Blow for British Airways as Dreamliner suffers further delays

http://business.timesonline.co.uk/to...cle3708982.ece

From The Times
April 9, 2008
Blow for British Airways as Dreamliner suffers further delays
The Dreamliner has taken orders worth more than $150 billion

The Dreamliner has taken orders worth more than $150 billion
David Robertson

Boeing is expected to announce today that its 787 Dreamliner has been
delayed by 18 months, a setback that will cost the company billions of
dollars in compensation to airlines.

Sources close to Boeing said the American aerospace giant will admit
that the revolutionary aircraft is unlikely to enter service until the
end of 2009.

The Dreamliner has taken orders worth more than $150 billion (£76
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.
Related Links

* Technology heightens risk of hijacking

* Boeing cuts forecasts again on Dreamliner woes

* Boeing risks defections as Dreamliner delayed

The likely victim will the 787-3, a high passenger density model
designed for the Japanese market. The 787 is a radical new design
because its fuselage is entirely made out of composite materials --
essentially carbon fibre. Boeing has struggled to assemble the
aircraft due to its complexity and it has yet to fly.

The delay will affect all airlines that have ordered the 787,
including British Airways and Virgin Atlantic. The delay is
particularly bad for BA as it means the British flag carrier might not
get the aircraft in time for the 2012 Olympics. BA needs the 787 to
increase capacity and reduce operating costs.

Airlines are likely to demand billions in compensation from Boeing and
the company will also have to allocate huge resources to prevent the
problems worsening. Its share price has already fallen 25 per cent
since the 787 delays were first announced, wiping more than $18
billion from Boeing's value. Senior executives are expected to face
calls to resign. Doug McVitie, managing director of Arran Aerospace,
the aviation industry analyst, said: "This is a massive blow to
Boeing's credibility because it is drip feeding bad news, which gives
the impression it does not have a handle on the problems."

Boeing said it would give an update on the programme today.

Airbus has had the exact same issue with the A380. It's obviously
part of the business. You market to get orders, price in delays, and
go from there. Where else do the airlines go? To Cessna?


On Wed, 9 Apr 2008 00:00:14 -0700 (PDT), Spider Pig
wrote:

http://business.timesonline.co.uk/to.../engineering/=
article3708982.ece

=46rom The Times
April 9, 2008
Blow for British Airways as Dreamliner suffers further delays
The Dreamliner has taken orders worth more than $150 billion

The Dreamliner has taken orders worth more than $150 billion
David Robertson

Boeing is expected to announce today that its 787 Dreamliner has been
delayed by 18 months, a setback that will cost the company billions of
dollars in compensation to airlines.

Sources close to Boeing said the American aerospace giant will admit
that the revolutionary aircraft is unlikely to enter service until the
end of 2009.

The Dreamliner has taken orders worth more than $150 billion (=A376
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.
Related Links

* Technology heightens risk of hijacking

* Boeing cuts forecasts again on Dreamliner woes

* Boeing risks defections as Dreamliner delayed

The likely victim will the 787-3, a high passenger density model
designed for the Japanese market. The 787 is a radical new design
because its fuselage is entirely made out of composite materials --
essentially carbon fibre. Boeing has struggled to assemble the
aircraft due to its complexity and it has yet to fly.

The delay will affect all airlines that have ordered the 787,
including British Airways and Virgin Atlantic. The delay is
particularly bad for BA as it means the British flag carrier might not
get the aircraft in time for the 2012 Olympics. BA needs the 787 to
increase capacity and reduce operating costs.

Airlines are likely to demand billions in compensation from Boeing and
the company will also have to allocate huge resources to prevent the
problems worsening. Its share price has already fallen 25 per cent
since the 787 delays were first announced, wiping more than $18
billion from Boeing's value. Senior executives are expected to face
calls to resign. Doug McVitie, managing director of Arran Aerospace,
the aviation industry analyst, said: "This is a massive blow to
Boeing's credibility because it is drip feeding bad news, which gives
the impression it does not have a handle on the problems."

Boeing said it would give an update on the programme today.

John Kulp wrote:
Airbus has had the exact same issue with the A380. It's obviously
part of the business. You market to get orders, price in delays, and
go from there. Where else do the airlines go? To Cessna?


There is one significant difference with the 787. The A380 had a really
stupid software problem in germany. Once they fessed up that it was
corporate politics that had cause germany to refuse the catia 5, the
installed catia 5 and applied their wiring plans to the real dimensions
of the aircraft and are now ramping up production at the originally
planned rate. Once the 10 month exclusivity negitiated by Singapore
lapses in august, you'll see A380s being delivered regularly.

In the case of Boeing, it was revealed today that they will not be able
to ramp up production to the originally expected rate until sometime
during 2012. (10 per month, 3 das per aircraft).

So for Boeing, it isn't just a delay in first delivery, it won't be able
to ramp up production to the planned for 10/month until 2012, so the
delays to airlines will increase until the 10/month is reached. For the
380, Airbus hopes to catch up before the 190 orders are delivered.

On Wed, 09 Apr 2008 18:47:20 -0400, John Doe wrote:

John Kulp wrote:
Airbus has had the exact same issue with the A380. It's obviously
part of the business. You market to get orders, price in delays, and
go from there. Where else do the airlines go? To Cessna?


There is one significant difference with the 787. The A380 had a really
stupid software problem in germany. Once they fessed up that it was
corporate politics that had cause germany to refuse the catia 5, the
installed catia 5 and applied their wiring plans to the real dimensions
of the aircraft and are now ramping up production at the originally
planned rate. Once the 10 month exclusivity negitiated by Singapore
lapses in august, you'll see A380s being delivered regularly.

There's more than one. There is a much much larger market for the 787
than the A380. No comparison at all. In fact, it is quite unlikely
that the A380 will ever make money.


In the case of Boeing, it was revealed today that they will not be able
to ramp up production to the originally expected rate until sometime
during 2012. (10 per month, 3 das per aircraft).

Where? I haven't seen this reported anywhere.


So for Boeing, it isn't just a delay in first delivery, it won't be able
to ramp up production to the planned for 10/month until 2012, so the
delays to airlines will increase until the 10/month is reached. For the
380, Airbus hopes to catch up before the 190 orders are delivered.

Catch up with what? They are in two totally different markets. The
787 is sure to make tons of money where it is doubtful that the A380
will ever turn a penny.

John Kulp wrote:
There's more than one. There is a much much larger market for the 787
than the A380. No comparison at all. In fact, it is quite unlikely
that the A380 will ever make money.

The larger market, and HUGE order book for the 787 make the delay a MUCH
bigger problem to manage with far more compensation demands from the 60
or so customers of the 787.


In the case of Boeing, it was revealed today that they will not be able
to ramp up production to the originally expected rate until sometime
during 2012. (10 per month, 3 das per aircraft).

Where? I haven't seen this reported anywhere.

Gosub the boeing investor web site and listen to the webcast.
25 aircraft on 2009. No hard numbers on 2010-2011 deliveries (although
alluded at 75 for 2010), and mentioned that by 2012, they will finally
be able to reach the original 10 aircraft per month rate. (to have
originally been reached by end of 2008).


Catch up with what? They are in two totally different markets. The
787 is sure to make tons of money where it is doubtful that the A380
will ever turn a penny.


Catch up with delivery commitments written in contracts with customers.
When Boeing doesn't deliver an aircraft on time, the customer demands
financial compensation. Boeing has 892 aircraft to deliver, and if all
of them are to be delivered late, that means a LOT of penalties for
Boeing to pay.

Boeing had originally expected to have 10/month rate by the end of 2008.
It won't be until Boeing exceed the 10/month rate that it will able abl
eto start to reduce the delays and catch up to the original delivery
commitments. And Boeing won't reach the original rate of 10 before 2012.


In fairness, not all 892 aircraft are to be delivered "as soon as
possible". Some airlines have deliveries that go up to 10 years in the
future, so those aircraft probably won't be delevered late. The firtsher
one goes into the futire, the more spare production slots existed in the
original order book, and that will allow Boeing to catch up on the delays.

On 10 Apr, 08:00, John Doe wrote:
John Kulp wrote:
There's more than one. There is a much much larger market for the 787
than the A380. No comparison at all. In fact, it is quite unlikely
that the A380 will ever make money.

The larger market, and HUGE order book for the 787 make the delay a MUCH
bigger problem to manage with far more compensation demands from the 60
or so customers of the 787.

In the case of Boeing, it was revealed today that they will not be able
to ramp up production to the originally expected rate until sometime
during 2012. (10 per month, 3 das per aircraft).

Where? I haven't seen this reported anywhere.

Gosub the boeing investor web site and listen to the webcast.
25 aircraft on 2009. No hard numbers on 2010-2011 deliveries (although
alluded at 75 for 2010), and mentioned that by 2012, they will finally
be able to reach the original 10 aircraft per month rate. (to have
originally been reached by end of 2008).

Catch up with what? They are in two totally different markets. The
787 is sure to make tons of money where it is doubtful that the A380
will ever turn a penny.

Catch up with delivery commitments written in contracts with customers.
When Boeing doesn't deliver an aircraft on time, the customer demands
financial compensation. Boeing has 892 aircraft to deliver, and if all
of them are to be delivered late, that means a LOT of penalties for
Boeing to pay.

Boeing had originally expected to have 10/month rate by the end of 2008.
It won't be until Boeing exceed the 10/month rate that it will able abl
eto start to reduce the delays and catch up to the original delivery
commitments. And Boeing won't reach the original rate of 10 before 2012.

In fairness, not all 892 aircraft are to be delivered "as soon as
possible". Some airlines have deliveries that go up to 10 years in the
future, so those aircraft probably won't be delevered late. The firtsher
one goes into the futire, the more spare production slots existed in the
original order book, and that will allow Boeing to catch up on the delays.

hehe

On Thu, 10 Apr 2008 02:00:14 -0400, John Doe wrote:

John Kulp wrote:
There's more than one. There is a much much larger market for the 787
than the A380. No comparison at all. In fact, it is quite unlikely
that the A380 will ever make money.

The larger market, and HUGE order book for the 787 make the delay a MUCH
bigger problem to manage with far more compensation demands from the 60
or so customers of the 787.

Not really. You have many more orders to spread them over. It will
amount to a lot of money for sure, but not percentage wise when they
are spread. Boeing has said, I believe, that they expect no change in
their earnings guidance.



In the case of Boeing, it was revealed today that they will not be able
to ramp up production to the originally expected rate until sometime
during 2012. (10 per month, 3 das per aircraft).

Where? I haven't seen this reported anywhere.

Gosub the boeing investor web site and listen to the webcast.
25 aircraft on 2009. No hard numbers on 2010-2011 deliveries (although
alluded at 75 for 2010), and mentioned that by 2012, they will finally
be able to reach the original 10 aircraft per month rate. (to have
originally been reached by end of 2008).

I will take a look.



Catch up with what? They are in two totally different markets. The
787 is sure to make tons of money where it is doubtful that the A380
will ever turn a penny.


Catch up with delivery commitments written in contracts with customers.
When Boeing doesn't deliver an aircraft on time, the customer demands
financial compensation. Boeing has 892 aircraft to deliver, and if all
of them are to be delivered late, that means a LOT of penalties for
Boeing to pay.

Again, spread over this many orders, barring further delays, it is
unlikely to be that much. The A380 problem is that they likely don't
even have enough orders in total to make money in the first place.


Boeing had originally expected to have 10/month rate by the end of 2008.
It won't be until Boeing exceed the 10/month rate that it will able abl
eto start to reduce the delays and catch up to the original delivery
commitments. And Boeing won't reach the original rate of 10 before 2012.

It won't matter much in the end.



In fairness, not all 892 aircraft are to be delivered "as soon as
possible". Some airlines have deliveries that go up to 10 years in the
future, so those aircraft probably won't be delevered late. The firtsher
one goes into the futire, the more spare production slots existed in the
original order book, and that will allow Boeing to catch up on the delays.

Yup. I will take Boeing's position over Airbus's any day of the week.