Boeing: 787 on track for year-end delivery

Boeing remains on track to deliver the first 787 Dreamliner by the end of the year, a company official told analysts Wednesday.

More than 500 hours of flight testing have revealed few problems.

"We're feeling pretty good right now," Boeing chairman Jim McNerney said during a conference call after the company reported its first-quarter financial results. "We're seeing very few issues."

The program has a month to a month and a half of cushion in its schedule. That's important in case configuration changes are needed because of flight testing results, he said.

Delays in the program have had an upside. The design is more "mature than we had planned for," McNerney said.

The 787 flew more than two years late.

McNerney also answered questions about the 737, tankers and the airline market during the call.

Cancellations for commercial airliners have slowed, he said.

Boeing took 100 orders for airliners during the quarter and had 17 cancellations. That's an improvement from a year ago, when cancellations exceeded orders.

"The financial outlook for the world's airlines has improved noticeably since last quarter," McNerney said.

Boeing will decide by the end of June whether to increase production on its 737 narrowbody jetliner from 31 a month.

Officials declined to say how much they might boost production. But they are considering two rate options.

"I would just say we're looking at meaningful increases," McNerney said. "I really don't want to signal exactly what we're looking at."

A rate increase would affect Wichita-based Spirit AeroSystems, which builds the 737 fuselage.

Spirit is working closely with Boeing on potential adjustments, said spokeswoman Debbie Gann.

She declined to say how many 737s Spirit could build in a month or whether a rate increase would lead to hiring.

McNerney responded to an assertion EADS executives made Tuesday when they said Boeing's tanker is behind in the development process.

"I'm sure they (EADS) have a substantial amount of development work themselves," McNerney said.

Boeing will undergo development work on the 767 to be used as the tanker's platform and in integrating the military systems. Boeing's work force has taken on many configurations and design changes on the 767 in the past.

"They understand the airplane," McNerney said.

How many jobs a Boeing tanker win would mean for Wichita remains unknown.

"I don't have a specific number," McNerney said. "But a tanker win for Kansas would be huge. We will depend on that work force to do a lot of the modification and integration of the airplane."

Boeing's commercial airplane backlog totals 3,350 planes valued at $250 billion, more than seven times the division's revenue.

For the first quarter, Boeing recorded lower net income and revenue than a year ago.

Revenue totaled $15.2 billion during the January-through-March period, down 8 percent from $16.5 billion for the same time last year.

Net income was $519 million for the quarter, down 15 percent from $610 million a year ago.