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Boeing and GE Face Delays in Delivering New 777 Passenger Plane to British Airways

Strategic Insights

— 1 min read

Delays in the engine test programme have cast a shadow over the timely delivery of British Airways' newest Boeing 777 passenger plane, valued at $1.5 billion. The manufacturing team, comprising Boeing and engine-maker GE, faces a tight deadline to deliver the first jet to the airline by the end of this month as planned. Failure to meet this deadline will result in financial penalties and a temporary shortfall in the airline's fleet, forcing British Airways to lease spare jumbos to make up for the gap.

Key Takeaways:

  • The first delivery of the 15 Boeing 777 jets ordered by British Airways is planned for late September, but the timing is tight due to engine test programme issues.
  • GE will incur financial penalties if the delivery slips into October, as per the contract signed in 1991.
  • The financial embarrassment of paying for leased spare jumbos will be a minor concern compared to the diplomatic humiliation of delays to such a high-profile delivery.
  • United Airlines was the first airline to operate the 777, but powered by Pratt & Whitney engines, not GE engines.
  • British Airways plans to use the 777 on European and Middle East routes initially, to obtain flying hours and certification for non-stop transatlantic flights.
  • The delivery of the first four additional jets is scheduled for the next six months, with the remaining 10 jets to be delivered later in 1996.

Statistics:

  • British Airways' order for 15 Boeing 777 jets is valued at $1.5 billion.
  • The first delivery date slipped from 15 September to the end of this month due to engine test programme issues.
  • Four additional jets are scheduled for delivery within the next six months.
  • The remaining 10 jets are planned for delivery later in 1996.
  • British Airways is planning to lease spare jumbo jets to cover the fleet gap.

Sources:

  • A British Airways source close to the programme
  • Boeing and GE officials (hope of delivery on 28 September)
  • United Airlines (operation of 777 on London-Washington DC and Newark routes)
  • British Airways (delivery schedule and planned use of 777)

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