No room for error as new setback hits 787

A new delay of up to 12 weeks in the first 787 Dreamliner flight is fueling skepticism among aviation analysts that Boeing can deliver the pioneering all-composite airliner to its first customer next May as scheduled.

"I have a feeling May is not a reasonable date now," said Adam Pilarski, lead analyst with aviation consultancy Avitas.

But Boeing executives insisted Wednesday they'll meet the timetable by having a large team of test pilots fly around the clock.

The first flight will be seven to 12 weeks later than anticipated when the jet rolled out in Everett in July, executives acknowledged in a conference call with analysts and media. The shift follows a one-month delay announced earlier.

Rather than the end of September or early October, the Dreamliner now is expected to fly sometime between mid-November and mid-December.

Most industry analysts were willing to accept Boeing's explanations that the delay was due to temporary issues, rather than fundamental flaws in the company's globe-spanning network of partners that supply entire sections of the jet.

But they were wary of Boeing's assertion that the first 787 can still be delivered to All Nippon Airways of Japan in May.

"I don't share their confidence," aviation analyst Scott Hamilton said in an interview on the IAG aviation Web site. "I admire their chutzpah."

Boeing admits the schedule now leaves almost no room to maneuver if any substantial problem turns up during flight testing, so the project carries much greater risk.

"It's a new product. It's technologically different," said analyst Pilarski. "So far we don't see significant problems." But, he added, "if something goes wrong in the [federal] certification process, then all bets are off."

The financial markets, like the analysts, reacted calmly. Boeing stock closed nearly flat on a day when broad market indexes fell.

No "fiasco"

"Is this a fiasco in the making? I don't think so," said Howard Rubel, an analyst with Jefferies Group, "There's nothing here that says they won't deliver a very flightworthy airplane."

Boeing does, however, face a severe schedule crunch to finish both the first plane and several others needed to complete the flight tests required by the Federal Aviation Administration.

Mike Bair, head of the Dreamliner program, said Boeing needs the extra weeks to finish structural work on Airplane One that was not completed by its airframe partners in Italy, Japan, Kansas and South Carolina.

It also must finish and integrate the flight-control software code supplied by the Phoenix-based aerospace unit of systems partner Honeywell.

But Bair endorsed the suppliers to whom Boeing has entrusted so much of the 787's construction.

"What we are dealing with on Airplane One is absolutely not indicative of what their capability is or how the rest of the airplanes are going to come in," Bair said. "I have got great confidence that this is an anomaly with putting the first airplane together."

The partners are now being given more time to build and equip their sections of the planes that follow the first one, Bair said, so that those pieces arrive in Everett more complete, as originally planned.

But to achieve delivery in May, Boeing must now pull out all the stops.

The time available for flight tests has shrunk to around six months, from nine months in the original 787 development plan. Boeing will therefore operate flight tests on an intensive schedule with a team of 34 test pilots.

"We're essentially going to be running an airline, 24 hours a day, seven days a week," said Bair.

Soon after first flight, an additional aircraft will join the test program "every two or three weeks," he said, until there are six jets in test flights. They will each fly about 120 hours a month — compared with 70 or 80 hours a month on the 777 test-flight program.

Boeing has no remaining slack in the program if further issues surface later.

"If we have some discovery in the flight-test program that causes us to have to go back in and do some sort of redesign or rework in the airplane, we are rapidly running out of time to be able to deal with anything big," said Bair.

What went wrong? Of the two major factors Bair identified, one was well known and the other a surprise.

The known issue is the difficulty Boeing has encountered in completing assembly of Airplane One.

The Dreamliner is assembled in Everett from large sections built around the world. Boeing acknowledged months ago that the first sections arrived for final assembly missing most of their interior systems and with thousands of temporary fasteners holding the pieces together.

Documentation woes

That meant Everett mechanics had to do work that "traveled" from Japan or Charleston, S.C. That proved much more difficult than originally thought, in part, Bair said, because the partners inadequately documented their work.

"There have been a number of cases where the documentation of the work completed before shipment to us didn't match the work that was remaining to be done," Bair said.

"The way the No. 1 airplane went together with temporary fasteners ... kind of jumbled up the way the airplane got put together," Bair said. "They didn't know what fasteners they were going to have basically until they showed up and they were able to put them in. So, it's kind of been hand-to-mouth for them.

"The production system is not, has not, was not, was never conceived to deal with this kind of traveled work," Bair said. "This production system will be really robust when it's working the way it's supposed to, meaning, when all the parts are being put in where they are supposed to be put in."

More than 700 temporary fasteners must still be replaced on Airplane One, said Bair.

The second cause of the delay was new.

Last fall, Boeing boasted of how well trials of the 787 flight-control software had gone during flight tests on a leased American Airlines 777. Yet Wednesday, Bair revealed Honeywell has fallen badly behind in writing, testing and certifying the flight-control software code.

He said the "scope of work ... was misestimated in terms of how much had to be done and how quickly it has to be done."

Bair said the software "is now slated for completion and delivery later this month" to Boeing's testing labs.

Even a two- or three-month delay in delivering the Dreamliner to its first customers would have a minimal financial impact on Boeing, Commercial Airplanes CEO Scott Carson told Wall Street analysts on the conference call.

In a note to investor clients, Credit Suisse equity analyst Rob Spingarn said the Dreamliner is "delayed by logistics, not design," a distinction he said should offer comfort in the long view.

Joe Campbell, an analyst with Lehman Bros., said he thinks Boeing will fly the airplane in mid-November, at the beginning of the projected window. He thinks it added the extra month as a cushion.

Campbell expects the delay to add substantial cost as Boeing throws people and resources at fixing the problems. But this won't affect Boeing's bottom line, he said, because previously announced increases in 787 research-and-development spending left room for such costs.

"The only way they get in trouble from the investment community's point of view is if this whole process slides to the right six months or so," he said.

"They are rushing to the airport ... hurtling to make the plane. Right now, they can still make it," he said.

Even on what may have been one of his worst days as head of the program, Bair remained defiantly optimistic.

"We are moving forward," Bair said. "We have an experienced team that understands the issues and knows how to bring home complex airplane programs like this."

Dominic Gates: 206-464-2963 or dgates@seattletimes.com