The 787 Dreamliner, Boeing's highly anticipated counterweight to the Airbus 350 , will not see the skies until December 2008. The Dreamliner was originally supposed to hit the market in May 2008, but on Wednesday the aerospace company acknowledged that its much-touted 787 had encountered unanticipated delays in the supply chain. The first test flight has now been pushed back to the first quarter of 2008.

Boeing said Wednesday it had had problems obtaining the right parts from suppliers and has been confronted with a shortage of fasteners and other small parts crucial to holding the sections of the plane together. Jim McNerney, chairman and CEO of Boeing, said that he was disappointed in the delays, but that the reasons for it related to the lagging supply chain and did not concern structural or design problems of the 787. "We are very confident in the design of this airplane," McNerney reported to the Associated Press. "It'll be a 25- to 30-year success, one of the fundamentally new things in aviation."

The company has said that the 787, aside from featuring increased cabin comfort, would fly faster and farther than all other medium-sized jets -- and use 20 percent less fuel. The Dreamliner is the first new American commercial jetliner to be produced in 13 years.

The Dreamliner will also be the world's first commercial airplane made primarily of carbon-fiber composites, rather than aluminium, as the composites are lighter, more durable, and less prone to corrosion. The material also reduces maintenance costs and improves fuel efficiency.

Boeing executives said that an aggressive production schedule would enable them to keep to the longer-term schedule, which anticipates 109 deliveries by the end of 2009, including to the Japanese All Nippon Airways.

The delay, however, will also result in the company having to payout hefty penalties to its customers. Australian airline Quantas, which ordered 65 Dreamliners, is among those is seeking payment for the delay. CEO Geoff Dixon told Agence France Presse that "compensation issues will be the subject of commercial negotiations between the Qantas and Boeing companies."

Production of the 787 is still far ahead of the Airbus A350, its European competitor's mid-size jet, which is not due to hit the market until 2013. Airbus has also experienced problems with its much-hyped superjumbo A380, with lengthy delays wiping billions off the company's profit forecasts and sending many orders to Boeing.