Boeing to boost spending on developing 787 jets

Boeing Co. forecast on Wednesday projected large increases in spending this year and in 2007 on development of the company's new 787 passenger aircraft and the forthcoming jumbo jet derivative, the 747-8.

While announcing strong quarterly earnings at a teleconference with analysts, Boeing executives tried to dispel any suggestion that the increased 787 costs meant the program was running into the similar trouble facing Airbus.

The net earnings of the aerospace and defense giant in the third quarter were 694 million U.S. dollars, or 89 cents a share, well exceeding Wall Street expectations. This was partly down to profit margins approaching 10 percent in the company's commercial division.

However, that still represented a 31 percent fall from 1.01 billion dollars, or 1.26 dollars a share, in the year-earlier third quarter. This was mainly due to a previously announced 22 cents per share charge for shutting down Connexion, the company's on-board aircraft internet service.

Boeing said its total projected research and development spending was now 3.2 billion dollars in 2006 and 3.3 billion in 2007 -- together almost a billion dollars more than forecasts by the company five months ago.

Chief Executive Jim McNerney said at the teleconference that the increased spending was merely "aggressive contingency planning" and the company was trying to figure out the issues concerning the 787 program.

He revealed that the airplane's weight remained "a dogged issue," and a team dedicated to resolving it was working both within Boeing and with the project's major partners.

But he said such problems were anticipated and had not reached a level that could perturb the 787 program, which had so far achieved huge sales success with 455 customer orders and commitments.

A Boeing spokesman confirmed that the program remained on schedule for the first flight of the 787, dubbed the Dreamliner, in late August next year and first delivery to All Nippon Airways, of Japan, in May 2008.

Analysts recently expressed concern over the 787 program after Boeing's European rival Airbus delayed its delivery of the A380 superjumbo by at least two years beyond the original schedule because of technical problems.

Source: Xinhua