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Dreamliner 787: More orders coming, more cancellations, says Boeing

Dreamliner orders took a hit with one Chinese airline cancelling its order for 24 Dreamliners. But another Chinese airline said Wednesday it would not cancel its Dreamliner order.

By Jack Kim and Fang YanReuters / October 19, 2011

All Nippon Airways' (ANA) first Boeing 787 Dreamliner aircraft in Tokyo. The Dreamliner will go into service for Japan's ANA on October 26.

REUTERS/Toru Hanai

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Seoul/Beijing

Boeing Co stands to lose more orders for its 787 Dreamliner as airlines balk at delayed delivery dates, but the order book remains firm and demand for the fuel-efficient plane is likely to pick up, a Boeing executive said Tuesday.

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"Frankly, as we look forward, we expect to see the Dreamliner order base increase, we expect to see more orders, we expect to see more cancellations, especially as we go through mitigation with our customers,'' Boeing Marketing Vice President Randy Tinseth told reporters in Seoul.

Hainan Airlines Co Ltd , China's fourth-largest carrier, said on Wednesday that it will stick to its aircraft order with Boeing Co , despite a growing number of cancelled or changed orders within the industry.

"The plan to introduce new aircraft will proceed as normal," a spokesman from the Chinese airline told Reuters. "At present, we don't plan to cancel our order or change aircraft model."
Earlier this week, China's third most valuable carrier China Eastern Airlines Corp Ltd said it had terminated an order for 24 Boeing 787 Dreamliners because of delivery delays and would instead spend $3.3 billion on 45 new Boeing 737 aircraft.

"This indicates that China Eastern is taking a bearish view on long-haul and believes the recovery in the United States and Europe won't come soon, so they don't want to invest so much on big planes for long-haul,'' said Kelvin Lau, an analyst at Daiwa Securities.

The Dreamliner is a light-weight, carbon-composite widebody that promises greater fuel savings and passenger comfort. It represents a huge leap in technology for the aviation industry, but the plane is also three years behind its original schedule because of kinks in the sprawling global supply chain.

Boeing still has more than 800 orders for the Dreamliner on its books. It made first delivery of the craft to All Nippon Airways last month.

IMPACT ON THE BACKLOG

Many in the industry believe the supply chain problems that plagued Boeing's development of the 787 could also slow production of the aircraft.

Boeing aims to increase the production rate from two a month to 10 a month by the end of 2013, but some analysts believe that is overly ambitious.

Boeing's Tinseth Tuesday reaffirmed that production goal, saying the company would ``slowly but consistently increase the rate until the end of 2013.''

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