October 7, 2011 / 7:30 PM / 8 years ago

UPDATE 2-Cargolux: no deal reached on Boeing 747 delivery

* Cargolux reports progress but no deal for 747 delivery

* Says talks to continue over the weekend

By Philip Blenkinsop and Kyle Peterson

Oct 7 (Reuters) - Cargolux Airlines International on Friday said it has made progress but has not reached a deal to resolve a contract dispute that abruptly blocked a scheduled delivery of the first Boeing Co 747-8 Freighter last month.

The freight carrier said talks would continue over the weekend and that it would provide an update when a deal is reached. The company gave no estimate for when that would be.

The elongated version of Boeing’s largest plane had been set for delivery Sept. 19, but Cargolux suddenly refused to take the plane, embarrassing the world’s second-largest aircraft maker.

“We continue to work with Cargolux and look forward to delivering its airplanes,” said Boeing spokesman Jim Proulx.

Boeing and its customer previously had declined to identify the source of their friction.

But last week Akbar Al Baker, Chief Executive of Qatar Airways, which recently took a 35 percent stake in Cargolux, said the delay was because of General Electric Co engines not meeting performance guarantees.

He said the issue had been resolved, and that the plane would be delivered around Oct. 12. But he declined to say whether Luxembourg-based Cargolux would receive compensation from GE for the engines not meeting agreed standards.

Boeing has taken 75 orders for the 747-8 Freighter, which lists at $319.3 million, according to the company’s website.

Another customer, Atlas Air Worldwide Holdings , last month terminated orders for three early-production Boeing 747-8 Freighter jets, citing lengthy delivery delays and “performance considerations.”

Boeing also is testing a passenger version of the updated 747-8, dubbed the Intercontinental, which it plans to deliver in the fourth quarter to an unidentified VIP customer.

The upgraded 747 promises to burn less fuel, and the passenger version offers more comforts. The plane also boasts new wings, a new tail, state-of-the-art engines and a new cockpit.

Production of the 747-8 has been delayed by more than a year.

The 747 was the world’s largest airplane until 2005, when EADS unit Airbus unveiled its A380.

Last month, Boeing finally made first delivery of its 787 Dreamliner, a carbon-composite plane, capping three years of delays to delivery of that plane. The lightweight, fuel-efficient 787 represents a bigger leap in technology than the revamped 747-8.

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