originally-anticipated revenue streams from the projected operating lease activities," reads a statement on the LCAL web site. "As a result LCAL's shareholders are rethinking their investment strategy and there are now plans to redirect capital into different sectors."

As ANN reported, LCAL had ordered a mix of -8 and -9 variants of the Dreamliner, the most recent a six-plane follow-on order announced at the 2007 Dubai Air Show. The startup enterprise was the first leasing company to commit to the 787, and planned to operate the Dreamliner series exclusively. At the very least, the cancellation likely reflects a shift in that strategy.

LCAL stressed it "continues to believe in the performance of the Boeing 787 and work with Boeing towards the delivery of the remaining aircraft..." though one industry consultant says it's not a question of whether LCAL will dump its final 787 orders, but when.

"We've confirmed the other five LCAL will be eventually be canceled," wrote Leeham Group analyst Scott Hamilton, once arrangements are finalized with customers Royal Jordanian and Royal Brunei airlines.

The Times noted the Wall Street Journal broke the news of the LCAL cancellation last week. So far in 2008, two 787 customers have cancelled their orders for the revolutionary, albeit oft-delayed, composite aircraft; last month, Russia's S7 nixed its 15 orders for the 787, citing concern for global economic factors.

With only 18 new 737 orders on its books so far in 2009, that leaves Boeing's sales total at minus 13 planes so far. Given the tumultuous state of the market, few expect that number to rise appreciably in the positive direction any time soon.

FMI: www.boeing.com