Boeing CEO: Lingering engine fix will push back first flight and delivery of 777X

A lingering engine fix on Boeing's new widebody 777X jet will delay its first flight until early next year and will push back first delivery of the plane until the end of 2020, Boeing CEO Dennis Muilenburg told an investors' conference in New York this week.

"We are addressing engine issues, and GE has had some challenges on the first engine that we discovered in some of the reliability testing," Muilenburg said, discussing the company's outlook at the Jefferies Global Industrials Conference in New York City on Wednesday.

"They're making some component changes," Muilenburg added. "We believe we have our arms around the change that's required, but some additional testing has to be done yet, and as a result we don't expect first flight to occur until early next year."

The further delay of Boeing's big new jet — already running months later than the company had initially anticipated — marks yet another setback for Boeing as it grapples with the ongoing crisis of its grounded 737 MAX jet program. Delay of the 777X's entry into service could hit both Boeing's airline customers and its suppliers.

"We're still driving towards first delivery by the end of 2020, but there is pressure on that schedule because of the delay in the engine and first flight," Muilenburg said.

GE Aviation executives previously revealed at the Paris Air Show in June that their engineers had come up with a fix for the problem with the new GE9X engine, but extensive testing required to certify the engine likely wouldn't be completed until "later in the fall." Boeing won't fly the 777X, which initially had been planned to enter service by the middle of next year, until the engine is certified.

Days before the revelation in Paris, an executive for Gulf carrier Emirates, the first customer of the 777X, had said delays in the jet program could squeeze the airline's timeline, which then depended on taking delivery of the first jet next June.

It typically takes a year or more to go from first flight, through the certification of the airplane by the Federal Aviation Administration (FAA), to entry into service — assuming no unexpected hitches. On the 737 MAX program, for example, the plane entered commercial service 16 months after first flight.

As for its troubled 737 MAX program, Boeing still remains optimistic the jet will win regulatory approval to return to service "early in the fourth quarter," Muilenburg said.

The MAX has been grounded since March, following the second of two crashes within five months that killed 346 people. A problem with an automated anti-stall flight control system, known as MCAS, has been implicated as a contributing factor in both crashes. Boeing is now working on a software overhaul for the flight control system.

"We still anticipate submitting that certification package to the FAA in the September time frame, so working towards a return to service for the MAX early in the fourth quarter," Muilenburg said.

He added Boeing is working on training and simulations with airline customers around the world to ensure a quick return of MAX jets to fleet operations when regulatory approvals come.