Boeing said Thursday that its often-delayed 787 Dreamliner would take to the air for the first time before year's end and that the first delivery of planes to airlines would be late next year.
Investors took that as a positive step after the company failed to deliver on senior management's assurances that the revolutionary jetliner would make its test flight by the end of June. They bid up Boeing's BA share price by 8.4% to $51.82.
Boeing also said it would take a $2.5 billion charge against earnings, or $2.21 a share, in the current quarter on the plane. That's a write-down of the value of the first three 787s used in testing.
The 787 is the first jetliner made mostly of high-tech composite materials rather than conventional aluminum and steel. The lightweight plane promises to lower airlines' operating costs as much as 20% compared with similar conventional jetliners.
The plane originally was to have had its maiden test flight two years ago. It has been delayed five times. The latest came when the company said it needed to reinforce an area on the side of the plane.
Boeing officials calmed concerns of some investors and analysts who had worried that delay costs and penalty payments for late delivery could turn the 787 into a money-loser for the first year or two after deliveries start.
James Bell, Boeing's CFO, told analysts and reporters that the company wouldn't lose money on the first copies of the 787 delivered. In July, he declined to offer assurances until the company determined how much the latest delay would cost.
Boeing CEO Jim McNerney acknowledged that "this program has had its challenges, and there still is work to be done." But he insisted that the "787 and the fundamental innovation it represents remains on track to become a true game-changer for our airline customers."
Despite delays, Boeing still has a record-shattering number of orders for 787s, more than 800, on its books.
Investors reacted positively because a period of uncertainty seems to have ended, said analyst Richard Aboulafia of The Teal Group in Fairfax, Va. "There's nothing quite so awful as just floating out there without any kind of plan," he said.
He added, however, that Boeing's track record on when the 787 would fly raises credibility questions.
"The last problem was something that emerged at the very last minute," Aboulafia said. "We don't know what will emerge at the last minute this next time around. That's the kind of credibility problem you have when you've just announced your sixth plan for testing and delivery of the same airplane."
Boeing's 787 customers also are chagrined by the delays. All Nippon Airways, the 787's launch customer, said in a statement that taking more time for testing to ensure safety was understandable and necessary. But, it said, "The length of this further delay is a source of great dismay, not to say frustration."
Virgin Atlantic, a customer that has demanded penalty payments, said in a statement that it was disappointed and was anxious to learn what the delay meant for delivery of its 787s.