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Boeing 787 will be overweight, ILFC's Udvar-Hazy says
Bloomberg News
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Published: 3/18/2009 7:20 AM

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Boeing Co.'s first batch of 787 Dreamliners will be overweight and have other performance issues, trailing airlines' expectations, according to International Lease Finance Corp., the aircraft's biggest customer.

Boeing is putting "a lot of resources" into rectifying the problems and implementing production-line improvements as quickly as possible, Steven Udvar-Hazy, chief executive officer of the leasing company, said today at an aircraft financing conference in Scottsdale, Arizona.

"In the long run, this will be an excellent family of aircraft," Udvar-Hazy said. "I just pity those airlines that will get the first few, because those will not be the standard by which the 787 will be built on later," he told an audience of about 1,000 aircraft brokers, lessors and bankers at an International Society of Transport Aircraft Trading conference.

The Dreamliner is almost two years behind schedule, with first deliveries now due at the beginning of 2010, because of parts shortages and defects, redesign work and problems with suppliers. Shanghai Airlines Co. said last week it was in talks with Boeing about canceling or deferring some of its 787 orders because the jet's quality isn't as originally promised.

"All 787s will provide exceptional value to our customers," Boeing spokesman Marc Birtel said in an e-mail, acknowledging the first jets off the line "will weigh more than we would like."

Improvement

"As with all of our airplanes, we will continue to improve them over time," Birtel said.

All Nippon Airways Co., the 787's first customer, is now scheduled take delivery of its 50 Dreamliners starting from early next year.

Besides being overweight, the 787 also has problems with systems and structures, Udvar-Hazy said in an interview.

"A lot of those they'll solve during the certification process, but some of the improvements may not be incorporated until production commences," he said.

Los Angeles-based ILFC, as International Lease Finance is also known, isn't scheduled to start getting its 74 Dreamliners until they've been in production for about two years, so Udvar- Hazy doesn't expect to have to delay deliveries over quality issues. ILFC is the world's largest aircraft lessor.

"We have leased the first 31 of the 74 across nine customers, and not one has said they want out," ILFC Chief Operating Officer John Plueger said in an interview today.

Boeing has logged 33 Dreamliner order cancellations from four customers as the delays mounted and the global recession tightened credit and hurt airlines' earnings. The Chicago-based company now has purchase agreements for 878 planes of the model, making it Boeing's most successful new-plane sales campaign ever.