Boeing Dreamliner flies after two years of delays
Boeing Co's new lightweight carbon and titanium Dreamliner lifted off a runway for the first time into cloudy skies on Tuesday after more than two years of delays.
The 787 Dreamliner's highly anticipated flight was witnessed by several thousand Boeing employees, industry VIPs, airplane enthusiasts and reporters, but excitement and relief rippled throughout the aerospace industry.
This really sends the message that this is a real aircraft. It'll take time but this provides badly needed stability for the program, said Richard Aboulafia, aerospace analyst at research firm Teal Group.
Given the endless delays and the original somewhat premature roll-out, Boeing needed to show that it had a real live performing aircraft on it's hands, Aboulafia said.
The plane, which Boeing has said will save airlines million of dollars in fuel and maintenance costs, has been hampered by a shortage of bolts, faulty design and a two-month strike at its factory.
Airlines like the concept of the mid-sized plane that can carry some 250 very long distances. They have ordered 840 of the aircraft, worth about $140 billion, since 2004, when work began on the plane.
(To see a graphic of the plane's materials, go to http://graphics.thomsonreuters.com/RNGS/DEC/787.jpg)
But production has been delayed five times in the past three years, and the first flight has been postponed six times, stretching customers' patience.
Rival Airbus, a unit of Europe's EADS, has been attracting buyers for its competing A350 plane, which will also be made primarily from carbon-composite materials.
Exactly how much profit Boeing can expect to make from the plane is uncertain. Analysts have said the company has invested more than $10 billion in the project, and will have to give some sort of compensation to customers for late planes. How late the planes will be, and how they will perform will not be known until flight tests have been completed.
It's a major step-off point to the ultimate goal which is certification and customer delivery. It's an important milestone but it's not the end goal, Clay Jones, chief executive of Rockwell Collins, told the Reuters Aerospace & Defense Summit in Washington.
Rockwell makes display systems, communications and surveillance systems and pilot controls systems for the 787.
Shares of Boeing, a Dow component, were down 59 cents, or 1.05 percent, at $55.46 on the New York Stock Exchange. The company's shares have risen about 90 percent since March, outstripping the rebound in the Standard & Poor's 500 index.
ROUND-THE-CLOCK TESTS
The four-hour test flight of the Dreamliner, painted with Boeing's blue and white logo, began at Paine Field adjacent to its factory in Everett 30 miles north of Seattle. It will fly around the Puget Sound and inland Washington state. The aircraft will land at Boeing Field in Seattle.
The flight begins at least nine months of airborne tests that will involve six 787s running around the clock, which Boeing executives have said will be like running a small airline.
But its two test pilots will push the plane well beyond limits expected in ordinary commercial flights, practicing mid-air stalls, dives and steep banks, as well as seeking out extremes of heat and cold.
It certainly takes one more element of uncertainty out of the mix, said Scott Kuechle, chief financial officer at Goodrich Corp, at the Reuters Summit. Goodrich makes systems such as thrust reversers and brakes for the Dreamliner.
Kuechle said Goodrich investors have been obsessed with the 787 in recent years and that delays have been frustrating. But he said he never doubted the 787 would fly.
It's just one more milestone along the way, Kuechle said.
Boeing has said the first 787 should be delivered to Japan's All Nippon Airways in the fourth quarter of next year, more than two years after the original target of May 2008. But analysts agree that test flights will take more than a year.
NEW ISSUES
The plane has been beset by problems partly because of the new materials being used and extensive outsourcing.
Early delays were due to shortages of parts and the difficulties of bringing together fuselage and wing structures from Japan, Italy and elsewhere in the United States, aggravated by a two-month strike last year.
The most recent delay was potentially more serious, as Boeing needed to reinforce the side of the plane where the wing meets the fuselage.
The revolutionary use of carbon fiber and the problems of joining it to other materials mean there is still plenty of risk that Boeing's new plane will hit new snags in the air.
Just as they (Boeing) found hurdles on the way to first flight, they are going to find hurdles on the way to certification, said Aboulafia.
(For a graphic of Boeing's share price and 787 development, see http://link.reuters.com/nud76g)
Even a successful flight on Tuesday could trigger a sell-off, said analyst Robert Spingarn at Credit Suisse.
We think this catalyst is largely priced in and are sellers on event, he wrote in a research report on Monday.
(Reporting by Kyle Peterson and Bill Rigby; Additional reporting by John Crawley and Deepa Seetharaman)
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