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United to seek payment for 787 delays

February 24, 2012
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CHICAGO—United Continental is looking for compensation from Boeing for its late 787 deliveries.

The airline has orders for 50 of Boeing's new 787s, a midsized jet that has been eagerly awaited because of promised gains in fuel efficiency. Boeing delivered its first 787 in September, about three years late, to Japan's All Nippon Airways.

A filing by United Continental earlier this week said it is "currently in discussions with Boeing over potential compensation related to delays in the 787 aircraft deliveries." The filing added that United "is not able to estimate the ultimate success, amount of, nature or timing of any potential recoveries from Boeing over such delays."

United Continental was supposed to get six new 787s this year, but that has been reduced to five. Boeing has been working to get production of the new planes up to speed. It has built more than four dozen planes so far and every one of them has needed additional work after coming off the assembly line.

Several airlines have sought compensation for the delays. In October, China Eastern Airlines said it would use penalties from a late 787 order that it canceled to pay for part of a new order of Boeing 737s.

On Thursday, Boeing said it was swapping the heads of its 787 and 777 programs. The move takes Scott Fancher, who was brought in to run the 787 program in late 2008 after the first delays were already pushing back the plane's schedule. Now the 787 program will be run by Larry Loftis, who had previously led the 777 program. The 777 has been a hit for Boeing, with 202 orders last year, the best year yet for that plane.

Boeing said the switch was to bring Loftis' production experience to the 787, which is transitioning from startup to production. Fancher will run the 777 to integrate current production of that plane with design work on its eventual replacement, the company said.

Shares of United Continental Holdings Inc. fell 23 cents to $20.41 in afternoon trading. Boeing shares rose 11 cents to $75.96. Both companies are based in Chicago.

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