Boeing delays 787 delivery on Rolls engine setback

The U.S. planemaker now expects to deliver the carbon-composite plane, already delayed by more than two years, to launch customer Japan's All Nippon Airways (ANA) <9202.T> by the middle of the first quarter of 2011.

Boeing previously said the first delivery would be made a few weeks into 2011.

The delay comes four weeks after the Rolls' engine, a Trent 1000, blew up at a test site in Derby, central England, forcing the company to temporarily close the facility.

The delivery date revision follows an assessment of the availability of an engine needed for the final phases of flight test this fall, Boeing said. Flight testing across the test fleet continues as planned.

Boeing added it was working with the British engine maker to ensure engines were made available as soon as possible but that the delay would not affect its financial outlook.

A Rolls-Royce spokesman said it was working closely with Boeing to expedite delivery in support of their programme schedule.

Rolls added its engine supply issues were unrelated to the test bed event which occurred earlier this month and that none of its engine test programmes had suffered any delays.

It is probable that some modification will be required to the Trent 1000's already on the 787 test certification programme, said BGC Partners analyst Howard Wheeldon.

Although clearly a setback to the programme we do not see the additional Rolls engineering that is likely required being a major obstacle for the 787.

Shares in Rolls-Royce were 1.2 percent down at 552.50 pence by 12:35 p.m. British time, having earlier hit a seven-week low on the news.

Investec analyst Andrew Gollan said he expected the delay to have a negative reaction on Rolls-Royce shares but there would be no material cost impact to Rolls.

Boeing shares closed 0.5 percent higher at $61.33 on Thursday in the United States.

REGRETTABLE DELAY

Boeing had aimed to deliver the first Dreamliner to All Nippon Airways by the end of 2010, but last month pushed the delivery date back to a few weeks into 2011, citing technical issues.

ANA called the delay regrettable and said it was keen to know when Boeing would be able to deliver its second 787.

ANA has ordered 55 of Boeing's latest jetliner, eight of which the planemaker has promised to deliver by April 2011.

Deliveries of the long-range passenger jet to ANA have been delayed by more than two years due to production problems.

The Japanese carrier said it did not include revenue from the 787 in its business plan this year so there would be no change to its profit outlook for the year ending March 31.

The Dreamliner promises greater fuel efficiency and its lightweight materials and innovative design have captured the imagination of the industry.

Yet flight testing has been going more slowly than expected since the twin-engined passenger plane made an inaugural flight last December.

A spokesman for Australia's Qantas Airways , another 787 customer, said it was too early to say what impact the delay would have on it.

In July, Qantas brought forward its 787 delivery schedule, saying it would receive the first 50 of the aircraft it has on order in mid-2012.

(Additional reporting by Sakthi Prasad in Bangalore; Editing by Muralikumar Anantharaman, Tim Kelly, Mark Potter and Karen Foster)