Russia's S7 cancels Boeing order

The 787 Dreamliner is now two years behind schedule

Russian airline S7 has cancelled an order worth $2.4bn (�1.7bn) for 15 Boeing-787 Dreamliner aircraft.

It is the first airline to cancel a major contract for the 787.

The news will come as a blow to Boeing. The launch of its new jetliner has been delayed by a strike by machinists and production problems.

S7 did not give a reason for the cancellation but said it "retains interest in using the Dreamliner" and will look to lease the planes instead.

A Boeing spokesman said the company did not comment on customer discussions.

Production of the aircraft was delayed after a two-month strike by machinists in a row over pay and job cuts last year. It has also struggled with design problems and parts shortages.

Boeing still aims to deliver the first Dreamliner in 2010.

On Wednesday Boeing said it planned to cut 10,000 jobs this year.

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