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Boeing to take $1b charge over delays

Associated Press / October 7, 2009

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CHICAGO - Boeing will record a $1 billion charge because of a delay in producing a new version of the 747 freighter jet, the company said, blaming slow sales and late design changes.

It is the second time in four months the company has announced delays in delivering a new aircraft model. In June, it said there would be further delays for the 787, a highly anticipated passenger plane that’s more than two years behind schedule. The airplane maker is grappling with dwindling orders amid the global economic downturn, which has undercut demand for air travel and cargo services.

Boeing said it would book a $2.5 billion charge in the third quarter for the first three 787 test planes, which lack commercial value.

The 787 delays are expected to cost Boeing billions of dollars in penalties and costs. Airline customers and Wall Street analysts have grown skeptical of the company’s timetable for the plane. Still, the 787 remains Boeing’s best-selling new plane to date, with 850 orders.