Boeing Says 787 Still On Track

Boeing said on Thursday that its Dreamliner 787 was still on track for its first flight later this quarter, and the company stood by a previous full-year forecast.

The company said deliveries of new planes, including the 787, set to begin next year would hurt margins even as they produce growth longer-term.

The plane maker told its investor meeting that it planned to keep revamping itself despite the pressures on its commercial and defence businesses.

"The current market uncertainties and evolving customer requirements provide impetus to accelerate our pace of change to better compete and grow," chief executive Jim McNerney told the investor meeting, which was broadcast over the Internet.

Chicago-based Boeing and rival Airbus are suffering as airlines and cargo operators defer plane deliveries amid weak demand in the economic recession.

Boeing said its test flight programme of the fuel-efficient 787 was on schedule to begin this quarter. The plane has been plagued by repeated production delays, and James Bell, the company's finance chief, also said on Thursday that there were "more requests for deferrals."

Although the 787 and new 747-8 freighter will hurt margins initially, Bell said the two plane programmes would generate "significant growth" in the longer term.

Lufthansa Applies For Austrian Takeover Approval

Lufthansa has filed for European Commission approval for its planned takeover of Austrian Airlines, a spokesman for the German flagship carrier said on Friday.

Commission spokesman Jonathan Todd confirmed the EU regulatory watchdog had received Lufthansa's notification, and the deadline for the first phase of the EU's review of the case was June 17.

The European Union's executive Commission had launched an investigation in February into the planned deal, saying it had concerns over the price and restructuring plan.

Lufthansa had agreed in December to buy the loss-making Austrian carrier, expecting the move to make it Europe's biggest airline. As part of the deal, it is taking over Austrian state holding company OeIAG's 42 percent stake in AUA.

The deal also involves the Austrian state assuming around EUR500 million (USD$670.4 million) of AUA debt.

The Commission had said it had doubts the amount of aid had been kept to a minimum and whether Austria's restructuring plan would restore the airline's long-term viability without the need for more funds in the future.

Lufthansa chief executive Wolfgang Mayrhuber has said that the carrier would drop its offer to buy AUA if the EU did not approve all the conditions.

The airline has also said its offer was conditional on reaching at least a 75 percent stake following its public offer. Its 4.49 euro per share takeover offer to shareholders of AUA, submitted in February, expires on Monday.

OTHER DEALS

The European Commission has the power to block mergers across the 27-nation bloc if they violate competition rules or involve illegal state aid.

Once notified, the Commission has 25 working days to conduct a first-stage review. It could approve it or extend the review to 35 working days, to consider either a company's proposed remedies or an EU member state's request to handle the case.

The Commission could also open a detailed second-stage investigation for up to 90 additional working days, which it may extend to 105 working days.

Lufthansa is waiting for decisions from the Commission on two other deals. The EU executive launched an in-depth investigation early this year into the carrier's plan to acquire Belgian SN Airholding, which controls Brussels Airlines, and that decision is expected by June 10.

A decision on Lufthansa's bid to take sole control of UK carrier bmi is expected by May 14.