Bloomberg News

Boeing Customer Says 777X Sales Won’t Start This Year

March 04, 2013

Boeing Co. (BA:US) 777 customer Etihad Airways PJSC said it doesn’t expect sales of an upgraded version of the model to begin this year as planned, and the planemaker’s chief said 787 battery woes have slowed development work.

Etihad Chief Executive Officer James Hogan also wouldn’t say whether he still expects the 777X, as the new variant is called, to enter service at the end of the decade, as Chicago- based Boeing has been promising.

Boeing Commercial Airplanes President Ray Conner “is meeting with us next week in Abu Dhabi, and as part of that meeting, we’ll look at what our future requirements are,” Hogan said yesterday in an interview in New York. “We’re believers in the aircraft and the product. We’ve had presentations in Seattle on next-generation aircraft and continue to evaluate the aircraft accordingly.”

The 787 Dreamliner’s battery faults -- still under investigation after the model has been grounded for seven weeks -- are slowing work on the planned 787-10, a stretched version of that plane, Conner said earlier yesterday. There’s “hopefully enough interest to be able to bring that forward soon” for board approval to commit to producing it, Conner said at a JPMorgan Chase & Co. conference in New York.

“We have been working really hard on the business case, working with our customers,” Conner said of the 777X. “With both of those, though, I think we’re in relatively good shape once we get through the battery issue.”

Revised Schedule

Conner’s predecessor, Jim Albaugh, who unexpectedly retired last year, had said he expected board approval to begin offering both planes by the end of 2012. Conner revised that prediction when he took over in June, saying he still wanted to confer with customers before taking any new designs to the board.

Airbus SAS’s rival A350, scheduled to enter service in 2014, is “a concern,” though Boeing still expects to sell as many 777s this year as it delivers, Conner said yesterday. The company’s delivery forecast is for about 100 777s this year.

“There hasn’t been any change, we’re still trying to hit the same internal milestones,” said Karen Crabtree, a Boeing spokeswoman. “We continue to work with customers to understand the requirements to define the future 777.”

Boeing generally first seeks the board’s authority to offer a new model and then, once it has customers lined up, the authority to launch, which is when it commits to producing the plane. Directors gave authority to offer the 787-10 in November.

The third customer meeting for potential 777X buyers, following gatherings in June and October, is scheduled for April in Seattle, home to Boeing’s commercial jet headquarters.

The 787 has been grounded by regulators since Jan. 16, after battery faults led to a fire on one plane and an emergency landing by another. The U.S. Federal Aviation Administration is considering a plan that Boeing proposed Feb. 22 to alter the battery’s cell spacing and case to better protect the jet in the future.

To contact the reporters on this story: Tim Catts in New York at tcatts1@bloomberg.net; Susanna Ray in Seattle at sray7@bloomberg.net

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


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