787 Delivery schedule could slip again.

Boeing said on Thursday that issues raised in its 787 Dreamliner flight tests could delay first delivery of the long-awaited carbon-composite aircraft into the first part of 2011, but the company also expects an uptick in new plane demand over the next two decades.

Scott Fancher, general manager of the 787 program, said the plane maker has not yet made a decision to move the first delivery to Japan's All Nippon Airways. First delivery is currently scheduled for the end of 2010.

"We've seen some issues recently that have pushed our schedule margin a bit," Fancher said.

The issues relate to "instrument configuration" and inspection work, Fancher said. He said the possible delay is not related to plane operations.

News of the potential delay comes ahead of the world's biggest air show next week at Farnborough near London. Boeing plans to display a Dreamliner at the air show.

The 787 is already more than two years behind its original schedule. Production of the plane was delayed five times in three years, and the first flight was postponed six times, because of parts shortages, design problems and a two-month strike at Boeing's factory in 2008.

Last month, Boeing temporarily stopped flying its test 787s after identifying a problem affecting the horizontal tail.

"We wanted to give a little bit of a cautionary note that things could push into the first part of next year," Fancher said on Thursday. "Our schedule still shows delivery for the end of the year."

Boeing said on Thursday it has chosen North Charleston, South Carolina, as the location to build a new facility to make parts for the Dreamliner interior.

The factory will be 10 miles from Boeing's 787 final assembly and delivery site in North Charleston. Construction is expected to begin in the fourth quarter of 2010.

(Reuters)