Seattle: Boeing Co is set to make the first test flight of its 787 Dreamliner on Tuesday, almost two and a half years after the new, fuel-efficient plane, which is key to the company's financial future, was supposed to fly.
The lightweight carbon and titanium plane, promising to save airlines million of dollars in fuel and maintenance costs, has been hampered by a shortage of bolts, faulty design and a two-month strike, and it still has a long way to go before it proves to be a success.
"It (the first flight) will provide a badly needed perception that the program is on some kind of schedule again," said Richard Aboulafia, aerospace analyst at research firm Teal Group. "But it's still a long way from the ultimate result."
Airlines like the concept of the mid-sized plane, which promises to excel at carrying 250 or so people very long distances. They have ordered 840 of the aircraft, worth about $140 billion, since work on the plane began in 2004.
But production has been delayed five times in the past three years, and the first flight has been postponed six times, stretching customers' patience.
In the meantime, rival Airbus, a unit of Europe's EADS, has been attracting buyers for its competing A350 plane, which will also be made primarily from carbon-composite materials.
Exactly how much profit Boeing can expect to make from the plane is uncertain. Analysts say the company has invested more than $10 billion in the project, and will have to give some sort of compensation to customers for late planes. How late the planes are, and how they will perform, will not be known until flight tests are complete.
Boeing shares were nearly flat in premarket trade after closing at $56.05 on Monday on the New York Stock Exchange. Some analysts had expected gains, but said the first flight was largely factored into the share price.
"I've got to think they're going up," said Alex Hamilton, Senior Managing Director at Jesup & Lamont. "This is obviously a huge milestone."
Hamilton said the implications of first flight are great for Boeing and for the suppliers of Dreamliner parts and labor. He said that once the plane is in the air, he will spend the next few hours reassessing his view of Boeing shares.
Round-the-clock tests
At 10 a.m. Pacific time on Tuesday--assuming good visibility and decent weather--Boeing will send the first 787 into the air for a four-hour flight from its factory 30 miles north of Seattle for a foray around the Puget Sound and inland Washington state.
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That will start at least nine months of airborne tests on a fleet of six 787s running around the clock, which Boeing executives say will be like running a small airline.
But its test pilots will push the plane well beyond limits expected in ordinary commercial flights, practicing mid-air stalls, dives and steep banks, as well as seeking out extremes of heat and cold.
Boeing says the first 787 should be certified and delivered to Japan's All Nippon Airways in the fourth quarter of next year--more than two years after the original target of May 2008. But most analysts agree that Boeing will take longer than 12 months to complete test flights.
"This is a new aircraft and a new way of building aircraft," said Aboulafia. "Twelve months (of testing) is the best-case scenario. More time is desirable."
New issues
The plane has been beset by problems partly because of the new materials being used and extensive outsourcing.
Early delays were due to shortages of parts and the difficulties of bringing together fuselage and wing structures from Japan, Italy and elsewhere in the United States, aggravated by a two-month strike last year.
The most recent delay was potentially more serious, as Boeing needed to reinforce the side of the plane where the wing meets the fuselage.
The revolutionary use of carbon fiber and the problems of joining it to other materials mean there is still plenty of risk that Boeing's new plane will hit new snags in the air.
"Just as they (Boeing) found hurdles on the way to first flight, they are going to find hurdles on the way to certification," said Aboulafia.
The company's shares have risen 93 percent since March, outstripping the 67 percent rebound in the Standard & Poor's 500 index. But closing at $56.05 on the New York Stock Exchange on Monday, they are still well below the all-time high of $107.80 in July 2007, before problems on the 787 emerged.
Even a successful flight on Tuesday could trigger a sell-off, said analyst Robert Spingarn at Credit Suisse.
"We think this catalyst is largely priced in and are sellers on event," he wrote in a research report on Monday.
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