Test flight target end of year

Boeing employees work near a wing on a 787 fatigue test plane in Everett, Wash. Boeing said Thursday that its long-delayed 787 aircraft will be ready for its first delivery in the fourth quarter of 2010.

Boeing Co.'s long-delayed 787 aircraft is projected to be ready for its first test flight by the end of this year, around the same time the company will decide whether to build a new assembly line for the new jet in North Charleston.

Also, the aerospace giant said Thursday, the initial delivery of the lightweight plane will come in the last three months of 2010.

Boeing originally scheduled the 787's first test flight for the fall of 2007. But production problems have forced the company to postpone trial flights of the next-generation passenger jet. The first delivery to Japan's All Nippon Airways Co. is now more than two years behind its original schedule.

After so many false starts, airline customers and some Wall Street analysts have become more skeptical of Boeing's timetable for the 787, built with lightweight carbon composite parts for fuel efficiency.

Chicago-based Boeing came under sharp questioning in a conference call Thursday after the announcement. One analyst, Howard Rubel of Jefferies & Co., asked why the company's latest schedule is "any better" than ones issued previously.

The establishment of the new test date appeared to reassure some investors, however, as shares of Boeing rose $4, or 8.4 percent, to $51.82 in trading Thursday.

Boeing said it will book a pretax charge of $2.5 billion in the third quarter. That includes a write-off for the first three test planes. Boeing had planned to refurbish and sell those planes, which have been extensively modified, but customers didn't want them.

Overall, the plane's delays are expected to cost Boeing billions of dollars in expenses tied to its halting development and penalties for breaking contract obligations to airlines.

With the 787, the company has adopted a new approach to building airplanes, relying on overseas suppliers to build huge sections of the plane that are later assembled at the company's commercial aircraft plant near Seattle.

That has stretched Boeing's supply chain around the globe and made it more difficult for the company to quickly address problems. Parts shortages, flawed materials and plane sections that didn't fit together properly have hampered production. The latest delay came in June, when the company said it needed to reinforce areas close to where the wings join the fuselage.

To get a more control over its supply chain, Boeing last month bought a vendor in North Charleston that makes aft fuselage sections for the 787.

The $1 billion acquisition of the Vought Aircraft plant has raised hopes that a proposed second assembly line for the jet will be built near the existing factory at Charleston International Airport as the company looks to accelerate production and minimize late deliveries.

Right now, the jet is pieced together in Everett, Wash.

This week, Boeingsaid it would seek permits to build the 787 line at its North Charleston property, but stressed the move was merely a procedural step and that no decision had been made.

Even with all the delays, the 787 remains Boeing's best-selling new commercial aircraft and a priority as it struggles with sharply lower orders caused by weak demand for air travel.

The company and some analysts say the 787 -- Boeing's first all-new jetliner since the 777, which airlines began flying in 1995 -- eventually will prove a financial and technological success.

But not everyone is convinced. Troy Lahr, an analyst at Stifel Nicolaus & Co., said the new schedule is "achievable," but that the program has lost credibility.

"We're not holding our breath," he said.

John P. McDermott of The Post and Courier contributed to this report.