Most major design work is done

A year ago next week in a boardroom in Chicago, directors of the Boeing Co. peppered the jet builder’s top executives with questions about their proposed new plane, the 7E7 Dreamliner.

Jennifer Buchanan / The Herald

The entryway of the 7E7 Dreamliner features high celings to welcome passengers into the aircraft.

The questioning went on for four hours, chief executive Harry Stonecipher said later – not so much because board members doubted the plan but because they were excited about the plane and its potential.

Now, Boeing is 12 months closer to its goal of getting the 7E7 in the air, and program chief Mike Bair says the work is going better than he expected.

Work is being completed ahead of schedule, and even the surprises have been pleasant ones, Bair said, adding that customer interest has been unprecedented.

“It just gets better and better and better,” he said.

But even enthusiasts still have questions about Boeing’s first 21st-century jet. Contracts with key partners have been slow in coming. Customers have put down deposits but haven’t signed contracts. And Airbus plans to counter the 7E7 with a jet of its own.

Still, aerospace analyst Richard Aboulafia said, the plane is gaining momentum.

“When you hear the partners talk, they sound very impressed,” said Aboulafia, with the Teal Group in Virginia.

“The 7E7 is the plane called hope,” he said. “It promises great things.”

Ahead of schedule

The program has already achieved great things, Bair maintains.

Ninety percent of the major design work is done – essentially everything but the tail, he said. Work on the systems is going well. Some suppliers, such as Hamilton Sunstrand, already have working prototypes.

With the 7E7, Boeing has farmed out more major work to suppliers than ever before, and that’s forcing Boeing to “be a lot more structured,” Bair said. “We’re further along, in better shape, than we’ve ever been in the past.”

He estimated that work is running about two months ahead of schedule. “That’s bodes well for keeping within our budgets,” he said.

Bair said the biggest achievement was deciding how the plane’s fuselage would be built.

Now, Boeing takes pieces of steel and titanium to build a metal skeleton, over which curved sheets of aluminum are fastened. The process creates barrel-shaped sections that are riveted together to create the body of the jet.

But the 7E7 will be built from composites. Boeing will wrap layers of resin-soaked fibers over a mold and bake it, creating whole sections in one piece. Boeing is testing prototypes of the system in Seattle.

“We’re weaving this airplane,” Bair said. “We assemble planes today from parts. This is more like a textile mill.”

Boeing has touted the composite plane as lightweight and fuel-efficient. Based on the company’s research into the materials, it also appears that the composite plane will need far less maintenance than aluminum jets, Bair said.

Those savings will be “more dramatic than the fuel-burn improvement,” he said.

Metal corrodes, which means patching or replacing weakened structures. One of the biggest problem areas is floor beams; passengers spill drinks in the cabin, and the moisture causes corrosion.

Boeing first used composite floor beams on the 777. Bair’s team pulled the maintenance records for 777 floor beams and found that not one has needed replacing.

Aluminum planes go in for “C-checks” – routine inspection and maintenance – every 24 months. Bair said it now appears that the mostly composite 7E7 will need checks every 30 months, and “we think it might get to 36.”

Not having to replace corroded parts will save airlines money. But, more important, it means they’ll spend less time in the repair hangar, which means more time in the air earning money.

“It cascades,” Bair said. “It’s not just maintenance savings. It all just compounds upon itself.”

Extending the maintenance cycle by six months would give airlines an extra 169 flights between C-checks, said Franco Pecci, chief executive of the airline Blue Panorama. The Italian leisure carrier has announced plans to become a 7E7 launch customer and is close to signing the deal.

That’s a key selling point, Pecci said at a Seattle news conference in November. “An aircraft has to fly, not stay on the ground.”

But that selling point seems lost on many potential customers, some observers say.

Sales are lagging

All Nippon Airways became the Dreamliner’s launch customer with a 50-jet order in April. In the days that followed, Boeing executives confidently predicted they would have 200 firm orders on the books by the end of the year and 500 orders by the time of the first flight in 2007.

They based that on an enthusiastic response that “wildly exceeded our expectations,” said John Feren, Boeing vice president in charge of 7E7 sales. Airlines have put down cash deposits on more than 200 7E7s, he said.

But those deposits have not translated into orders. All Nippon has signed its 50-plane deal, but the only other signed contract is with Air New Zealand, which is buying two 7E7s.

Four other airlines, including Blue Panorama, have announced their intentions to order a total of 39 7E7s. But the biggest potential order in that group came from startup Primaris Airline, which at the time of its announcement was still trying to raise cash to expand its one-jet fleet.

Orders from airlines such as Primaris only emphasize the lack of orders from big blue-chip carriers, Aboulafia said.

There are several reasons why airlines aren’t buying, according to Aboulafia and others.

For one thing, it has taken Boeing a long time to wrap up contract talks with some of its key 7E7 partners. Not having those supplier contracts signed cast doubt on Boeing’s ability to deliver a finished plane, Aboulafia said.

Bair said the last contract with fuselage suppliers Vought and Alenia should be signed by Christmas, eight months behind the schedule he laid out a year ago.

But all the partners have been working on the project even without firm contracts, he said. Some 1,000 of their engineers are in Everett and Seattle working alongside their Boeing counterparts.

Airbus plans to overhaul its similarly sized A330 jet to make it more competitive with the 7E7. The proposed Airbus jet, the A350, would use the same engines General Electric and Rolls-Royce are developing for the Dreamliner, and would be available around 2010 – two years after the 7E7.

Airbus is positioning the A350 as a lower-cost, almost-as-effective alternative to the 7E7. With many of the world’s airlines running on the slimmest of profit margins, it’s a good move, said T.M. Sell, a Highline Community College professor, author and longtime Boeing watcher.

He compared the cash-strapped airlines to families out shopping for cars: “If my budget is a Kia budget, I’m not buying a Volvo, even though it’s the better value.”

Airbus challenge

Feren and Bair downplayed the significance of the A350.

“We haven’t had anyone call us up and say, ‘We don’t want to talk to you for two months while we find out about the A350,’” Feren said.

Airbus hasn’t supplied airlines with many details, said Bert van Leeuwen, a senior vice president with Deutsche Verkehrs Bank, which finances airline deals.

But even if Airbus is able to do a quick-and-dirty upgrade to create the A350, van Leeuwen said he’s not sure it would be a viable option for airlines.

“You get what you pay for,” he said at a Boeing news conference in November. “It’s unlikely you can achieve something similar to the 7E7.”

That’s the argument Boeing is making.

Bair said Boeing’s “underlying assumption has always been we’d have a competitor, and a good competitor.”

But simply hanging 7E7 engines on the A330 won’t work, he said. The A330 already is heavier than the 7E7, and the 7E7 engines will be bigger, meaning more drag. That would make the A350 a less efficient airplane even if Airbus uses lighter composites, Bair said.

“You can’t really match this thing with a derivative – you can’t even get close,” Bair said. “It’s the same conundrum we had when we were trying to do something to the 767.”

What Airbus really needs is to start from scratch with a new plane, he continued, but the company is too busy finishing the A380 superjumbo.

The only way to make the A350 attractive compared to the 7E7 would be to slash prices, he said. “You’ve got to pull some really big bills out of your wallet.”

Bair downplayed the slow pace of orders so far. Boeing’s last jet, the 777, also got off to a slow start, but within 10 years it became the company’s best-selling wide-body jet, he said.

In fact, eight months after the 7E7 launch order, Boeing has a few more orders (52) than it had during the first year of the 777 program (49).

Several airlines have openly said they will be talking with Boeing about the jet, including Emirates, which might be interested in up to 60 Dreamliners.

Bair wouldn’t confirm whether Boeing is talking with customers about similarly large orders, but he did grin when asked about it. “There could be other very large conversations going on, yes.”

For now, Boeing is letting customers take their time, he said.

“This is a 30- or 40-year program. A month here or there on the front end – we’re not going to do something idiotic to make it look good,” he said. “We know we’ve got a dynamite product.”

Reporter Bryan Corliss: 425-339-3454 or

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