Dreamliner delays may be boon for Airbus

ANALYSIS

updated 2:05 p.m. ET June 23, 2009

Boeing's fresh delay for its long-awaited Dreamliner — its sixth in two years — could not come at a worse time for the Chicago planemaker.

Customers are complaining publicly about the company's inability to meet its commitments, as some did at last week's Paris Air Show. And some are going so far as to move their business to Boeing's archrival, Airbus. The new holdup, announced June 23, which Boeing says it decided on last week but apparently kept under wraps until after the big aviation show, seems likely to cost the carrier both business and credibility. 

Qatar Airways Chief Executive Akbar Al Baker, who is waiting for up to 60 of the new 787 transcontinental jets, groused openly at the Paris show about the U.S. aerospace giant, telling reporters that the carrier has "some serious issues" with Boeing. He added that Boeing will be in for a "serious surprise" if the issues can't be remedied. In addition to its orders for the Dreamliner, Qatar has 80 orders with Airbus for its forthcoming rival new plane, the A350.

Already, the delays are forcing some carriers further into the arms of Airbus for alternatives. Virgin Atlantic, for instance, announced on June 22 it was buying 10 new Airbus A330-300 planes, for delivery by 2012. Virgin was not expecting to take delivery of Dreamliners it has on order until 2013, and could now be waiting still further.

Reinforcing a section of the plane
Troublingly, Boeing pointed on June 23 to the "need to reinforce an area within the side-of-body section" of the new 787. This structural issue is serious enough that Boeing could not provide a new timetable for the jet's first flight, but would say only that it will be "several weeks" before the new schedule is even available.

Boeing executives sought to play down the difficulty. Scott Carson, president and CEO of Boeing Commercial Airplanes, said experts have already identified several potential solutions. "Consideration was given to a temporary solution that would allow us to fly as scheduled, but we ultimately concluded that the right thing was to develop, design, test, and incorporate a permanent modification to the localized area requiring reinforcement," he said in a prepared statement. "Structural modifications like these are not uncommon in the development of new airplanes, and this is not an issue related to our choice of materials or the assembly and installation work of our team."

Even before the new delay, however, the dogfight between Airbus and Boeing was heating up. Orders for Boeing's new plane have been slipping away, while Airbus continues to book new requests for its A350.

The first version of the A350 is scheduled to take wing commercially in 2013. It is designed to compete with both the Dreamliner and the long-established, larger Boeing 777, the company's staple wide-body jet. Boeing can point to 866 orders for the Dreamliner—a staggering tally for a novel design that has been delayed for two years and faces a slew of rigorous tests before its first commercial delivery next spring. But, so far this year, the company has lost 58 orders for the Dreamliner and has offset that with only 13 new orders.

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