Boeing: 787 on track to fly, will make money

Boeing Co.'s tests on repairs to the first 787 Dreamliner "went pretty well" and the plane will both fly this year as planned and eventually make money, Chief Financial Officer James Bell said.

"It's going to make a lot of money over time," Bell said of the delayed jet today in remarks broadcast online from a Bank of America Merrill Lynch conference in New York. As with most new-plane programs, "the profitability is a lot less at the front end and grows over time."

Over the next several days Boeing expects to finish evaluating the tests completed Nov. 30 on strengthened parts of the first test plane's fuselage. Composite layers along the wing had delaminated in June testing. The 787, the first airliner to have a plastic body, is running more than two years late because of development and production problems.

"The test physically went pretty well," Bell said today. "We just now have to go through the data and make sure it performed as expected."

The Chicago-based company is focusing on liquidity and efficiency as it faces a "challenging" 2010 while trying to finish the 787 and 747-8 development programs and get those jets certified to enter service, Bell said. Airlines typically make the bulk of payments only once planes are delivered.

Through September, Boeing had accommodated 215 requests from customers to defer orders scheduled for various years as carriers struggled to get financing even while air-travel demand dropped because of the recession. Funding options are increasing now, Bell said.

Deferrals Slow

"We haven't seen a significant number of new deferral requests since the third quarter," he said.

UAL Corp.'s United Airlines today said it agreed to buy 25 Dreamliners and 25 Airbus SAS A350s to replace its aging 767s and 747s. Boeing has 840 orders on the books for the 787 and will have 865 if the United agreement is completed, making it the best-selling new plane in the company's history.

Boeing's decision to make a $1.5 billion stock contribution to its pension plans, rather than the $500 million cash infusion that had been planned, will boost operating cash flow this year to more than $3 billion, up from the $2.5 billion that had been forecast, Bell said. Operating cash flow will probably be flat next year, he said.

Bell repeated that 2009 profit will drop to $1.35 to $1.55 a share, on sales of $68 billion to $69 billion because of billions of dollars of charges related to its delayed new-plane programs. Boeing is the world's second-largest commercial-jet maker, trailing Toulouse, France-based Airbus. It also is the second-biggest defense contractor, after Lockheed Martin Corp.

Boeing declined 16 cents to $55.66 at 4:15 p.m. in New York Stock Exchange composite trading and has risen 30 percent in a year.