San Francisco , June 14, 2006 (Dow Jones)

"This is a fillip for Boeing, as it adds another bellwether customer for the 787: There may now be some bounce in the stock, given this order, Airbus's woes and the recent sell-off, which has been overdone, in our view," wrote Banc of America Securities analysts in a research note.

Helping drive the Dow Jones Industrial Average higher, Boeing (BA) stock was last up 5.5% to $81.28 on volume of 6.6 million shares, ahead of the 10-day average of 4.62 million. The shares, however, are off about 10% from last month's record high of $89.58 on May 10.

As Boeing and Airbus battle it out for the commercial aviation market, their strategies have diverged in recent years. The A380 represents Airbus' belief that international airlines want to fly between major hub airports with a large plane that spreads operating costs over more passengers, who can then use smaller planes to reach other destinations. The smaller 787 from Boeing represents a different approach that de-emphasizes hub airports in favor of what's called "point to point" travel.

Both planes push the technological envelope. The size and scale of the A380 make it an unprecedented engineering challenge, while the 787 will be built using composite materials from suppliers around the world. Weight is an issue for both designs, which need to be as light as possible to make them fuel efficient.

"The A380 is still too heavy and they are blaming the electronics and the bundling of the in-flight entertainment equipment," said Doug McVitie, managing director of Arran Aerospace. "So they can't meet their performance guarantees."

Demand for Boeing's 787 continues to build, with initial production of the plane sold out to mostly overseas airlines. Yet another example of that is Singapore Airlines' order.

As a sign of continued strength in Asia's commercial aviation market, Singapore Airlines said it's lining up for 20 of Boeing's 787-9 jets, and is taking purchase rights for another 20. That version of the 787 can carry between 250 and 290 passengers and can fly as far as 8,800 nautical miles. The deal is worth about $4.5 billion, the airline said.

On Wall Street, Goldman Sachs raised its rating on Boeing to in-line from underperform. The upgrade also comes with a new neutral rating on the commercial aerospace sector, up from cautious.

"Given our current view of continued orders, we've revised our delivery forecast upward to 445 aircraft in 2007 and 483 in 2008," wrote the Goldman Sachs analysts. Higher earnings are also expected by the analysts, with a profit of $3.50 in 2006, up from $3.35, a profit of $4.50 in 2007, up from $4.15, and a profit of $5.15 in 2008, up from $4.50.

At Airbus, delayed deliveries of the flagship A380 jumbo jet slammed parent EADS' shares in Paris trading. The situation was severe enough that a top EADS executive apologized to investors who saw as much as a third of the stock's market value wiped out on Wednesday.

For Boeing's portfolio of planes, later deliveries of the A380 could increase the appeal of the 777 and the biggest Boeing jumbo jet, the 747-800.

"We need to see how airlines use their negotiating leverage over the intermediate term before we redraw our delivery schedule again," wrote Howard Rubel, analyst at Jefferies & Co., who noted that Airbus "won't miss again" with the A380 now that it has announced the delay.

The delay comes as Airbus is also reviewing its response to Boeing's 787, which will use more carbon composites than any other commercial plane and relies more on suppliers to produce major components than Boeing ever has before. With the Farnborough Air Show, a critical gathering for the worldwide aerospace industry, starting in just over a month, Airbus is now on the defensive.

"Airbus is doing Boeing nothing but favors right now," said McVitie.