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Thu 10 Apr 2008 05:55 PM

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Gulf carriers largely unaffected by Boeing delay

Gulf airlines say no impact from Boeing 787 delivery hold-up, no plans to cancel orders.

State-owned Dubai Aerospace Enterprise (DAE) said on Thursday its order for Boeing 787 aircraft is unaffected by a production delay because delivery is not due until 2016.

Boeing announced the third major delay for the plane on Wednesday, promising first delivery in the third quarter of 2009, over a year after the original target of May this year, with an indefinite delay for a short-range model favoured by the Japanese carriers.

"DAE Capital is not impacted by the delay in the delivery schedule of the B 787s," DAE unit CEO Bob Genise said in a statement carried by newswire Reuters.

DAE Capital is expecting its first delivery to commence in 2016 and is "confident that Boeing is committed to its customers and its new program schedule," Genise said.

Boeing won an order from DAE for 100 aircraft in January worth $10.9 billion at list prices, including for 15 of the 787s.

Bahrain's Gulf Air also said it had no plans to cancel its order of at least 16 Boeing 787 aircraft after the plane maker announced a further six-month production delay.

"We have no plans to cancel the order after news of the delays," Adnan Malek, the carrier's acting head of corporate communications told Reuters.

"The company's order will not be affected because the delivery is not due until 2016.There is a clause in the contract that says we could receive compensation if there are delays, but it's too early to talk about that."

Gulf Air has an order of 16 of the 787s with an option for eight more.

More than 50 airlines are waiting for 892 Boeing 787s, worth a combined $145 billion at list prices.

Other Middle East buyers of the 787 include Qatar Airways and Kuwait Aviation Lease and Finance Company.

Updesh Kapur, a spokesman at Qatar Airways, which has 30 firm orders and 30 options for the 787, could not immediately comment.

The problems at Boeing mirror embarrassing and costly delays at rival Airbus, a unit of European aerospace group EADS, which was two years late with its A380 super jumbo.

The 787 has been delayed as Boeing makes slow progress on assembling the plane and struggles to make suppliers perform.

Its plan was to outsource almost all major manufacturing to outside companies and then assemble the plane itself but found this makes it hard to monitor mistakes and delays.

Boeing unveiled the aircraft in July last year. The 787 is made up of 50% carbon composite materials and another 15% titanium, making it much lighter and more fuel efficient than existing aircraft of the same size. (Reuters)

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