Boeing's Dreamliner becomes commercial reality

CHICAGO: After years of headaches and occasional heartbreak, Boeing Co is ready on Friday for the US government to declare its revolutionary 787 Dreamliner safe to fly passengers.

Operating certification by the Federal Aviation Administration will enable Boeing to make the first delivery of its plastics-based airplane next month to Japan's All Nippon Airways.

FAA certification will be granted at a ceremony on the Boeing flightline in Everett, Washington.

The Dreamliner, which promises to raise the bar for fuel efficiency and passenger comfort, is nearly three years behind its original schedule and at least several billion dollars over budget by some outside estimates.

"It's momentous. A few years back no on thought this day would come. We pretty much have one step left and that's delivery," said Alex Hamilton, managing director with EarlyBirdCapital.

With 827 orders for the plane on the books, the Dreamliner may be the most hotly anticipated aircraft in the history of the storied company.

The airframe is made largely of light-weight carbon composites that help lower fuel costs for airlines. The composites also enable various improvements for passengers such as more comfortable cabin air pressure and bigger windows.

Development and construction make unprecedented use of a vast global supply chain that could slash production costs if it works correctly.

"It will completely change the way that aircraft have been manufactured until now," Hamilton said.

Boeing expects a production rate of ten 787s per month by the end of 2013. Kinks in the supply chain, however, have caused several of the embarrassing program delays.

Boeing, which competes with EADS unit Airbus for commercial plane orders, has said that it would bring more of the work on future models back in house.

It is unknown how long it could be before the 787 program earns a profit. Boeing Chief Executive Jim McNerney said in June that the program faces financial headwinds, and he declined to say when the 787 could make money.

The CEO has long insisted that while Boeing may have stumbled since proposing the aircraft eight years ago, it has built a plane that airlines around the world want and need for the long term.

Boeing does not disclose how much is has invested in the plane's development.

As Boeing celebrates FAA certification, the company continues to grapple with program challenges.

Boeing is mired in a legal dispute with one of its top labour unions in Washington State, where it has traditionally built its aircraft.

The International Association of Machinists and the National Labour Relations Board have accused Boeing of building a non-union 787 assembly plants in South Carolina to punish the IAM for past strikes.

Boeing blames one of its seven program delays on a 58-day strike in 2008 over a contract dispute, but it rejects the notion that placement of its second assembly line was retaliatory.

Boeing plans to assemble seven 787s a month in Everett and three more in South Carolina.

Copyright Reuters, 2010