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Boeing’s last chance to get back on track

The newest timetable for the Dreamliner is Boeing’s last chance to dig itself out from a deep hole of a series of missteps and regain the trust of its airline customers.
Image: New Boeing Dreamliner 787 being constructed
The Dreamliner’s first flight, which originally was scheduled for September 2007, then pushed to June, is now targeted for sometime in the fourth quarter of this year. Boeing / EPA
/ Source: contributor

Boeing is learning the hard way that it’s much better to surprise than to disappoint.

After months of ego-bruising delays on its 787 Dreamliner jet program, Boeing announced Wednesday a more realistic timetable for production, testing and delivery of its revolutionary, yet-troubled new airplane.

Boeing officials, whose previous 787 delivery predictions have repeatedly been proven wrong, aren’t taking any chances this time around.  They included a built-in cushion to its newly revised production schedule, which pushes back delivery to its first customer, Japan’s All Nippon Airways, to late 2009. It was Boeing’s third delay since October, putting the Dreamliner 15 months behind its original delivery schedule to All Nippon in May 2008.

Boeing now plans to deliver only 25 airplanes in 2009, down from its previous estimate of 109. And its crucial “power on” milestone, when electrical power is turned on for the first time, has been pushed back to June from April, adding at least two months before the first flight. This “safety margin” is expected to ward off any further delays that might crop up during structural testing and flight certification, Boeing Commercial Airplanes President Scott Carson said on a conference with analysts and reporters Wednesday.

The Dreamliner’s first flight, which originally was scheduled for September 2007, then pushed to June, is now targeted for sometime in the fourth quarter of this year.

The new timetable, analysts say, is Boeing’s last chance to dig itself out from a deep hole of a series of missteps in its Dreamliner program and regain the trust of its airline customers.

The stakes have never been higher for Boeing to finally prove to its shareholders, federal regulators, airlines and the flying public that its Dreamliner can fly higher, faster, farther and more cheaply than its aluminum predecessors and competitors.

Since Boeing unveiled its new 787 Dreamliner in a splashy, multimillion-dollar rollout ceremony last July, the company has stumbled and struggled to navigate its way through the uncharted territory of introducing a brand new airplane built in a revolutionary new way with new technology.

As soon as the sun set on last year’s 787 rollout extravaganza – and Broadcaster Tom Brokaw, who emceed the event, flew home – Boeing rolled the airplane back into its cavernous Everett, Wash., hangar, closed the factory doors to the public and started reworking the airplane – an enormous task that is still continuing today.

It’s not completely unexpected that Boeing is having trouble with its first new commercial jet since the 777 was introduced in 1994. With the 787, Boeing is rewriting the way it designs and builds airplanes. The Dreamliner will be primarily made up of lighter carbon-fiber composites instead of traditional, heavier aluminum, making it about 20 percent more fuel-efficient than comparable models.

But analysts say a ripple effect of miscommunication, naïveté and over-confidence, coupled with weaker economies, parts shortages, design changes, “supply chain wrinkles” and software/avionics issues has damaged Boeing’s credibility, leaving many to speculate whether Boeing has pushed the envelope too far.

“They have to work very hard to get it (their credibility) back,’’ said Richard Aboulafia, vice president for analysis at the Teal Group, a Fairfax, Va.-based aerospace research company. “There is a lot riding on this third delay.”

Many of Boeing’s problems stem from its first attempt at giving overseas suppliers and partners far-ranging responsibility for designing and building wing, fuselage and other parts to be shipped to Boeing for final assembly in Washington.

That experiment has yet to prove successful and has given Boeing’s unions reason for concern.

“Boeing outsourced everything it could to lower costs, and it’s hurting this program and the company,” Ray Goforth, executive director of the Society of Professional Engineering Employees in Aerospace, said in a statement Wednesday

Instead of coming in ready to be snapped together, many of the 787 aircraft components were delivered to Boeing unfinished or lacking crucial parts, forcing Boeing to complete production work that was originally intended to be done by its suppliers. A shortage of fasteners to bolt the aircraft together also complicated the process. The most recent delay announced Wednesday was caused in part by structural changes that needed to be made to strengthen the wings’ connection to the fuselage.

“They (Boeing) simply put too much faith in their industrial suppliers and they didn’t provide the oversight they needed,’’ said aerospace analyst Scott Hamilton, managing director of Seattle-based Leeham Co.

To gain more control, Boeing agreed March 28 to buy Vought Aircraft Industries Inc.’s stake in a venture that assembles some of the fuselage sections. The company also added to teams at Japanese suppliers to help improve those partners’ production.

“They are making the right moves,’’ Aboulafia said of the Vought acquisition. “They are putting their money where their mouth is.”

Up until now, Boeing’s customers have been almost giddy over the new Dreamliner, logging 892 orders valued at about $154.3 billion.

But the 787 delays have left Boeing’s airline customers – the lifeblood of the company – livid, with many demanding late fees that could reach into the billions. Boeing officials have been dispatched across the globe to mend relations and negotiate penalty clauses with its customers.

“We are extremely disappointed,’’ said All Nippon Airways spokesman Rob Henderson said in an emailed statement. “This is the third delay in the delivery of the first aircraft, and we still have no details about the full delivery schedule. We would urge Boeing to provide us with a 120 percent definitive schedule as soon as possible.”

Boeing officials refuse to discuss cash penalties or how the delays will affect Boeing’s bottom line, but details might surface when Boeing reports first-quarter earnings on April 23.

In the meantime, analysts agree that the next 787 delay, if there is one, won’t be as forgiving.

Boeing’s Carson acknowledged to reporters the intense pressure, saying the only thing that will get the Dreamliner in the air will “be our actions, not our words.”