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Boeing will open a second assembly line for its long-delayed 787 jetliner in South Carolina, expanding beyond its longtime manufacturing base in Washington state to take advantage of economic incentives and a nonunion work force. The Chicago-based airplane maker said Wednesday it chose the site in North Charleston over Everett, Wash., because it best suited plans to boost production of the highly anticipated jet, designed to carry up to 250 passengers.

South Carolina offered Boeing $170 million in incentives and relief from sales taxes on things like fuel used in test flights.

Boeing also has long complained about the business climate in Washington and frequent strikes by production workers. At Boeing’s plant in North Charleston, workers last month voted against continued representation by the International Association of Machinists.

55 airlines have ordered 840 of the planes since the program was launched in 2003 — far more than any other Boeing plane at the same stage of development.

The Boeing Company today announced that the first flight of the 787 Dreamliner is expected by the end of 2009 and first delivery is expected to occur in the fourth quarter of 2010. The new schedule reflects the previously announced need to reinforce an area within the side-of-body section of the aircraft, along with the addition of several weeks of schedule margin to reduce flight test and certification risk. The company projects achieving a production rate of 10 airplanes per month in late 2013.

Boeing Chief Financial Officer James Bell also confirmed that the first three 787 airframes will not be sold, and will be written off after taking part in initial flight testing.

Boeing said on Friday an Italian supplier stopped production in June on two sections of its long-delayed 787 Dreamliner after structural flaws were found on fuselages. Alenia Aeronautica halted production because of wrinkles in the fuselage skin caused by flaws in subcomponents of the one-piece composite barrel, said Boeing spokeswoman Loretta Gunter. Flaws were found on 23 airplanes, starting with the seventh in production, Gunter said. She said a solution has been designed and patches will be applied to all the planes built so far. The carbon-composite 787 has been delayed repeatedly. On June 23, the same day as the Alenia Aeronautica production halt, Boeing announced another delay to the first test flight of the 787.

Boeing lost half of a 30-plane order for its 787 Dreamliner from Qantas Airways Ltd., formerly the model’s biggest airline customer, amid slumping demand for international travel. The carrier canceled 15 787-9 aircraft scheduled for delivery by 2015 and will delay taking another 15 787-8s by four years, Sydney-based Qantas said in a statement today. The changes weren’t influenced by Boeing’s announcement this week of a design issue with the planes, the airline said. The cancellation, valued at as much as $3.1 billion based on Boeing’s current list prices, follows the fifth delay of the 787, already two years behind schedule. Boeing has lost orders for 58 Dreamliners this year as carriers struggle with record declines in passenger traffic and the International Air Transport Association forecasts industry losses worldwide may total $9 billion in 2009.

Boeing has delayed the first flight of its 787 Dreamliner again, saying wing-bending tests showed a structural weakness where the wings join the body of the aircraft. It will be several weeks before the plane maker releases a new flight and delivery schedule, Scott Carson, head of Boeing’s commercial airplanes unit, said during a conference call Tuesday. Carson said fixing the aircraft won’t slow the 787 production line, as already-assembled aircraft can be modified with a number of small “hand-sized” parts that can be added wherever the planes are now in the assembly process. With more than 800 orders for the 787, Boeing expects in its initial production plan to finish two planes per month, and has said it may add a second production line to ramp up production in 2012.

Boeing’s commercial airplane customers in the past week placed 18 new plane orders, but canceled orders for 26 aircraft, including 25 orders for the much-delayed 787 Dreamliner. Boeing reported the transactions for the week, ended May 5, on its Web site Thursday. The company didn’t identify customers who canceled orders for the 787s as well as for a single 777 model. New orders included a deal with Turkish Airlines for five 777s, and an order for 13 737s from an unidentified customer, Boeing reported. So far in 2009, Boeing has received 58 new orders and 59 cancellations.

Boeing announced today that it will adjust its twin-aisle airplane production plans for 2010 due to significant deterioration in the business environment for airlines and cargo operators driven by unprecedented global economic conditions. Monthly production of the 777 will decline from seven to five airplanes per month beginning in June 2010. Boeing will also delay previous plans to modestly increase 747-8 and 767 production. No change is being made
at this time to the 737 production rate.

In addition, the weak global economy has contributed to significant declines in the escalation indices that affect forecasted pricing for commercial airplanes already ordered.

The first version of the Boeing 787 needs to slim down, says the chief of International Lease Finance Corp., the airplane’s biggest customer. “Rest assured that the first batch of 787s will be overweight,” ILFC chief Steven Udvar-Hazy said Tuesday at a conference in Scottsdale, Ariz., according to Air Transport Intelligence. “In the long run, this will be an excellent aircraft,” Udvar-Hazy said. “But I pity the airlines that get the first ones. Obviously those aircraft will not be the same standard as those 787s later on.” Last year, Udvar-Hazy said that weight gains by the 787 would limit its range. Boeing subsequently acknowledged that it had cut its range forecast for the first Dreamliners.

The National Transportation Safety Board (NTSB) says passengers cannot be sure that new safety procedures already adopted by airlines flying Boeing 777s with Rolls-Royce engines will work to protect against ice-related engine failures.

In January 2008, all 152 people on board a British Airways 777 survived after the aircraft lost power in both engines during its final approach to London Heathrow airport. Another 777 with Rolls-Royce engines, operated by Delta Air Lines, lost engine power in almost exactly the same way last November – again after ice blocked the fuel supply.

The board said: “Current operational mitigations, which require power reductions, may not prevent additional occurrences at critical flight altitudes. Until the current fuel/oil heat exchangers are replaced by heat exchangers more tolerant to ice accretion, additional failures to achieve commanded thrust could occur and could result in a serious accident and, possibly, injuries and deaths. With two of these events occurring within a year, we believe that there is a high probability of something similar happening again.” It said that “the only acceptable solution to this safety vulnerability” was to redesign the flawed component in the engine.”

Photo: The wreckage of the crashed British Airways 777 is seen in this January, 2008 photo (Photo Copyright Allan Huse)

As Boeing presses towards a first flight in the second quarter, airline customers have begun to raise questions publicly about the 787s performance. Early production aircraft are expected to be delivered overweight, prompting significant concern among airline customers. Boeing now advertises the range of the 787-8 as 14,150-15,170km, a reduction of roughly 560km from the 14,800-15,700km first touted.

Meanwhile, although it continues to talk with Boeing about the 787, Delta Air Lines has given the strongest signal yet that it will not take some or all of the 18 Dreamliners it has on order. The planes were ordered by Northwest, which is now part of Delta, and Delta has said it likely will want more of the bigger 777s from Boeing instead.

A Mideast aircraft leasing firm, LCAL, today canceled a $2.4 billion order of 16 787 Dreamliner aircraft. The canceled order was the second in two weeks for Boeing’s much-delayed, high-tech 787. Russia’s S7 Group last week ended its order for 15 Dreamliners. A combination of a weak economy, production delays and a declining price for oil conspired to make the order less viable for LCAL, which is based in Dubai. The two order cancellations leave Boeing with 882 orders for the Dreamliner, which is running almost two years behind schedule.

Boeing, whose new 787 Dreamliner is about two years late, said a customer canceled all 15 of the planes it had on order. The planes, valued at about $2.6 billion at list prices, were scheduled for delivery late in the next decade, Boeing said in a statement today. The cancellation, which was from a customer who had asked Boeing not to disclose its identity, reduces the backlog to 895 from 910, company spokesman Todd Blecher said.

Aero-News is reporting that airlines are increasingly more willing to delay or outright cancel airplane deliveries in 2009. Of the airlines surveyed, in 2008, only 8% of the responses indicated a willingness to delay or cancel orders, however this month, 33% said they are likely to delay or cancel. Boeing is partially shielded from cancellations due to a large backlog of plane orders it has on the books, and while this won’t have huge impacts on 2009, it is likely to impact Boeing staffing and revenue figures for possibly late 2009 and certainly into 2010.

Qatar Airways is in talks to revise delivery of Boeing’s 787 Dreamliner jet and is seeking compensation after the manufacturer’s latest delay affected the airline’s expansion. Ali al-Rais, the airline’s executive vice-president, commercial, said no new delivery deadline has been set yet. “They already know they have been at fault,” he told reporters in Dubai. “They know that the standard clause will kick in.” Boeing pushed back the schedule for its troubled 787 Dreamliner for the fourth time last December, making its new plane almost two years late.

The Boeing Company in 2008 recorded 662 net commercial airplane orders, bringing its backlog of unfilled commercial orders to more than 3,700 airplanes. The Next-Generation 737 remained the company’s best seller, with 484 chosen last year by customers from nearly every region of the world. Demand for the all-new 787 Dreamliner also remained strong with 93 ordered, primarily by Middle East customers. The twin-aisle 777 captured 54 orders from customers in Europe, the Middle East, North America and Asia. The 767-300ER (Extended Range) logged 28 orders, and the 747-8 Intercontinental added three to the orders list. During 2008, 375 airplanes were delivered to customers worldwide: 290 737s (including six Boeing Business Jets), 14 747s, 10 767s and 61 777s. Deliveries were affected by a strike that halted commercial production for several weeks.

Photo: The oft-delayed Boeing 787 Dreamliner netted 93 firm orders in 2008. (Photo Copyright Tom Alfano)

The Boeing Company (Seattle/Chicago) has announced another delay to its long awaited 787 Dreamliner program. The aircraft manufacturer now expects the 787’s first flight to take place in the second quarter of 2009 and first delivery in the first quarter of 2010. The new schedule reflects the impact of disruption caused by the recent Machinists’ strike along with the requirement to replace certain fasteners in early production airplanes.

Boeing has announced a delay to the production and delivery schedules of the 747-8 Freighter and Intercontinental. The Freighter will move from late 2009 to the third quarter of 2010 and the Intercontinental from late 2010 to the second quarter of 2011. Boeing has cited issues including supply chain delays, limited availability of engineering resources inside Boeing and the recent Machinists’ strike as contributing factors to the delay.

Boeing Co’s 27,000-strong machinists’ union walked off the job on Saturday after the plane maker failed to improve its contract offer following two days of emergency talks. The walkout means there will be no further production of Boeing’s 737, 747, 767 and 777 planes, and that its already delayed 787 Dreamliner will fall even further behind schedule. No further talks are scheduled. Both sides said they were waiting for the other to make the first move. Boeing spokesman Tim Healy said the company was open to hearing from the IAM. “If this company wants to talk, they have my number, they can reach me on the picket line,” Wroblewski said in a message to union members.

Boeing Company’s largest labor union said its members had rejected the plane maker’s contract offer and voted to strike, but the union agreed to postpone a walkout for 48 hours to allow more time for negotiations. The International Association of Machinists leadership announced the extension, which means Boeing employees will stay on the job until Friday, after saying that 87 percent of its members voted to start a strike at midnight on Wednesday. If a deal for a new three-year contract is not reached by Friday, nearly 27,000 Boeing workers will start a strike that would cost the company about $100 million in revenue per day as customers’ planes sit idle on production lines.

Airbus topped rival Boeing Co.’s sales tally at the Farnborough International Air Show, where plane orders from Middle Eastern and Asian airlines shored up an industry besieged by high oil prices. The world’s two largest airliner manufacturers announced $64 billion in orders, with more than 60 percent of the total going to Toulouse, France-based Airbus. That fell short of the $69.7 billion in purchases at the most recent comparable event, November’s Dubai Air Show.

Photo: An aerial overview of the 2006 Farnborough Air Show (Photo Copyright Thomas Brackx)