Boeing has delayed the first test flight of its new 787 Dreamliner one month to the end of September, BusinessWeek reported, but the aerospace giant is determined that the new jet will enter service on time and has boosted investment in the aircraft to overcome last-minute problems. "We are spending more than originally planned to ensure we make our commitments," CEO James McNerney, said last week. "We are facing some challenges." The first 787 delivery is scheduled for May 2008 to All Nippon Airways. The main problem, typical of new aircraft, relates to integrating software systems with the hardware, although McNerney said the company has "no reason to believe we'll face a major issue there." Other problems relate to supporting major suppliers and trying to reduce the overall aircraft weight, which is about 2% heavier than it should be. Engineers are redesigning parts of the wing and window frames to meet its weight targets, but McNerney said even a slightly heavier aircraft would still meet performance obligations. Last week, Boeing topped Wall Street forecasts, posting its largest profit in nearly four years, and shares climbed to a new 52-week high. To meet the tight timetable, Boeing has raised its R&D expenses for the year to $3.7B from $3.2B. "It's the scramble at the end of the program," McNerney said. "Increasing R&D is the right thing to do to keep our successful airplane programs on track."
Sources: Business Week
Commentary: Boeing: A 787 Delay [24/7 Wall St.] • Boeing: Technically Problematic, Fundamentally Sound • Boeing Taken Apart By The Little Parts
Stocks/ETFs to watch: BA
Earnings call transcript: Boeing Q2 2007
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