Turbulence for the Boeing 787

Boeing’s Absent 787 Leaves Airspace in Paris Lineup (Update1)
By Susanna Ray


June 15 (Bloomberg) -- The most talked-about plane at the Paris Air Show will be the one that missed the flight.

Boeing Co.’s 787 Dreamliner would be delivered “bang on schedule” in 2008, commercial-planes chief Scott Carson said in June 2007 at the industry’s last Paris gathering. Instead, a date hasn’t even been set for its maiden flight after production and development delays put the model back two years.

Investor confidence in Boeing, whose stock has lost half its value since the first delay in October 2007, won’t be restored until the 787 takes to the skies, said Bill Alderman of Alderman & Co. Capital, a broker specializing in aerospace. That should be in the next two weeks, Carson said in Paris today, without being specific. Even then the plane has hurdles to clear, according to Craig Fraser, a Fitch Ratings analyst in New York.

“The first flight is an important event, but there are still a few years of potential risk with this program,” Fraser said “Flight testing may uncover some other issues that could set back the program, and production ramp-up is always a risk.”

Four delays to the 787 have also ceded ground to Airbus SAS, Chicago-based Boeing’s only bigger rival. Committed to building the larger A380, the European company initially stalled in its response to the Dreamliner, Boeing’s fastest-selling model with 865 orders. Airbus has since begun to close the gap, racking up 483 orders for the competing A350, which will now enter service three years behind the Dreamliner.

Paris Showmanship

The two companies are showing off their wares at the Paris show, a proving ground for planemakers, defense companies and engine manufacturers. The event, which began today and runs until June 21, will have more than 2,000 exhibitors for the first time, though there will be fewer new aircraft, according to the French trade group organizing the show.

The 787 has lost 58 orders so far this year as airlines cut capacity and trim spending to stem losses in a global recession. .........(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601109&sid=ayC0EIF_gqCw