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Boeing's Turbulence: More Dreamliner Delays

CNBC.com
Wednesday, 9 Apr 2008 | 7:31 AM ET

Boeing is expected to announce that its 787 Dreamliner will be delayed up to a year, according

In this hand hout computer-generated image provided by Boeing shows the company's new series Boeing 787 Dreamliner, Wednesday, April; 27, 2005.  A senior Boeing Co. official on Wednesday brushed off the threat of European rival Airbus SAS's "superjumbo," saying orders for Boeing's smaller, more fuel-efficient Dreamliner were robust. (AP Photo/Boeing) ** EDITORIAL USE ONLY **
AP
In this hand hout computer-generated image provided by Boeing shows the company's new series Boeing 787 Dreamliner, Wednesday, April; 27, 2005. A senior Boeing Co. official on Wednesday brushed off the threat of European rival Airbus SAS's "superjumbo," saying orders for Boeing's smaller, more fuel-efficient Dreamliner were robust. (AP Photo/Boeing) ** EDITORIAL USE ONLY **

to sources and media reports.

The aircraft, the manufacturer's push into a new realm of aviation technology and construction, will likely force the company to pay billions of dollars in compensation to its airline customers.

The delay is expected to be 9-12 months. The aircraft maker is expected to give a range putting the first flight in mid-2009. Based on that target and a successful test, the first delivery will likely be in late 2009.

Full production of the Dreamliner wasn't expected until 2009, with relatively few deliveries expected in late 2008. So the delays' financial impact, while significant, is somewhat muted. Still, the setbacks remain a serious problem for the aircraft maker.

The Dreamliner Nightmare
A major setback for Boeing, with CNBC's Phil LeBeau

"I think Boeing has definitely gotten to the point where it's a 'show me' story," said Brian Nelson, Morningstar Defense Analyst, in an interview on CNBC. "Management's credibility has been called into question here. Because they've yet to power on the aircraft or have done the flight testing for the aircraft. I don't think Boeing can guarantee that the schedule won't experience further revisions going forward."

The Dreamliner has taken orders worth more than $150 billion. It was scheduled to enter commercial service next month but this initially slipped to early 2009 and has now been delayed again.

Boeing is also thought to be ready to postpone or even scrap one of the three variants of the aircraft to enable its engineers to focus on solving existing problems.

-- Reporting from CNBC's Phil LeBeau

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