FT.com reports that Boeing's (NYSE: BA) biggest customer believes that its 787 Dreamliner will be delayed even further due to a redesign of the part of the plane where the wings attach to the fuselage. Steven Udvar-Hazy, chairman of International Lease Finance Corporation (ILFC), the 787's biggest customer warned that the 787's first deliveries would be delayed for at least another six months because its center wing box - which holds the wings in place - needed to be redesigned. Yvonne Leach of Boeing said: "We are doing some redesign work but things are more complex than what he said. There's a whole load of things going on."

On the plus side, Boeing has received 857 orders for the 787 totaling $140 billion. On the minus side, Boeing originally planned to deliver the 787 in May 2008. I have lost track of the precise number of announced delays in the 787's delivery. Hazy said he expected delivery of the long-range, 250-300 seat jet to be delayed until the end of the third quarter of next year. Boeing's most recent guidance was that the Dreamliner would be ready "early" in 2009.

Many of the people I interviewed for my book on Boeing are not very concerned about the delay -- saying that Boeing is committed to getting it right and that delays are normal for a new program with new technology. But with the penalty payments for late delivery, the low prices needed to close deals, and the higher costs required to fix the problems, Joseph Nadoll of JPMorgan Chase & Co. (NYSE: JPM) suggests a steady "eating away at program margins and long-term program profitability."

Boeing stock -- which lost 4% of its value yesterday -- was up about 1% in after-hours markets.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned and is writing a book on Boeing.

Is Boeing's Dreamliner facing further delays? originally appeared on BloggingStocks on Thu, 20 Mar 2008 09:40:00 EST. Please see our terms for use of feeds.