Dreamliner delay hits expansion plans

11 April 2008
Gulf airlines reconsider growth strategies as Boeing postpones delivery of 787s by at least 18 months.

Airlines across the Middle East are having to review their expansion plans, as a result of fresh delays in the production of Boeing’s 787 Dreamliner aircraft.

The US manufacturer has announced further delays to production and testing of its beleaguered Dreamliner project. The company announced on 9 April that the plane is not expected to make its first flight until the fourth quarter of this year, with commercial deliveries beginning 18 months behind schedule, in the third quarter of 2009.

The delay could hit the rapid expansion plans of airlines across the Middle East, where in recent months there has been a series of orders for the Dreamliner. The long-haul routes on which it would be used are a key element of most regional airlines’ growth plans.

The fuel-efficient aircraft has proved the fastest-selling model in aviation history, with more than 850 planes on order. With Boeing expecting to produce just 25 of the planes in 2009, delivery schedules could slide dramatically over the next decade.

“For planes due to be delivered in 2012-13, the best delivery times being talked about are 2016-17,” says an official at Aviation Lease & Finance Company (Alafco), a Kuwaiti aircraft leasing company with 22 Dreamliners on order. “All the countries around the Middle East have plans to expand their networks. You would think these plans will have to face delays.”

Iraqi Airways recently agreed an order for 10 of the aircraft as part of a $5.5bn agreement with Boeing. The carrier had planned to develop its fledgling long-haul network around the plane over the next decade, with deliveries beginning in 2012 (MEED 28:3:08).

Marty Bentrott, senior vice-president for Middle East commercial sales at Boeing, says Baghdad was made aware of the delay before placing its order, but chose to go ahead regardless.

Two weeks earlier, Bahraini national carrier Gulf Air had sealed a $6bn deal for 16 Dreamliners, with options on a further eight. Bentrott says Boeing was not aware of the extended delay at the time the deal was signed and hence could not inform Gulf Air.

Gulf Air official concedes the airline is considering a range of options to cater for any delays in delivery of the Boeing aircraft (MEED 13:3:08).

“We are approaching the leasing market and are talking to Boeing and Airbus about further orders to bring in other aircraft to fill any gap,” he says. “Our Dreamliners were not due for delivery until 2016 anyway so we will see what happens, but we are optimistic we can fill any gap until they arrive.”

Bentrott stresses that Boeing has maintained communication with its customers over the extent of the delays.

“The reaction has been disappointment, but also understanding,” he says.

Other airlines awaiting Dreamliners include Qatar Airways, which has 30 on order, and Royal Jordanian and Saudi Arabian Airlines (Saudia) with three each.

Dubai Aerospace Enterprise, a leasing company, has also placed an order for the aircraft.

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