Tyler Jenish's  Instablog

With the end of the calendar year fast approaching, Boeing’s (BA) newest maiden flight date of “by the end of the year” for the 787 model is becoming harder to accept as a possibility. Boeing has already disappointed many with a long-list of delays. The list stemming from the first delay, a cancelled maiden flight that was to take place in the end of September 2007; to the most recent delay, where the maiden flight of the 787 was again cancelled in June of 2009.

The June 2009 flight delay scared investors as the stock dropped from a high in June of approximately 52.82, to around a 39.04 low in early July. In addition, since July’s low, the stock recovered to 52-54 range before Boeing released it’s Q3 earnings report.  Boeing saw a loss of $2.23 which was worse than the estimated $2.12 loss. Revenue was $16.7 billion which fell beneath the estimate of $17.18 billion. In turn, this caused Boeing’s stock to slip to 47.22 before slowly moving up to 49.68 where it closed at on November 6, 2009.

The delays have caused investor confidence to slip, but there seems to be no shortage of new investors to pick up where others decided to give up on Boeing.  The 787 customers on the other hand are not as forgiving. Currently, there are a total of -70 net orders for the 787 in 2009 with Quantas Airways causing the biggest dent to Boeing with a cancellation of 15 787-9’s soon after Boeing's flight and production delay announcement in June 2009. Also, there is already a promise from Oman Air CEO Peter Hill, that Oman will cancel it’s order of 6 787-8’s if Boeing does not make it’s deadline of “by the end of the year”. Surely, other carriers are considering canceling their orders, and if a new delay occurs, that might sway them to finally cut Boeing of the list in exchange for it’s rival Airbus.

From a positive perspective, the delays could be sign that Boeing is insuring that a finessed product will be released. Boeing is not pressured into prematurely releasing a product into the market to appease investor confidence, a smart long-term move. Others see the delays as a lack of leadership and ability to manage a project under a predefined time frame.

Will Boeing meet it’s newest deadline?

Across the internet, sources point to the 787’s first flight in late December. Boeing has not released a timetable for the pre-flight tests, but the tests are estimated to take place in the end of November if the 787 wants to see lift off before the end of the year.

Time will tell, but regardless, I believe Boeing will come out on top. They are close to putting the 787 in the air and it’s marketability will be high, especially if the claim of having 20% more fuel efficiency than the successful 767 model is a reality.