Boeing Scrutinizes Rolls Recovery Plan for 787 Dreamliner Jets
Stock Chart for Rolls-Royce Holdings PLC (RR/)
Boeing Co. will begin poring over plans today from Rolls-Royce Group Plc aimed at avoiding further delays to the 787 Dreamliner following the blowout of an engine in testing last month, the head of its jetliner division said.
A team from London-based Rolls-Royce will deliver a briefing today and tomorrow in Seattle, where the 787 is built, Boeing Commercial Airplanes President Jim Albaugh said in an interview yesterday. The proposed steps should allow the aircraft to enter service as planned early next year, he said.
“Rolls is stepping up, and we’ll take a hard look at the recovery plan, and based on what they told us, I think we’ll be OK,” Albaugh said. “They knew that they had the potential for what happened, and they have the fixes in to address that.”
Boeing delayed the 787’s first delivery for the sixth time on Aug. 27, saying Rolls-Royce couldn’t supply an engine to finish flight testing, 3 1/2 weeks after a $17 million Trent 1000 blew up. The biggest risk to the jet’s development probably now comes from the turbines being supplied by Rolls, JPMorgan Securities analyst Joseph Nadol said on Sept. 20.
Rolls-Royce competes with General Electric Co. to produce engines for the Dreamliner, which is running almost three years behind schedule because of problems with the new manufacturing system and materials used. The 787 is the first airliner with a fuselage and wings made of composites instead of aluminum.
Boeing, based in Chicago, parked one of five Dreamliner test planes earlier this month to replace one of its two Rolls- Royce engines following a power surge before a takeoff in New Mexico. Albaugh said a fix is already in place to address that issue, which was unrelated to the engine blowout.
In the Aug. 2 test, debris was flung out at high speed and pierced the engine housing. That engine had incorporated changes from the version being used on test jets currently, and Boeing had been planning to use it on its ninth Dreamliner, intended for Japan’s All Nippon Airways, said Lori Gunter, a Boeing spokeswoman.
That plane and engine are intended to be in the configuration that will be delivered to customers and will be used to verify some final function, reliability and extended- operations tests necessary before the U.S. Federal Aviation Administration grants approval for passenger use, Gunter said.
Rolls-Royce has since supplied other engines for the ninth Dreamliner, she said.
“We would expect to hear something in the next couple of months from Rolls to confirm that the technical issues have been dealt with,” said Edward Stacey, an analyst at Execution Holdings Ltd. in London who has a “sell” rating on the stock.
A spokesman for Rolls-Royce didn’t respond to voice-mail messages seeking comment.
Boeing rose 63 cents to $64.52 at 4:15 p.m. in New York Stock Exchange composite trading. Rolls-Royce increased 0.4 percent to 591.5 pence in London, extending gains this year to 24 percent.
Following the blowout of the Trent 1000 last month, Rolls- Royce was forced to close the testbed in Derby, England, for repairs. The site is also used to trial engines for Airbus SAS’s rival A350 model.
The Trent 1000 should still become a “blockbuster” product for Rolls-Royce by 2015, said Virginie Vacca, an analyst at Standard & Poor’s in London.
Before Boeing’s August statement on the latest 787 setback, the company had said only that the project might be delayed further by flaws in horizontal stabilizers made by Italy’s Alenia Aeronautica SpA. The plane was originally supposed to enter service in May 2008.
New 737 Engine?
Separately, a decision on a new engine for the 737 single- aisle jet, Boeing’s bestselling aircraft, could slip into 2011 instead of this year as planned, Albaugh said.
Most customers don’t think the business case for a new engine makes sense and would prefer that Boeing instead develop a new plane toward the end of this decade, he said.
“We’ll make a decision when we’re very comfortable with what the market wants,” Albaugh said. “If that’s this year, that’s fine, or if it’s next year -- we just want to make sure we get it right.”
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