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Boeing Delays 787 Test Flight

It still expects to deliver the first plane to All Nippon Airways in May.
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will again delay flight testing of its 787 Dreamliner, this time until sometime between mid-November and mid-December.

The eagerly awaited aircraft, for which Boeing has 706 orders from 48 customers, had been scheduled for its initial test flight this month.

Despite the delay, Boeing still expects to deliver the first aircraft to Japanese carrier All Nippon Airways in May as scheduled, said Scott Carson, CEO of Boeing's commercial airplanes division, on a conference call.

There will be no effect on the company's current financial guidance, he said, and a one- to three-month postponement in the first delivery would have "minimal" impact.

Carson and Mike Bair, vice president of commercial airplanes, attributed the delay to two factors. One is that in some cases, documentation didn't match up with work done by contractors before airframe sections for the first airplane were shipped to Boeing's Everett, Wash., assembly plant.

Bair said the faulty documentation relates to a global fastener shortage, which required that contractors use thousands of temporary "fasteners" or bolts on the first plane.

That meant Boeing's partners "didn't know what fasteners they would have until they showed up," which "jumbled up the way the airplane got put together." However, the shortage is easing, and as of Tuesday only 700 fasteners remained to be replaced. Future planes will be left with partners longer to provide more time for work to be completed, Bair said.

A second issue involves integrating systems in the flight control software supplied by


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. Boeing has "added resources to expedite it," Bair said, after underestimating "how much had to get done and how quickly it had to get done."

Bair conceded that the schedule for a May delivery is tight. "As this gets more and more compressed, we are eliminating the time we might have had to deal with anything unexpected that might come up," he said.

Bank of America analyst Robert Stallard wrote Wednesday in a report that the delay means "there is virtually no buffer room left in the test schedule from here."

Still, Stallard reiterated a buy rating on Boeing's stock, which is trading at 15 times his 2008 earnings per share estimate. That's an 18% discount to its forward

P/E ratio over the last 10 years.

Bank of America has a financial relationship with Boeing that includes beneficial ownership of 1% or more of a class of the company's stock.