Another Nightmare for the Boeing 787 Dreamliner

Boeing (BA) keeps running into problems with its 787 Dreamliner. On Tuesday, a test flight in Texas ended in an emergency landing after the electrical-equipment bay caught fire, The Seattle Times reported. Will this aircraft ever get delivered? Wednesday morning, Boeing answered this question by announcing an indefinite delay in 787 test flights.

The 787 is a 250- to 330-seat passenger aircraft that starts at $166 million, and Boeing already has racked up 865 orders -- and an estimated $150.6 billion backlog -- for it. But Boeing also has missed deadline after deadline for delivery of the jet, with seven delays over the last three years. It's currently expected to deliver the 787 in the first quarter of 2011, a date that was pushed back from the previous deadline of late 2010. But don't hold your breath.

During the test flight Tuesday, the pilot detected smoke in the back of the cabin, where flight technicians were monitoring flight data, according to The Seattle Times. The pilot declared an emergency and activated the emergency slides, and all of the 30 to 40 passengers of so-called Dreamliner No. 2 slid to safety on the tarmac in Laredo, Texas.

Wednesday morning, the potential for delay became more concrete. That's when Boeing announced it would delay its 787 test flights until Boeing "better understand[s] the incident," according to Reuters. Fortunately, Boeing has six 787 test aircraft and two of them use engines from General Electric (GE) which have not suffered the same problems as those fitted with Rolls-Royce engines.

Dreamliner Setbacks

The incident is just the latest in a series of nightmares that the Dreamliner has suffered since Boeing proudly unveiled it -- or at least its unflyable shell -- to the public on July 8, 2007 (7/8/07 -- get it?). The 787 previously grabbed headlines in August, when a Rolls-Royce Trent 1000 engine on one of its test aircraft shredded into pieces. This shredded engine was the same model that caused trouble with Qantas's Airbus A380 last week.

What's going on with the Dreamliner? Well, for one thing, it seems to be suffering from Boeing's decision to outsource 60% of the 787's design and manufacture. While Boeing had long outsourced manufacturing, this is the first time it had loosened its tight control on design. The company thought the additional outsourcing would shift more of the costs to its suppliers.

Instead, that decision, coupled with the choice to use composite materials instead of aluminum, has contributed to a string of technical problems and delays. New materials brought a new challenge: a lack of understanding of how those composite materials behave in real-world conditions. And Boeing's suppliers simply don't share its sense of urgency about deadlines or quality.

What caused the smoke in the cabin Tuesday remains a mystery to the public. It also further obscures shareholders' and customers' view into when the 787 will actually land in its customers' fleets. This lack of clarity did not help Boeing's stock Wednesday -- it had lost 2.67% of its value by mid-morning.

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