Boeing Co. delayed delivery of the 787 Dreamliner for the third time in six months, saying the aircraft won't be ready until the third quarter of 2009 because of parts shortages that have since been resolved.

The world's second-largest maker of commercial jets rose the most since November 2006 in New York trading because the postponement was no longer than analysts forecast and Chicago- based Boeing said its 2008 profit projections remain intact.

The new date, disclosed by Boeing today in a statement, puts the Dreamliner at least 14 months behind its original schedule of May 2008. Boeing had said in January it would have the 787 to first customer All Nippon Airways Co. in early 2009. The time slip narrows an advantage the plane had with rival Airbus SAS's A350 jetliner, whose debut has stretched to 2013.

The delay ``came in on the conservative side of expectations,'' said Myles Walton, an Oppenheimer & Co. analyst in Boston with a ``market perform'' rating on Boeing. ``It's certainly a credible schedule if nothing else goes wrong.''

Boeing gained $3.09, or 4.1 percent, to $78.11 at 9:56 a.m. in New York Stock Exchange trading. Shares earlier reached $78.60 in the biggest increase since Nov. 7, 2006.

The company has lost a quarter of its market value since postponing the 787 in October and again in January because of parts shortages and a new assembly process that relies heavily on vendors. The delays mar what has otherwise been Boeing's most successful new-plane sales campaign ever, with 892 orders valued at about $154.3 billion.

Second Setback

The delay is the second setback for Boeing in six weeks. The company, also the second-largest defense contractor, on Feb. 29 lost a $35 billion program for U.S. Air Force aerial refueling tankers to Northrop Grumman Corp. and the parent of rival planemaker Airbus SAS. Boeing had been the only builder of Air Force tankers for more than 50 years.

The company said it will now deliver just 25 Drealiners next year, less than a quarter of what had originally been planned. The delays will increase research and development costs, Boeing said, without changing 2008 profit projections. The first test flight is now targeted for sometime in the final three months of this year instead of later this quarter.

``We deeply regret the disruption and disappointment these changes will cause for our customers, and we will work closely with each of them to minimize the impact,'' Boeing Commercial Airplanes President Scott Carson said in the statement. He didn't discuss penalties Boeing may have to pay, which analysts including Walton predict will reach billions of dollars.

`Addressed the Challenges'

The initial powering up of the 787 will happen before June 30, program manager Pat Shanahan said in the statement. He said Boeing has ``addressed the major challenges that slowed our progress'' such as parts shortages and engineering changes and now is focused on installing electrical systems.

The revised dates provide ``some additional schedule margin for dealing with other issues we may uncover in testing prior to first flight and in the flight test program,'' Carson said.

Analysts including Richard Safran of Goldman Sachs Group Inc. and JPMorgan's Joseph B. Nadol stirred talk of a new delay in early March. Nadol said March 19 that the chairman of International Lease Finance Corp., the model's biggest customer, was predicting a third-quarter target date because of a design change on the structural box that connects wings to the plane.

All Hands on Deck

In February, Boeing said it had reassigned some senior executives from its defense unit to work on the Dreamliner project. The company also suspended some work on the 787-3 short- haul version, which wasn't due to go into service until 2010, so workers could focus on the larger model that's in higher demand and has a more pressing deadline.

The planemaker said today the 787-9, a larger derivative of the model, will take the 787-3's place as the first variant to be produced, with deliveries starting in 2012. A target for 787-3 shipments wasn't specified.

Boeing's last specific delivery forecast for 2009 was 109 planes. Carson said Jan. 16 that target was no longer feasible, without providing a new projection. Delivery of aircraft is critical to earnings because manufacturers book sales when a plane is handed over to the customer.

The 787, Boeing's first new model since the 777 in 1990, is part of a strategy to reclaim the position of world's largest commercial planemaker. Toulouse, France-based Airbus, a unit of European Aeronautic, Defence & Space Co., surpassed Boeing in 2003.

Work With Vendors

About half of the Dreamliner will be lighter carbon-fiber composites instead of traditional, heavier aluminum, making it the first airliner of its kind. The reduced weight, along with new engines and modern aerodynamics, will make the plane about 20 percent more fuel efficient than comparable models. The jet will feature quieter engines and passenger windows that are the largest on any commercial airplane, Boeing has said.

The program is also Boeing's first attempt at a production process where suppliers deliver fully completed wing and fuselage parts for final assembly at Boeing's plant in Everett, Washington. To gain more control over the process, Boeing agreed March 28 to buy Vought Aircraft Industries Inc.'s stake in a venture that assembles some of the sections of the plane's fuselage.

Spirit Payments

Spirit AeroSystems Holdings Inc., which builds the nose section of the aircraft, said today that Boeing agreed to give it cash advance payments this year as though the 787 were on its original timeline. The first payment, $124 million, will be reflected in Spirit's first-quarter results, the Wichita, Kansas- based partsmaker said in a regulatory filing.

``They want to get it right, and they're not going to fly it until it is right, and they will get it right,'' Colin Glinsman said last week. He oversees about $25 billion in assets as chief investment officer at Oppenheimer Capital in New York and says Boeing was among the top five holdings in his accounts at the end of the last reporting period. ``It may be later than they'd expected, but they're doing the best they can.''

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