Boeing keeps cutting costs amid 787 delays

Boeing said it has reduced travel costs by a third and will keep cutting jobs this year as the recession hurts airlines' profits, the Pentagon axes programs and delays mount on the 787.

The 787 Dreamliner's setbacks are "having a significant impact on our financial performance," Chief Financial Officer James Bell said in a memo posted on the company's internal Web site Thursday.

"The cumulative impact of schedule delays on this program has resulted in significant cost overruns and penalty payments to customers that are putting pressure on the program's profitability and increasing our cash requirements," Bell said.

The Dreamliner, a new plane being built with lightweight composites to reduce fuel consumption, is indefinitely postponed while engineers reinforce sections along the wing. The $4 billion of new, long-term debt issued over the past few months "is not a permanent solution" to strengthen the company's financial position, Bell said.

Boeing is about halfway through 10,000 job cuts and will keep shrinking the labor force as airlines order fewer aircraft and the U.S. Defense Department scales back fighter-jet and missile-defense programs that Boeing is involved in, Bell said.

787 likely to fly in '09, Qantas says

Qantas, one of Boeing's top 787 customers, has been told the much-delayed airplane is still expected to fly this year, The Australian newspaper reported.

Boeing in late June abruptly postponed the 787 Dreamliner's planned first flight, blaming stress problems where the wing and fuselage sections are joined. It has not made public a new schedule.

Qantas Chief Executive Alan Joyce told The Australian he was assured by Boeing last week that the first test flight would come by year-end.

The airline still has 50 Dreamliners on order, after postponing delivery of 15 787-8s by four years and canceling orders for 15 of the larger 15 B787-9s.

Self-certification at Boeing extended

The Federal Aviation Administration (FAA) on Tuesday extended the authority of Boeing Commercial Airplanes to self-certify its aircraft and aircraft technologies.

Under the agency's new safety-oversight model, Boeing manufacturing and engineering employees will perform delegated tasks for the FAA, including signing certificates approving new designs.

The new system extends further an already established in-house inspection system at the airplane maker, whereby much of Boeing's inspection work is delegated to more than 400 company in-house inspectors. Though appointed by and accountable to the FAA, for the past decade those inspectors have reported their findings largely through an internal Boeing organization.

The new system increases the authority of the in-house inspectors directly managed by Boeing, allowing them to review new designs, oversee testing to ensure the products meet all applicable standards, and sign off on certification.