SEATTLE (Bloomberg) - Boeing Co., the world's second- biggest commercial-plane maker, said it's still working through "wrinkles" in the supply chain for its new 787 Dreamliner and will deliver the first aircraft as scheduled in late 2008.

There are still "significant supply chain wrinkles," Scott Carson, chief of Boeing's commercial airplane group, said yesterday on a conference call with reporters. Parts shortages are declining and there's greater availability of fasteners needed to assemble the aircraft, Chicago-based Boeing said.

The Dreamliner has 762 orders valued at more than $120 billion, making it Boeing's most successful new aircraft in sales. The company on October 10 delayed first delivery by six months to as late as December 2008 because of parts shortages and so it can complete work suppliers should have finished.

The next milestone comes next month, when the 787's power will be first switched on.

"This will be the next date for investors' diaries," wrote Robert Stallard, a Banc of America Securities analyst in New York, who has a "buy" rating on Boeing's shares. "This is an important knowledge point, at which the company can retire a significant amount of risk on the program."

Powering the first plane will allow fuller testing of the aircraft's basic systems. The initial flight test is still scheduled for the first quarter of 2008, Boeing said today.

All six of the test aircraft will be built by the end of the second quarter, said Pat Shanahan, who Boeing placed in charge of the program on October 16.

Also yesterday, Boeing backed its plans to deliver 109 Dreamliners by the end of 2009. Mr. Shanahan warned that remaining on schedule "assumes no major unknowns are uncovered in flight testing."

Boeing said that for the first time in the company's history, it and the Federal Aviation Administration agreed on all the plane's testing requirements prior to flight testing.

Boeing fell $1.74, or 1.9 percent, to $90.90 in New York Stock Exchange composite trading.

The stock has risen 1.1 percent in the past 12 months. Airbus SAS, based in Toulouse, France, is the world's largest plane maker.

The company will pay penalties to customers affected by the delay. The cost of penalties has not been disclosed.

About 50 percent of the Dreamliner's weight will come from carbon-fibre composites instead of traditional aluminum, making it the first airliner of its kind. The lighter material increases fuel efficiency.

The 787 is also Boeing's first attempt at a new production process where suppliers deliver fully completed wing and fuselage parts that will ultimately be assembled in three days at Boeing's plant in Everett, Washington.

One supplier is Spirit AeroSystems Holdings Inc., a former Boeing unit which is in charge of building the plane's nose.

The section will have a cockpit and landing gear already installed when it leaves Spirit's factory in Wichita, Kansas.

Other large parts are being shipped from Japan, Italy and North Carolina.