787 update, and more on the Dash 10

Published 9:00 pm Monday, March 27, 2006

More from Mike Bair’s 787 program update on Monday:

* Development schedule — Not every work group is running on schedule, but “all-in-all, the composite teams are making really really good progress,” Bair said. “We don’t see any items in front of us. … The key challenges are to remain on schedule and to continue to drive weight out of the plane.”

There has been some “local underestimation of resources,” with managers of some programs not realizing how much manpower they really needed to gear up to get their parts done on time, Bair said. In response, Boeing is helping them “swarm it” — assigning more people to the work teams so that they have the capacity to “muscle it through.”

At the same time, Boeing is trying hard not to tell suppliers how to run their own factories, Bair said. “What we want is insight, not oversight. … it’s a big management exercise to make sure everybody’s where they’re supposed to be.”

* Sales — More deals are coming soon, Bair said. “You should see some announcements in the next few weeks.”

Bair added that Boeing remains closely in touch with the major U.S. legacy carriers, who haven’t got the cash to order jets right now. “We keep everything in front of them.”

Bair also hinted at who potential 787-10 buyers could be — look at the list of 777-200 and -200ER operators. I did. The big buyers for -200s were United, JAL and ANA; the big -200ER buyers have been American, Singapore, British Airways and United (again), along with ILFC.

* Raw materials — the market for titanium is very tight right now, but there’s enough lead time between now and when the 787 hits full production (2009-10) for the industry to gear up to supply Boeing with titanium it needs, Bair said.

Petrolium is the major raw material used in composites, but oil prices would have to soar 10-fold before it makes a difference in Boeing’s costs, Bair added. By far the biggest driver in the cost of composites is the cost of processing it, he said.

* Engine tests — Boeing is “very pleased with both engine company’s programs to date” and both Rolls Royce and General Electric have show “remarkable progress,” Bair said.

* Structures tests — Boeing’s structural test program for the new composite airframe will be the largest in its history. Boeing already has built an entire wing that it plans to use in structural tests, along with nine fuselage sections. It eventually will destroy an full airplane in test-to-failure tests.

Meanwhile, today Flight International takes a long look http://www.flightglobal.com/Articles/2006/03/27/Navigation/177/205611/Dream+start.html at the 787, with a little bit of everything you wanted to know about Boeing’s new jet, including a discussion with Bair and 787 marketing guru Marty Bentrott about the role the Dash10 would play in Boeing’s product strategy.

Key Quote: “Mike Bair … says the -10 would seat about ‘300, plus or minus 10,’ if it goes forward. … Emirates is ‘extremely interested’ in the -10, Bair jokes: ‘I have bruises to prove it. … Bentrott has no qualms about its potential to impinge on orders for the 777 … it would be part of a natural evolution of a product cycle, he notes. Would the airline want to continue to buy 777-200ERs or move to a more capable -10 with lower economic operating costs? ‘When you think about the 2012-13 timeframe, the 200ERs delivered in 1995 or 1996 are starting to be at the end of the product life cycle,’ he says.”

But the Motley Fool takes a contrarian view of the Dash 10 http://www.fool.com/News/mft/2006/mft06032818.htm suggesting that the bigger plane is too much of a stretch.

Key Quote: “At first blush, it doesn’t seem like such a bad thing that Boeing is trying to accommodate Emirates. The problem, though, is that the stretch plane will compete in the same segment as Boeing’s last new jet, the 777. Boeing’s decision to build the new 787 could be costly indeed.”