(RTTNews) -  Aerospace and defense giant Boeing Co. (BA: News ) Tuesday announced a delay in the first flight and first delivery of its 747-8 Freighter. The Chicago, Illinois-based airplane maker also said that it expects a pre-tax charge of about $1.0 billion in the third quarter as higher production costs and difficult market conditions are affecting its 747-8 program.

The Boeing 747-8, officially announced in 2005, is a widebody commercial airliner with variants 747-8 Freighter and 747-8 Intercontinental. It is an evolutionary variant of the Boeing 747, with lengthened fuselage, redesigned wings and improved efficiency. As of 2009, the company has received a total of 105 orders for 747-8.

Boeing said that it now expects first flight of the 747-8 Freighter to occur by early next year with the flight test program taking place in 2010. First delivery of the 747-8 Freighter is now expected in the fourth quarter of 2010. The company's previous schedule for the delivery of the first 747-8 Freighter was the third quarter of 2010.

Boeing also said that first delivery of the Intercontinental passenger variant remains scheduled for the fourth quarter of 2011.

According to the company, of the $1 billion charge, about $640 million reflects higher estimated costs to produce 747-8 airplanes at both Boeing and supplier facilities. As the program assembled major components of initial 747-8 Freighters during the third quarter, late maturity of engineering designs has caused greater than expected re-work and disruption in manufacturing. This is resulting in additional resources being applied on the program and higher supplier expenses, which are the primary cost drivers, Boeing stated.
Further, the company said that the remaining $360 million of the charge relates to challenging market conditions and the company's decision to maintain the 747-8 production rate at 1.5 airplanes per month, nearly two years longer than previously planned. The company also said that higher allocation of fixed expenses and volume-based penalties to suppliers are the main drivers of the additional costs. Because the 747 program is in a loss position, costs associated with these factors will be immediately recorded in the third quarter for future 747-8 deliveries, the company noted.

Earlier, Boeing had rescheduled the first flight and first delivery of 787 Dreamliner, an innovative mid-sized, wide-body, twin-engine jet airliner currently under development. On August 27, Boeing said that the first flight of the 787 Dreamliner is expected by the end of 2009 and first delivery is expected to occur in the fourth quarter of 2010. Deliveries were scheduled to begin in the first quarter of 2010.

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