Boeing tells analyst: 787 deliveries 'will take longer than expected'
Boeing management is telling Wall Street that the 787 Dreamliners already rolled out onto Paine Field are "in various stages of final assembly" and that delivery of those jets "will take longer than expected, particularly those with the Rolls-Royce engine."
Seattle Times aerospace reporter
Boeing management is telling Wall Street that the two-dozen 787 Dreamliners already rolled out onto Paine Field are "in various stages of final assembly" and their delivery "will take longer than expected, particularly those with the Rolls-Royce engine," an analyst reported Tuesday.
In a note to investors, Robert Stallard, aerospace analyst with RBC Capital Markets, relayed the news after briefings from Boeing senior management in Chicago, including CEO Jim McNerney.
Stallard concluded that after the initial Dreamliner is given to All Nippon Airways in mid-February, the ramp-up of 787 deliveries will likely be "longer and shallower" than previously expected.
He projected just two dozen Dreamliner deliveries in all of 2011.
Previously, Wall Street analysts had been projecting around 80 deliveries next year.
Although the jets rolled out so far are painted in the livery of the airlines that will eventually take them, much of the interior installation work is missing due to earlier supply-chain problems.
The Rolls-Royce engine is a specific problem because Rolls is working to apply a fix to its engines after one blew up during a ground test in England in August.
Of the 25 Dreamliners that have so far rolled out through the Everett assembly plant's doors to the flight line, 17 are to be fitted with Rolls-Royce engines.
After those early airplanes are delivered, Stallard said, Boeing's leadership believes the supply-chain pipeline will flow more smoothly.
"McNerney thinks that most of the risk in the ramp-up process will be retired after the first 40-50 deliveries," Stallard reported.
Stallard offered better news on production of Boeing's other jets.
While the 787 assembly line will stay sluggish at best, the other assembly lines will be pumping out jets faster than they have ever done.
Stallard said McNerney indicated the production rate of the Everett-built 777 wide-body, at five aircraft per month but set to rise next summer to seven per month, could go even higher depending on the progress Airbus makes with its rival A350-1000.
And the analyst said McNerney may push output of the Renton-built 737 single-aisle — now at 31.5 jets per month — even beyond the 38 per month scheduled for 2013.
Dominic Gates: 206-464-2963 or firstname.lastname@example.org