Even though investigators have a complete plane to examine, they still have not been able to determine why a British Airways 777-200ER lost power in both engines and crashed just short of a Heathrow runway in January.

The UK's Air Accidents Investigation Branch this week issued an update of its investigation of the January 17 accident. You can find the report here.

"This is a great mystery, and I never expected this accident to be this difficult to solve, given the state-of-art tools on the plane and the fact that the aircraft was largely intact," Bill Voss, president of the Flight Safety Foundation, told the Washington Post this week. "This has potentially broad implications that go beyond this one airplane, depending on what they find."

From the Post story:

As the hulking passenger jet approached London's busiest airport after a long flight from China, the inexplicable happened: Both of the plane's engines sputtered and essentially died.

There was little the British Airways pilots could do to keep the Boeing 777 in the air. Within seconds, the twin-engine jet pancaked spectacularly to the ground. The plane was wrecked beyond repair.

Although no one was killed in the Jan. 17 crash, investigators are facing extreme pressure to determine what brought down the 777 in an accident that has quickly become one of aviation's modern mysteries.

The wide-body 777 is one of the world's most popular long-haul jets, ferrying tens of thousands of passengers a day across the globe. The crash has also raised questions about how airlines operate an increasing number of long flights over remote and harsh areas of the world.

British authorities have not said much publicly about the accident. They released a report yesterday saying they suspected that the plane's fuel flow became restricted somewhere between the engines and the fuel tanks. They did not indicate what they thought caused the blockage. Ice collecting in or near an engine component has emerged as the prime suspect, according to sources familiar with the investigation who spoke on condition of anonymity because they were not authorized to discuss the probe.

It is ironic, outside experts said, that investigators have not figured out what caused the jet to crash about 1,000 feet short of a runway at Heathrow Airport. Investigators expected a quick resolution because they have obtained more data and information about the accident than any they can recall in aviation history, according to sources and outside experts.

They have interviewed passengers and crew members. They recovered every key part of the plane, allowing them to test the jet's components. They retrieved the plane's flight data recorder, cockpit voice recorder and a separate data recorder installed by British Airways.

Spirit AeroSystems in Wichita, Kan., will be supplying Airbus with a large section of the A350 fuselage, the companies announced Wednesday.

Here is my story:

By James Wallace
P-I aeropace reporter

Underscoring the global nature of the aerospace business, a key Boeing Co. partner on its 787 program has been picked to manufacture a large chunk of the fuselage for a competing Airbus plane.

Spirit AeroSystems in Wichita, Kan., announced Wednesday that it had signed a contract with Airbus, worth nearly $3 billion over 20 years, to produce a 65-foot-long composite fuselage structure for the A350 XWB (extra wide body), which Airbus is developing to challenge the 787 Dreamliner.

Spirit is the world's largest independent supplier of large components and assemblies for commercial aircraft. It manufactures the 43-foot-long nose and forward fuselage section of the Dreamliner in Wichita.

The company said firewalls will be in place to make sure that the A350 and 787 work is kept separate and that there is no transfer of technology or top-secret manufacturing processes.

Both the 787 and the A350 will have mostly composite airframes, although Boeing and
Airbus have taken different approaches to manufacturing the composite fuselage of their respective jets.

"We are bound by our contracts to make sure that never happens," a Spirit spokeswoman said when asked how the company will make sure that what it has learned in helping Boeing develop cutting-edge composite manufacturing processes for the 787 do not find their way to Airbus.

"It's incredibly important to keep everything separate," she added.

Boeing has said before that it was not concerned that any of its 787 partners might end up working on the A350. Alenia, the Italian company that makes part of the 787 fuselage, has also sought a work share on the A350 program.

Spirit has already produced composite nose sections for the six 787s that will be used for the upcoming test flight program as well as two more for ground-test planes. Three of those test flight planes are in final assembly at the Everett plant, as are the two ground-test planes.

Manufacturing has not yet started on the A350, which won't enter airline service until at least 2013.

The first 787s are expected to be carrying passengers next year.

Ironically, the A350 work won by Spirit will be done at a new plant to be built in North Carolina, at a technology park near Kinston that several years ago made Boeing's short list as a possible final assembly site for the 787.

Boeing eventually decided to assemble the Dreamliner at its widebody jet factory in Everett.

"We're proud to have won this contract through a global competitive bid process, and will begin work on the design phase of the program immediately," Dan Wheeler, Spirit's A350 program director, said in a statement.

Spirit's operations in Wichita were once part of Boeing Commercial Airplane's Wichita division, which had built parts for Boeing's jetliners since the 707 at the dawn of the jet age.

But several years ago, Boeing decided to shed its once vast manufacturing capabilities and focus on large-scale systems integration, design and final assembly. Boeing sold its Wichita division in 2004 to Onex Corp. of Canada, which renamed it Spirit.

Under the new ownership, Spirit executives have sought to expand the business far beyond Boeing. Spirit made a strong pitch to Airbus for the A350 work.

The Airbus move to award the A350 work to Spirit will help the Toulouse, France-based jet maker offset the weak U.S. dollar, which is hurting its profits. Airbus sells planes in dollars, but much of the company's cost base is in euros. Transferring production work to non-euro countries such as the U.S. will help Airbus financially.

Debbie Gann, a spokeswoman for Spirit, said construction of the North Carolina plant for the A350 work will begin next year and be up and running by 2010. The plant will be in the Global TransPark near Kinston, which was designed to attract new business to Eastern North Carolina. Spirit will be the park's fist major tenant. Nearby is an 11,500-foot runway.

The site was among the three finalists in 2003 when Boeing held a nationwide competition to find a final assembly site for its 787 Dreamliner. Gann said Spirit selected the Kinston site after a global search that considered 25 locations. The two other finalists were Wichita and another site on the East Coast, which she would not identify.

The North Carolina plant will initially employ about 500 people, according to Spirit, but that number could grow to more than 1,000 within five years.

The A350 fuselage section that the plant will manufacture for Airbus will be 65 feet long and nearly 20 feet wide. It is known as section 15 and will be the center fuselage frame.
The 787 section that Spirit manufactures in Wichita is known as section 41. It is about 18 feet in diameter and some 43 feet long.

Boeing is using a much different manufacturing process on the 787 than Airbus will use on the A350. The A350 will have composite fuselage panels. The 787 fuselage consists of large, one-piece composite barrels that must be baked in giant autoclaves. No one in the industry has ever made such large composite pressure vessels before. Boeing and Airbus each argue that its way is best.

As expected, Airbus has finally acknowledged there will be further delays with its A380, which was nearly two years late when the first plane was delivered to Singapore Airlines last year.

Here's the report from The Associated Press.

UPDATE:

Below is is my Aerospace Notebook for Wednesday, which leads with the A380 delays and also updates the tanker appeal.

Also, the Dallas Morning News Tuesday ran and a story about Vought's 787 production problems, which Vought executives say in the article have pretty much been fixed.

By James Wallace
P-I aerospace reporter

"Thirteen years ago Thursday, The Boeing Co. delivered the first 777 to United Airlines – on schedule to the very day it had been promised years earlier.

But meeting schedules for the next generation of jets from Boeing and Airbus, with all the advanced technology and new production methods, has proved impossible.

Boeing's 787 Dreamliner, which was supposed to be delivered this month to the first customer, All Nippon Airways of Japan, is already 15 months late, and some airlines won't get their planes for up to 30 months or more after they were promised. The Dreamliner is the first large commercial jet with a composite airframe.

It remains to be seen if Airbus learns from Boeing's mistakes with the 787 and delivers its competing composite plane, the A350, on schedule in 2013. For now, Airbus continues to have problems meeting its delivery commitments for the A380, a plane that is already hauling passengers.

As expected, Airbus announced Tuesday that deliveries of its A380 will slip again, though only by an average of two-and-a-half to three months. Still, this follows a delay of nearly two years in getting the first A380 to Singapore Airlines in last September.

"I have to say, as CEO of Airbus, that I regret this very much," Airbus boss Tom Enders said in a conference call with media and analysts.

Airbus had said in 2006, after the extent of what became an 18-month delay was fully know, that it planned to be building four of the double-decker planes a month in a few years.

Enders said in the call that is no longer "fully achievable," at least within the time frame once hoped. It is now building about one A380 a month.

The latest delays will affect planes that are delivered in 2009 and 2010. These are what Airbus calls its "Wave 2" A380s, in which new automated production methods will be used that will eventually streamline the production process. The first 25 A380s are essentially being wired by hand, and problems with the wiring bundles caused the earlier major delays.

Production, rather than technical issues, has also been the main reason why Boeing's 787 is so far behind schedule. Boeing recently cut its 787 production forecast from 112 planes delivered by the end of 2009 to only 25, and said it would be 2012 rather than 2010 before it could reach its initial target of building 10 Dreamliners a month.

For Airbus, the latest news is not nearly that bad.
Instead of delivering 13 of the super jumbos this year, Airbus said it will only deliver 12. It expects to deliver 21 next year rather than the planned 25. And deliveries in 2010 will range from 30 to 40 planes rather than 45, Enders said.

Boeing has announced three major delays on its 787. That's one less delay than Airbus has had to announce for the A380.

"We are in a four-year recovery program," Enders said on the conference call. "We have to make some progress but we are not back to square one."
---------
Alabama's tanker. Assuming Boeing loses, as expected, its appeal next month of the Air Force tanker decision, winner Northrop Grumman plans to move quickly to build its tanker plant in Mobile, Ala.

The Government Accountability Office, the watchdog agency for Congress, is supposed to decide by around mid-June whether Boeing made its case that the tanker competition was seriously flawed and that it should be re-bid.

Northrop announced Tuesday that it plans to break ground at its tanker plant in Mobile on June 28. By then, the GAO should have made its decision.

"We anticipate a favorable decision and look forward to starting construction on this historic facility," Ronald Sugar, Northrop's chairman and chief executive officer," said in a statement. "We're committed to transforming Mobile into the centerpiece of an expanding aerospace corridor."

Northrop and partner EADS plan to construct two plants adjacent to each other at Mobile's Brookley Field. Large sections of the A330 would be transported from Europe to one plant for final assembly of the plane, which would then be moved into the second plant for the military and tanker modifications.

Northrop noted that the ground-breaking ceremony is planned just a few days after the 60th anniversary of the start of the Berlin Airlift. Brookley Field was the base from which C-54 transport aircraft supported the airlift.

Northrop Grumman's facility is scheduled for completion and initial operation late next year – unless Boeing's appeal is upheld.

Pending the GAO ruling, the Air Force ordered Northrop to stop all work on the tanker program.

In a conference call with analysts and media to report earnings, Air Canada says Boeing has told the airline that its 787s will be up to 30 months late.

Montie Brewer, chief executive of Air Canada, said Thursday that initial deliveries of the 37 Dreamliners the airline has ordered ordered won't begin until early 2012 -- about 24 months late. And some of the 787s will be up to 30 months late, he said.

And ILFC, the biggest single customer for the 787, said in an SEC filing Thursday its planes will be at least 27 months late.

The Dreamliner program is about 15 months behind schedule, and the first planes that were supposed to be delivered this month have slipped until the third quarter of 2009. Boeing has said it is working with individual airlines about new delivery dates.

Brewer said Air Canada will be seeking compensation from Boeing over the delays.

Air Canada had been an Airbus customer for its long-haul needs until switching to Boeing's 777 a few years ago. It then ordered the 787.

The 777-200, according to Air Canada, burns about 15 percent less fuel per seat than the Airbus A340 it replaced.

UPDATE:

Here is my story, which will be posted online soon.

BY James Wallace
P-I aerospace reporter

Although The Boeing Co.'s 787 Dreamliner may be only 15 months or so behind schedule, delivery delays will be as much as twice that long for some customers that bought the fuel-efficient composite jet.

The extend of the delivery delays, which likely will cost Boeing several billion dollars in penalty payments, became more apparent Thursday when two important 787 customers disclosed just how late their planes will be.

In a filing with the Securities and Exchange Commission, the parent of International Lease Financial Corp., the single biggest customer for the 787 with 74 on order, disclosed that its planes will be delayed "an average in excess of 27 months per aircraft and span across ILFC's entire order."

The leasing giant, one of Boeing's most important customers, was supposed to have taken delivery of its first Dreamliners in 2010, but does not expect the first planes to be available until at least 2012.

Also Thursday, Air Canada said its 787s will be anywhere from 24 to 30 months late.

In a conference call with media and analysts to report earnings, Air Canada Chief Executive Montie Brewer said Boeing recently informed the airline about its new 787 delivery schedule. Air Canada has 37 Dreamliners on order.

The airline probably won't get its first Dreamliner until January 2012, rather than in 2010 as initially promised, Brewer said.

For airlines, late delivery of the 787 means they must find other planes for their networks to make up for the 787 capacity they were counting on. And with fuel prices at record highs, airlines will end up paying more for fuel because the fuel-efficient 787 won't be in their fleets.

Brewer said in the conference call that Air Canada was fortunate because it has been taking delivery of new 777s from Boeing. It has a younger fleet than many airlines.

"Just imagine if we were like other carriers that haven't brought in a new efficient fleet to weather this storm,'' he said. Still, Air Canada will park some of its older, fuel-guzzling jets, he said.

The 777, according to Air Canada, burns about 15 percent less fuel than the four-engine Airbus A340 that the airline previously operated.

Brewer said Air Canada will demand compensation from Boeing because of the 787 delays. He did not give a figure. But he did say Air Canada will experience capacity issues in 2010 when the 787s don't show up.

Some industry analysts are forecasting that the 787 delays could end up costing Boeing as much as $4 billion or more in penalty payments. Boeing has said it does not yet know those costs. But the issue is complex. All Nippon Airways, the initial launch customer for the 787, is reportedly in talks with Boeing about using new 767s to meet its interim lift needs until its 787s start showing up. Those 767s could be a substitute for actual penalty payments, according to a person with knowledge of the matter.

Boeing has said it is in talks with a number of airlines about how to help them meet capacity requirements because of the 787 delays.

All Nippon Airways was supposed to take delivery of its first Dreamliner this month. Boeing recently said first deliveries won't begin until the third quarter of 2009.

But Boeing is also drastically cutting 787 production, which accounts for why some customers won't get their planes for two years or more from the original delivery date.
Boeing had planned to delivery 112 Dreamliners by the end of 2009. Instead it will deliver just 25. Boeing is also ramping up production much more slowly than first planned. Rather than hitting a production goal of 10 planes a month in 2010, that won't happen until 2012.

In a conference call last month to report on earnings , Boeing Chairman and Chief Executive Jim McNerney was asked how many of the 900 Dreamliners that Boeing has sold will be late. "We are still working through what the impact will be,'' McNerney said then. "But we don't see a scenario where all 900 would be delivered late.''

Despite three delays that have pushed first flight of the plane from late August of 2007 until the fourth quarter of this year, the cutting-edge jet continues do well in the market place. Boeing has sold 79 Dreamliners this year and said it expects to have more than 1,000 orders by the time the first planes are delivered.

Boeing updates its order totals every Thursday, and while it did not have any new 787 orders in the last week, it did have 32 more orders for other models – 26 737s as well as six 777s.

For the year, Boeing has 378 net orders. The net figure includes cancellations. That puts Boeing only slightly behind Airbus, which through April 30 had won net orders for 397 planes.

Capped by a record 2007, Boeing has sold more than 1,000 planes each of the last three years. Boeing won gross orders for 1,423 planes last year. That was 373 more than it sold in 2006, which had been its best year ever.

Boeing had 1,413 net orders in 2007. But Boeing is predicting a more normal sales year in 2008, as is Airbus. Boeing has said orders could be half what they were in 2007, though that still would be considered a good year.

Airbus has said it expects to sell around 700 jets in 2008. Airbus beat Boeing in gross sales last year, but its net total was 1,341 planes.

Boeing beat Airbus in orders in 2006 for the first time since 2000.

5th Dreamliner now in final assembly. Boeing photo.

After moving the static test plane out of the factory earlier this week, Boeing announced Thursday it has started final assembly on the fifth 787, whch will be the third of the flight test planes.

Below is the Boeing news release.

EVERETT -- Final assembly began today on the third flight-test airplane for the all-new Boeing 787 Dreamliner.

This is the fifth Dreamliner to be loaded into the first position of the 787 production system. The static test airframe moved April 25 from the Final Assembly to its test rig in another bay of the Everett, Wash.-based factory. Both the fatigue test airframe and the second flight-test airplane have advanced to the next position in production, where assembly and systems installation work continues.

"We are receiving assemblies that are much more complete," said Jack Jones, vice president of 787 Final Assembly and Change Incorporation. Jones replaces Steve Westby, who retired from Boeing yesterday after a 31-year career. "The second flight-test airplane had a 50 percent reduction in the amount of incomplete work as compared to the first airplane. 'Traveled work' on this airplane is 65 percent less than on the first."

After assembly is complete, this airplane will be fitted with an interior as part of the comprehensive flight-test program and certification process.

"When that happens this summer, it will be the first time we'll see the 787 in what is close to a final delivery configuration," Jones said.

The first airplane to fly is on track for "power on" in June.

Around the world, 25 airplanes are in various stages of production. This number includes the static and fatigue airframes, which will not be delivered to customers. Since its launch in April 2004 the 787 Dreamliner has amassed nearly 900 firm orders valued at $151 billion from 58 airlines.

Admid rumors that Airbus won't deliver as many A380s this year
as expected, Airbus has announced that it is conducing a "a major review" of its delivery schedule.

Here is part the Associated Press report.

Speaking at a company site in the United Arab Emirates, CEO Thomas Enders acknowledged that the goal of delivering four A380s per month by 2010 won't be easy.

The review is "standard practice" at this stage in the plane's development, he said.

"We're currently conducting a major review" of the program, Enders said at the opening of an Airbus material and logistics center in Dubai, headquarters of A380 customer Emirates Airlines.

His comments were relayed by Airbus spokesman Stefan Schaffrath. The spokesman withdrew earlier comments saying Airbus is "confident more than ever" about the program that he had attributed to Enders.

Airbus has previously said it is committed to handing over 13 A380s in 2008, 25 in 2009, and 45 in 2010.

Airbus is reviewing whether workers and suppliers are ready for the change from individual plane production to full industrialization, and whether the delivery schedule can be maintained, Schaffrath said.

Airbus has delivered the first four of six superjumbos destined for Singapore Airlines. The European plane maker will have to redesign cabins and electrical layouts for Emirates Airlines and Qantas.

Enders said in October that increasing A380 production is Airbus' greatest challenge for the coming years. The workload of making one A380 is equivalent to eight of the single-aisle A320, Airbus' most popular jet.

I was at Boeing's annual meeting in Chicago Monday, where afterwards I asked Boeing Chairman and CEO Jim McNerney about reports the Air Force is upset with Boeing over its harsh words about the tanker competition.

Here is my story:

CHICAGO – Boeing Chairman and Chief Executive Jim McNerney knows a thing or two about rough play. He played hockey in college and still enjoys mixing it up on the rink with friends.

But Boeing will try and avoid throwing any "needless sharp elbows" in its disagreement with the U.S. Air Force over the tanker decision, McNerney said here Monday.

He made it clear, though, that he is not backing away from his belief that the tanker selection process was flawed and Boeing was right to protest.

Speaking to reporters after Boeing's annual meeting, McNerney was asked about a recent meeting the Air Force called with him and Northrop CEO Ron Sugar. Northrop, which teamed with Airbus parent EADS, won the competition to supply the Air Force with air-refueling tankers.

The Air Force met with McNerney and Sugar out of concern about the nasty tone of the public debate since the February decision.

Boeing had been widely expected to win the competition with its 767 tanker, and it has protested the Air Force decision with the General Accountability Office.

"The meeting was about reminding us that we are all going to be friends when this is over," McNerney said. "We are still going to be dependent on each other. And I thought it was a very appropriate meeting. Sometimes sharp elbows happen in the midst of competition and a protest of a competition."

continue reading

Static test plane being moved. Boeing photo.

Boeing announced Friday evening it has moved the 787 static test airframe from its final assembly bay in Everett to its structural test rig, which is located about 1,000 feet away.

Here is part of the Boeing news release:

Some assembly remains to be completed on the static airframe. That work will be completed concurrently with test set-up. Test set up is expected to begin immediately, with tests commencing this summer.

"During static tests we apply loads to the airplane structure to simulate both normal operation as well as extreme flight conditions," said Randy Harley, vice president of Engineering & Technology for the 787 program. "We monitor the airplane to confirm analytical predictions and make sure the structure holds up to these conditions."

Movement of the static airframe clears the way to begin assembly of the third 787 to enter the flight test program. Most pieces of the third airplane arrived in Everett earlier this month. All assemblies for Airplane #3 are now in Everett, and the airplane will be loaded into the first position of Final Assembly early next week.

The Wall Street Journal has a readable piece on Boeing Chairman and CEO Jim McNerney, including a recent interview. The 787 will determine his legacy as CEO of the company, according to the article.

Because Mr. McNerney inherited the Dreamliner program after it was well under way, few are holding him responsible for its problems. But they are watching closely how he responds. Charlie Smith, chief investment officer with Fort Pitt Capital Group, said investors look at the Dreamliner program as a "once-in-a-generation" event. "No matter what other successes Jim McNerney has at Boeing, he will be judged on how he handles the 787. He's either going to win big or lose big," he said.

On Monday, McNerney will face investors at Boeing's annual meeting in Chicago. I'll be attending and will file a story after the meeting.

You can read the WSJ piece here.

One of my recent blog entries was about the July 8 rollout date for the 787 and whether trying to meet that date set the program back since the plane that was shown to the public was essentially a hollow shell -- and Boeing has struggled to complete the work of its partners ever since.

McNerney, in the Wall Street Journal article, offered this assessment of the July 8 rollout

"In retrospect, if we had it on a slightly different timing, we might be a little bit ahead of where we are today.''

Despite delays of its prized 787 Dreamliner that now stretch some 15 months, The Boeing Co. said Wednesday it expects to have sold more than 1,000 by the time airlines get their first jets in the third quarter of next year.

The firm order count now stands at 892.

Boeing Chief Financial Officer James Bell made the prediction during the company's call with analysts and media to discuss first-quarter earnings.

But the outlook for another Boeing plane in development, the 747-8, is not so clear.
Boeing Chairman and Chief Executive Jim McNerney acknowledged he would like to see more orders for the passenger version of the bigger and more efficient jumbo jet. Only 24 of the 110 orders are for the passenger version, known as the Intercontinental. The rest are for the freighter.

So far, Lufthansa is the only airline to order the Intercontinental.

McNerney said Boeing is in "serious" discussions with some eight to 10 major carriers about the Intercontinental.

"I think there is a good chance we will have some (new orders) soon," he said of the Intercontinental.

He was asked about the 748-8, and why Boeing is spending several billion dollars more than anticipated on the plane's development, during the conference call to discuss Boeing's earnings.

I'll have more of the first-quarter earnings conference call later.

Here is the AP report.

Aviation Week has a good interview this week with a key 787 supplier, Hamilton Sunstrand President David Hess.

He has an interesting take on why the untested 787 production system had a meltdown. In meeting the July 8 rollout date, Boeing rushed production of the first plane, Hess told the publication.

Here are some excerpts from the article:

After key suppliers fell behind, "they panicked a little bit and rather than follow the logistics plan that they had planned on where everything gets delivered to the structure partners … they said, 'Everybody just send your stuff here. So bang, tens of thousands of parts ended up on the factory floor without any documentation or traceability. They had to start putting a jigsaw puzzle together without any directions."

Hess says the problem cascaded because 787 managers didn't realize how long it would take to dig out of the mess, a process that included documenting components and creating drawings needed to satisfy FAA certification requirements. "They continued to underestimate how tough it was to recover from Airplane 1," he says. "If you look behind that, [airplanes] 2, 3 and 4 are all starting to flow now. But they've still got to get Airplane 1 in the air."

Still, he predicts Boeing's much-maligned supply chain model will be proven out in the long run. "It will take them a little while to get it ramped up and synchronized," he says. "But once they get to that point, I think it will be a big benefit to them."

In a December interview with Boeing jetliner boss Scott Carson, I asked him if trying to meet the July 8 rollout date triggered the 787 production mess, which at the time was only six months late. Now it's at least 15 months late. Here was Carson's answer:

"It wasn't a mistake,'' he said of the July 8 date. "It was, at the time, viewed by all of us as the right thing to do. With twenty-twenty hindsight it is an interesting thing to speculate about. I don't know that it would have had an impact on where we found ourselves in October (when the first delay was announced). That was tied to what was going on in our supply partner factories at that point and what the implications were for us in our factory. I don't think (the rollout date) affected (the delay) much one way or another.''

Boeing, as expected, on Wednesday announced the third major delay of its 787 Dreamliner.

Executives will give a detailed update on the program shortly and I'll have complete coverage afterward.

Boeing pushed back first flight by at least three months, and postponed first deliveries by about six months.

First flight won't come until the fourth quarter of this year, rather than June.

The first 787 delivery, to Japan's All Nippon Airways, will take place in the third quarter of next year.

"Our revised schedule is built upon an achievable, high-confidence plan," Boeing Commercial Airplanes Chief Executive Scott Carson said in a statement.

Boeing expects to deliver only 25 jets by the end of 2009, less than a quarter of its previous plan to deliver 109.

ANA just e-mailed me the following response:

We are extremely disappointed: this is the third delay in the delivery of the first aircraft, and we still have no details about the full delivery schedule. We would urge Boeing to provide us with a 120% definitive schedule as soon as possible."

As it is night time in Japan we will not be able to get comment from our executives until morning. Thank you for your understanding.

This is the Boeing news release:

EVERETT, Wash., April 09, 2008 -- Boeing [NYSE: BA] today announced a revised plan for first flight and initial deliveries of the 787 Dreamliner that includes additional schedule margin to reduce risk of further delays on the program.

While significant progress has been made assembling Airplane #1, first flight is being rescheduled due to slower than expected completion of work that traveled from supplier facilities into Boeing's final assembly line, unanticipated rework, and the addition of margin into the testing schedule. The new delivery schedule is based on a more conservative production plan developed with the 787 partner team. That schedule now targets approximately 25 deliveries in 2009.

First flight of the all-new airplane will move into the fourth quarter of this year rather than the end of the second quarter, and first delivery is now planned for the third quarter of 2009 instead of first quarter.

Company officials expressed confidence in the new plan and the steps being taken to accelerate program performance.

"Over the past few months, we have taken strong actions to confront and overcome start-up issues on the program, and we have made solid progress," said Boeing Commercial Airplanes President and CEO Scott Carson. "Nevertheless, the traveled work situation and some unanticipated rework have prevented us from hitting the milestones we laid out in January. Our revised schedule is built upon an achievable, high-confidence plan for getting us to our power-on and first-flight milestones. Also, while the fundamental technologies and design of the 787 remain sound, we have inserted some additional schedule margin for dealing with other issues we may uncover in testing prior to first flight and in the flight test program."

The company said in January it would be conducting a comprehensive assessment of its supply chain and production system capabilities to determine the details of the 787's flight test program and initial delivery profile. As a result of that assessment, the first-year delivery plan announced today will be followed by a more gradual ramp up to full-rate production than previously planned.

"We deeply regret the disruption and disappointment these changes will cause for our customers, and we will work closely with each of them to minimize the impact," said Carson. "We have taken significant action to improve supply chain and production system performance, such as our investment in Global Aeronautica, but based on our assessment, the prudent course is to proceed with a more gradual ramp up to full-rate production."

Pat Shanahan, 787 vice president and program manager, echoed Carson's comments about the progress being made in 787 factories.

"The work that remains to be done on Airplane #1 is well defined, and we can see our way to -- and have confidence in -- the new milestones we have set for it," said Shanahan. "We have addressed the major challenges that slowed our progress while trying to complete the primary structure -- the parts shortages, engineering changes, and manufacturing changes -- and we are well into the systems installation that is the precursor to putting power on the airplane for the first time. We have also worked closely with our partners to achieve higher levels of completion of their parts of subsequent airplanes, and we will continue to drive improvements in the supply chain and production system performance," he said.

For tracking program progress, Shanahan outlined a series of milestones that will occur before June 30: 787 static and fatigue structural test airplanes will move to their testing locations; Airplanes #3 and #4 will enter final assembly; hardware airworthiness qualifications will be complete; and power on will be achieved.

Shanahan also said the program has changed the timing of the introduction of two 787 derivatives. The 787-9, a larger variant of the airplane, will be the first derivative of the baseline 787 with delivery planned for early 2012. The 787-3, a shorter-range model previously slated to deliver in 2010, will now become the second derivative of the airplane family.

While research and development costs will likely increase as a result of the 787 schedule change, Boeing expects no change to 2008 earnings guidance. The company continues to expect strong earnings per share growth in 2009 and will provide complete 2009 financial guidance when it holds its first-quarter 2008 earnings conference call later this month. The outlook for the company's defense business and in-production commercial airplane programs remains strong.

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Boeing will update the status of the 787 program on Wednesday, in a conference call with Scott Carson, commercial jet boss, and Pat Shanahan, 787 program chief.

Boeing will announce at least another 6-month delay, according to my sources.

UPDATE:

Here is my story, which will be posted online soon.

By James Wallace
P-I aerospace reporter

The Boeing Co. will likely announce a delay of at least six more months for the 787 Dreamliner when executives provide an update on the program this week, according to a person with knowledge of the matter.

That would push the program back some 14 months from its original schedule, which had the first Dreamliners being delivered to airlines next month.

Boeing is now approaching the same kinds of delays with the 787 that Airbus experienced with its double-decker A380, which was more than a year and half late.

Another 787 delay has been widely expected. Several industry analysts as well as the biggest customer for the plane have all predicted in recent weeks that Boeing would announce a delay of anywhere from six to nine months when it next updated the 787 program.

Boeing said Monday that update, for analysts and media, will come Wednesday, during a conference call with Scott Carson, chief executive and president of Boeing Commercial Airplanes, and Pat Shanahan, vice president of the 787 program.

This will be the third major delay that Boeing has announced on the 787, and industry analysts say the company can't afford a fourth.

The update call "will be critical for Boeing to rebuild credibility" Douglas Harned of Bernstein Research said in a recent note to clients.

"It will be important for management to lay out a timeline of milestones, describe the path to meet those milestones and ensure that progress is visible to investors and customers," he wrote.

Two of those milestones are what's known as "power on" and first flight.

Boeing announced the first delay of six months in October of last year. In January, Boeing announced another delay, this one of three months. At the time, Boeing said "power on" would probably not occur until early in the second quarter, with first flight slipping to the end of June. The 787 was originally supposed to have flown for the first time in late August or early September of 2007.

The "power on" milestone is significant because it means enough of the 787 systems and wiring have been installed so the first plane can operate under its on power.

In addition to laying out a new schedule for "power on" and first flight when it holds the 787 conference call, Boeing will also provide a new 787 delivery schedule.

Since early this year, Boeing has been working closely with its 787 partners to better understand how quickly they can ramp up production.

Boeing has already acknowledged that it will not be able to deliver 109 planes as promised by the end of next year. Given another delay of at least six months, it is unlikely that Boeing will be able to delivery even half that many in 2009.

The 787 program delays are the result of mostly production-related issues, including a shortage of parts such as fasteners.

But there are also design issues. Boeing acknowledged last month, following public comments by Steven Udvar-Hazy, founder and chairman of International Lease Finance Corp., and the biggest 787 customer, that it will have to strengthen the center wing box, which is the key structure where the wings are attached to the fuselage. The center wing box also holds fuel.

The biggest driver of the 787 delays remains Boeing's global partners. They manufacture the composite wings and fuselage of the Dreamliner, and are supposed to install wiring and systems. Boeing is mostly responsible for final assembly of those large sections at its Everett plant.

One of those partners, Vought Aircraft Industries, has had the most problems in meeting 787 production requirements. Late last month, Boeing announced it is buying out Vought's share of Global Aeronautica in Charleston, S.C. This is a joint venture with Alenia Aeronautica, another key 787 partner.

The Charleston facility is the 787 fuselage assembly hub, where fuselage sections made by Vought, Alenia and the Japanese are joined together before being flown to Everett for final assembly.

By buying out Vought's share and taking a direct role in Global Aeronautica, Boeing is betting that it will be able to get the 787 program back on track.

Another day, and more exchanges between Boeing and Northrop on the tanker controversy.

Boeing on Thursday said the Air Force had found, in its evaluation, fewer weakness with the 767 than with the KC-30 tanker offered by Northrop and EADS. The Air Force review identified 98 strengths and only one weakness with the 767, according to Boeing. That same Air Force review found only 30 strengths but five weakness for the KC-30, according to Boeing.

After Boeing issued a press release, and its tanker boss, Mark McGraw held a teleconference with media, Northrop quickly responded.

Northrop said "we continue to be surprised by the language being used by Boeing that suggests" the Air Force did not run a fair competition.

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Northrop just announced that the Government Accountability Office has
denied motions filed by it and the Air Force calling for a partial dismissal of Boeing's protest of the tanker decsion.

Northrop says the denial of its motion came "after a supplemental filing by Boeing
Corporation that streamlined its original protest and eliminated many of the
elements that were central to the Air Force and Northrop Grumman motions.''

It's not clear what Boeing may have removed from its original filing.

"Boeing's decision to abandon the public relations rhetoric contained in
its original protest filings is in keeping with our motion," said Randy
Belote, Northrop Grumman vice president of corporate and international
communications. "We are encouraged that the company has streamlined its
approach. We remain convinced that the Air Force process that led to Northrop
Grumman's selection was fair, open and transparent, and we look forward to
assisting the Air Force defend its selection decision before the GAO."

UPDATE:

Boeing says it has no idea what Northrop is talking about. This is the Boeing response.

We have no idea of the basis of the Northrop Grumman statement. We continue to press every ground in our original appeal. We have neither abandoned nor narrowed any ground. In fact, our supplemental filings have added additional grounds to our original filing based on the information we have received from the Air Force since filing our protest on March 11. Any assertion to the contrary is a blatant attempt to misrepresent the facts.

Boeing also had this to say about the GAO denial of the Northrop and Air Force motions:

The GAO has denied both the Air Force's and Northrop Grumman's motions to dismiss our claims. This decision is consistent with our view that full consideration of all appeal grounds is warranted. We view today's decision by the GAO as a significant development in our appeal of the tanker decision.