Boeing Marks Production Goal on First 787 With No Modifications

Boeing Co. (BA) produced its first 787 Dreamliner able to leave the factory for flight testing without going through a modification center, a pivotal step toward meeting future output goals.

Work on the 66th Dreamliner to be assembled will be finished outside the plant in a few days before it moves to preflight operations, said Scott Lefeber, a spokesman. Boeing now has 50 Dreamliners in or waiting to enter a modification center near its factory in Everett, Washington.

Boeing is pushing to boost production after falling more than three years behind schedule with engineering and supplier snags on the first all-composite jetliner. Air India Ltd. is due to get its first 787 soon after agreeing with Boeing on compensation, India Aviation Minister Ajit Singh said yesterday.

Assembling a 787 that bypasses the modification center “signals that you’re beyond the period of rework, which is so costly and has caused so many delays,” Carter Copeland, an analyst at Barclays Plc, said in a telephone interview. “They should have higher confidence to be able to ramp production.”

Boeing plans to produce five planes a month by the end of 2012 and 10 by the end of next year, up from 3.5 now. Speedier production and deliveries would help the company shrink a backlog of 843 unfilled orders for the 787, which lists for as much as $227.8 million. Airlines typically buy at a discount.

Final Work

Lefeber didn’t provide details of what final work is needed on Plane No. 66, which he said left the factory on June 4, or on when Boeing will produce a 787 able to go directly from the plant to the flight line.

Boeing rose 2.1 percent to $69.02 yesterday at the close in New York. The shares have fallen 5.9 percent this year, as the Standard & Poor’s 500 index has gained 4.6 percent. Copeland rates the stock as overweight.

Since last year, Boeing has delivered 11 Dreamliners. Seven have gone to All Nippon Airways Co. (9202) and Japan Airlines Corp. has received four. The twin-engine 787 is designed to increase Boeing’s lead in the wide-body market over Airbus SAS, a unit of European Aeronautic, Defence & Space Co. (EAD)

Air India has been public with its demands for compensation for delays on its order for 27 Dreamliners. India’s Civil Aviation Ministry said in March that Boeing had agreed to pay $500 million in compensation, after demands for $840 million.

Boeing disputed the Indian government’s account at the time, and has declined to discuss any negotiations with Air India.

To contact the reporter on this story: Thomas Black in Dallas at tblack@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.