Boeing May Delay Dreamliner Until 2012: Morgan Stanley (BA)

Boeing Co. BA may delay the 787 Dreamliner for up to another year, Morgan Stanley told clients Wednesday. It would be the seventh postponement of the infamous design project, and put the project four years behind schedule. Last week's electrical fire during a flight test may necessitate a redesign of software and hardware, Heidi Wood, a New York-based analyst with Morgan Stanley, said today. She estimated that the first plane to be delivered could be as late as 2012, far later than the May 2008 goal. Shares of Boeing are down $0.17, to $62.61. According to Bloomberg's Susanna Ray, "The 787 test fleet remains grounded for a ninth day as the investigation continues into the Nov. 9 fire. The Dreamliner is the first airliner built with carbon-fiber composites and uses an all-electric system to save fuel. It has been delayed six times from its original May 2008 target, as Boeing struggles with the new materials, parts shortages, redesign work and a greater reliance on suppliers." The company brought two of the six test jets back to its Seattle base Tuesday. Boeing is still investigating the cause of the fire, and potential solutions may not be easy, Wood cautioned. The issue appears "bigger than a simple, single component failure," Wood told clients. "Redesign may be necessary and it looks like this affects at a minimum the test-flight airplanes, potentially the 28-odd planes already built." Boeing can't decide when flights will resume until it completes the investigation and assesses whether design changes are necessary, said Lori Gunter, a Boeing spokeswoman.