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Boeing delays, Qantas prepares to claim


Boeing has announced that the first flight of the 787 has been moved from the end of the first quarter of this year to around the end of the second quarter to provide additional time to complete assembly of the first airplane. Deliveries are now expected to begin in early 2009, rather than late 2008.
"The fundamental design and technologies of the 787 remain sound," said Scott Carson, president and CEO of Boeing Commercial Airplanes. "However, we continue to be challenged by start-up issues in our factory and in our extended global supply-chain."
Carson said that while solid progress has been made on the assembly of Airplane #1, the rate at which jobs are being completed has not improved sufficiently to maintain the current schedule.
"Our revised schedule is based upon updated assessments from the 787 management team of the progress we have made and the lessons we have learned to date. This includes our experience on the factory floor completing production work on the airplane that was originally intended to be done by our suppliers," Carson said.
Over the next several weeks, Boeing will be working with its customers and suppliers to assess the specific impacts of the schedule change on the 787's flight test program and entry into service. This effort will include an assessment of supplier progress in meeting their commitments to deliver more complete assemblies on subsequent airplanes.
Qantas has over 100 of these aircraft on order, with most destined for its Jetstar subsidiary's planned international assault. As a result, the delay by Boeing could have serious ramifications for the budget airline's business plans.
Qantas said, however, that the three-month delay of the 787 Dreamliner announced by Boeing would now see Jetstar not take delivery of its first B787 before May 2009. The Chief Executive Officer of Qantas, Geoff Dixon, said that while the delay would affect Jetstar’s international expansion in the short term, there would be no effect on the Qantas Group’s overall growth strategy and no impact on Qantas Group earnings.
He said Qantas would finalise its contingency plans to mitigate against the delay once a revised delivery schedule was received from Boeing, which was expected within the next few weeks.
“In the meantime, we will look at a range of options including revised retirement dates for some of our aircraft, re-allocating existing capacity and potential schedule adjustments,” Mr Dixon said.
Mr Dixon made a pointed reference to the airline's eligibility for compensation owing to the delay. He said Qantas’ contractual arrangements with Boeing provided for the ability to claim liquidated damages in certain circumstances.
“We will be discussing the issue of liquidated damages with Boeing in the coming weeks,” Mr Dixon said.
The Qantas Group’s commitment to the B787 extends to 115 aircraft, with 65 firm orders, 20 options and 30 purchase rights. The first 15 B787s delivered to the Qantas Group will be operated by Jetstar on international routes.

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