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Boeing overcomes Dreamliner's nightmare delays

Updated at 1:05 p.m. ET

EVERETT, Wash. - Boeing handed over the key for the first Boeing 787 to All Nippon Airways in a delivery ceremony Monday at Paine Field, near the factory where the planes are assembled.

Hundreds of people took cover from the rain under the wings of two giant 787s. The actual first ANA plane is at Boeing Field in Seattle for a Monday night VIP reception.

ANA signed delivery documents on Sunday and plans to fly its first plane away Tuesday. It goes into service in November in Japan.

Boeing Executive Vice President and CEO of Boeing Commercial Airplanes Jim Albaugh told workers in the crowd the day was one of the most significant in the history of commercial aviation.

"You have no idea what you've achieved," he said. "It's not often in a career or a lifetime we have a chance to do something like this."

Albaught then handed the aircraft's key to Shinichiro Ito, president and CEO of ANA.

"Please take good care of it," Albaugh said. "We're very proud."

The new jet, which was supposed to be flying passengers three years ago, has been delayed by production and design problems. But now it's here, and airlines expect it to offer travelers much more comfort, open up new routes and provide significant fuel savings.

Airlines love the jet, which Boeing calls the Dreamliner. They've ordered more than 800, well above levels for previous new jets.

"A lot of carriers are betting that this is going to be a winner," says George Hamlin, president of Hamlin Transportation Consulting in Fairfax, Va.

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Instead of the usual aluminum skin, most of the 787 is covered in carbon fiber, basically a high-tech plastic that is strong but lightweight. Military planes and portions of other jetliners have used that material for years, but this is the first time so much has been used on an airliner.

The new material brings improvements that passengers should notice.

Its strength allows windows to be bigger and higher, so passengers don't have to hunch over to see the horizon. Electronic dimming replaces pull-down shades. That should mean you'll no longer be blinded when the guy next to you falls asleep with the shade up.

Finally, the cabin is pressurized to the equivalent of 6,000 feet, instead of the usual 8,000 feet. That means air pressure will be closer to what passengers are used to on the ground. And without corrosion-prone aluminum skin, the humidity can be kept higher. Those two changes should reduce dry noses and throats.

All Nippon plans to begin flying the 787 from Tokyo to Okayama-Hiroshima on Nov. 11. The first international route will be Tokyo to Frankfurt starting in January.

The first U.S. customer is United Continental Holdings Inc., which will get its first 787s next year and plans to fly them between Houston and Auckland, New Zealand, and Houston and Lagos, Nigeria.

Those are good examples of "thin routes" that airlines say the 787 will be good for — routes for which there is regular demand that won't fill a larger plane. The 787's size, fuel efficiency and long range should allow airlines to turn a profit on those routes.

The jet will be as much as 20 percent more fuel-efficient than planes it replaces. Its efficiency was a nice perk when Boeing first proposed the 787 in its current form in 2003. Now it's essential for airlines dealing with high fuel costs.

Building an all-new plane like the 787 is a massive undertaking. Delays stacked up. Boeing was hit with an eight-week strike in 2008. It had to reinforce the spot where the 787's wings meet the fuselage. In November, the company had to delay the plane further after an electrical fire forced a landing during a test flight.

Boeing expects to deliver a combined 25 to 30 of the 787s and new 747-8 this year. To meet the high demand. Boeing has set an ambitious goal of building 10 per month by the end of 2013. No one has ever made a large plane that fast.

Richard Aboulafia, an aerospace analyst at the Teal Group, thinks Boeing will miss that goal because the company hasn't smoothed out its production process fully.

It's also not clear when the 787 will make money. Boeing already took a $2.5 billion charge in 2009 on the program, and it owes additional money to customers for the late deliveries. Boeing executives have said they will announce when the jet will be profitable after the first one is delivered.

The 787 list price runs between $185 million and $218 million. Discounts on new jets are common, though. Aboulafia says it's not clear how steep the discounts offered by Boeing were to lock in all the orders.

Boeing rival Airbus hopes to soon launch its new A350, also made with a significant amount of carbon composites. A successful 787 will put pressure on Airbus to meet its fuel-efficiency goals, and to deliver the plane on time.

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