Boeing's customers expect more delivery delays for 787 Dreamliner

ORLANDO, Fla. — Airline customers and aviation analysts at an annual industry conference here are bracing for more bad news this month on the 787 Dreamliner.

The buzz is that no more than 45 of the new jets, and possibly fewer, will roll out of Everett in 2009.

If that's confirmed when Boeing outlines its delivery schedule toward the end of March, it would be a severe setback from the previous plan.

Boeing originally planned to deliver 112 Dreamliners next year, but pared that forecast to 109 in October. Even a bearish forecast last week from Goldman Sachs analyst Richard Safran called for 50 to be delivered in 2009.

Boeing's implicit message last fall was that the delivery delay would be temporary, and the company would almost fully catch up on its production plan within a year.

But when Boeing in January announced a second delay in the program, executives put off until the end of this month giving any detail about the impact on deliveries.

It's clear from interviews here at the International Society of Transport Aircraft Trading (ISTAT) conference that the no-nonsense industry insiders who buy and sell airplanes expect another delay announcement and a big slowdown in the delivery schedule.

"The production ramp-up is going to be slower" than previously announced, said a senior executive with an airplane-leasing company, a Boeing customer. "It was always aggressive. Now it's not achievable."

All who spoke for this story asked for anonymity. Boeing customers didn't want to get on the wrong side of the company publicly; investment analysts cited their employers' rules restricting their public comments.

At an airline that under the already-delayed schedule is due to take its first 787 in summer 2009, an executive said he doesn't expect any planes in 2009.

An executive with a European lessor said he expects his 787 deliveries to be pushed far out again. Yet his company is getting any details from Boeing, he said, putting management in a difficult situation with the bankers providing its financing.

It would have been preferable for Boeing to have announced one 18-month delay back in October, the executive said. Boeing management would have "looked like heroes" if they had then delivered sooner.

Top Wall Street analysts at the conference also shared the consensus expectation of a serious program delay.

The widespread certainty was not dented by assurances offered Tuesday by Boeing's marketing vice president, Randy Tinseth.

Tinseth said the detailed delivery schedule won't be ready until later this month but insisted in his conference presentation that the 787 remains on the track announced in January, with first flight by June and entry into service in "early 2009."

"Yeah, right," a second senior leasing executive said skeptically. "There's the official position and then there's the unofficial position," said the executive, whose company has multiple 787s on order.

The first leasing executive said he is concerned less about when Boeing flies or delivers the first plane and more about the expected slowdown in increasing production for further deliveries.

That would mean many customers would get their planes much later than hoped, and the effect would be felt well beyond the first airlines in line for deliveries.

In the last month, said this leasing executive, he's seen "a significant buildup of pressure" from airlines that have ordered 787s and are actively looking for interim airplanes to tide them over.

Some, no longer looking for a stopgap lease of a year or two, are seeking five-year leases on Boeing 767s or Airbus A330s. Others are buying 777s.

"It's linked to concern over the 787 delays," the executive said. "People are looking for certainty."

He said customers have lost faith in Boeing because of the cascade of delays preceded by promises that everything is fine. He said the conference chatter is "Boeing didn't learn anything from the A380."

Airbus announced a series of delays on its flagship A380 program that eventually stretched to two years. If the conference insiders are right, Boeing now faces a delay of more than a year on the 787.

The leasing executive made a point of saying that "the 787 is a great airplane" and should be a success in the end.

But the schedule to be announced at the end of this month has to be the final delay for Boeing to avoid serious blame, he said.

"Three strikes and you're out," he said. "If what comes out [later this month] doesn't work, there's no place left to go."

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