787 may face its third serious delay

Painfully slow assembly of the first airplane continues to stall Boeing's crucial 787 Dreamliner program, and a third serious delay to the program is looming.

That first plane "is too far out from getting done" to meet the schedule announced just two months ago, a Boeing 787 worker closely involved with the assembly of airplane No. 1 said Friday.

A leading Wall Street analyst warned Friday of the likelihood of a new major Dreamliner delay, predicting that deliveries could slip out as much as a further six months.

"That's a possibility," said the Boeing worker.

Richard Safran, who covers Boeing for Goldman Sachs, said the time-consuming process of removing and replacing temporary fasteners in the airplane's plastic composite structure is contributing to the delays.

The Boeing worker said a big issue is that mechanics face long waits for replacement parts, which have to be ordered when anything is damaged in the course of assembly.

"Turnaround is too long," the worker said.

Constant changes to the plane's interior configuration are also holding up completion of the wiring, he said.

In response to the analyst report, Boeing said the outcome of a reassessment of its schedule won't be known until the end of this month.

Safran cited unidentified industry sources for his conclusion that first flight will be pushed out a further three months and first deliveries will slip even more — not starting until after September 2009. Accordingly, he slashed his forecast for 2009 Dreamliner deliveries by almost 40 percent.

The program is already nine or 10 months late, and a further slide in delivery until September next year would push the total delay to 16 months.

A delay of more than a year would be unprecedented for Boeing.

In January the company announced its most recent delay to the 787 program, pushing out first flight to June and saying it expected the first Dreamliner delivery to All Nippon Airways (ANA) in "early 2009."

That delivery timetable was interpreted to mean sometime in the first three months. Executives declined at the time to be more precise than that, saying the company's engineers would do a complete reassessment of the manufacturing and delivery schedule that wouldn't be ready until the end of this month.

Boeing's airline customers are waiting for the outcome of that assessment to learn their new delivery dates.

Reacting to the analyst report, 787 spokeswoman Yvonne Leach said the schedule assessment is "really complex work" and isn't finished.

The new schedule won't be finalized "until that assessment is done," Leach said, "And it isn't done yet."

Boeing still aims to have that ready for its customers by month-end, she said.

Safran's note referred to the difficulties Boeing has encountered in replacing temporary fasteners in plastic composite structure.

According to a local source familiar with the details, when the first Dreamliner wings arrived from Japan, some of the fasteners that hold the wing skins in place had been installed incorrectly. Boeing later said that many other fasteners on the airframe were temporary fixes, used because of a shortage of the correct fasteners before the first rollout of the airplane last July.

Taking out a fastener can damage the composite material, which must then be painstakingly repaired or replaced before insertion of a new fastener.

Safran also wrote that late changes to the configuration of the Dreamliner are holding up the wiring of the aircraft. Installation of the wire bundles can be completed only when the airframe's physical configuration is finalized.

In passing, Safran ominously mentioned that it was wiring problems that caused the massive delays and giant financial hits to Airbus on its A380 superjumbo jet.

Asked about the 787's wiring, a person who looked closely at the first Dreamliner wiring bundles and the equipment in its electronics bay late last month reported that while he could see progress from weeks before, "There's a whole lot not there yet."

Boeing's Leach said she would not give a detailed response "issue by issue" on what is going wrong in assembling the first airplane.

"These are the standard startup issues that always happen on a new production line," she said.

Safran's note said that the next program milestone, of switching on the electrical systems in Dreamliner No. 1, called "power-on," won't happen until the summer. It had been expected this month.

"First flight, expected three months after "power-on," may be further delayed. We now think deliveries will start in [third quarter 2009] vs. the current 'early '09' target," Safran wrote in his note.

"Boeing continues to underestimate the amount of work required on the 787."

He also said that final assembly of Dreamliners No. 4-6 is delayed, which is "significant as we think [Boeing] needs six aircraft in flight test for 11 months."

He revised downward his delivery estimate to 50 Dreamliners in 2009, from his previous estimate of 80 jets. Accordingly, Safran reduced his projected Boeing revenue for 2009 by $3 billion ($100 million per delayed airplane) and lowered his price target from $98 to $88.

Boeing's stock fell more than $3 on the report, closing at $76.60 for the day.

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