Boeing ready to soar

Sunday will see the rollout of the Boeing 787, the world's fastest selling airliner. If Boeing gets this product right -- and there are good signs it has -- it could dominate the world civil aerospace industry for a generation, compounding woes at European rival Airbus.

A ‘Dreamliner’ indeed

Boeing, which has 639 orders for the aircraft since its launch in early 2004, may have created one of the 21st century's first technological marvels. The so-called Dreamliner will be one of the first 'green airliners' designed specifically to reduce emissions and increase fuel efficiency.

• Using advanced technology GE or Rolls-Royce engines, it promises a 20% reduction in emissions with 20% less fuel burn.
• Over 50% of its primary structure will be made from composites, including the wing and a one-piece fuselage, delivering increased strength for less weight.

Global production line

Boeing has broken with tradition by outsourcing much of the aircraft's primary structure to overseas suppliers. The company will act as a systems integrator, spreading the costs and risk of development around a global network of suppliers. For example, the Japanese are responsible for producing the wing and parts of the fuselage while a joint venture company, Global Aeronautica -- established by Vought Aircraft Industries and Alenia Aeronautica -- is responsible for the manufacture of the mid-section and rear section of the fuselage.

Pressure on Airbus

Boeing has some remarkably bullish sales forecasts. It is predicting sales of over 28,000 aircraft between now and 2026, worth over 2.8 trillion dollars. Nearly two-thirds will be of narrow-bodied airliners, but almost a quarter will be in the 787 class, worth over 45% of the market by value. This confirms that Boeing sees the wide-body market as the key commercial battleground for the next 20 years. The company also intends to use 787 technologies as the basis for its new generation narrow-body to replace the 737.

If the 787 remains on schedule and does not encounter serious problems, Boeing will almost certainly launch the 737 replacement. A quick launch of the new 737 will put even more pressure on Airbus, already struggling to get the A380 superjumbo back on track and rollout its A350 model to compete with the 787. The A350 is already two years behind the 787. Boeing's choice of a single composite fuselage could put pressure on Airbus to adjust its approach, causing the European firm more delay and expense.

Dangers of unknown territory

Given the 787's lead over the A350, it is now Boeing's game to lose. But the US firm may face technological and managerial challenges. Boeing's radical use of composites is pushing the state-of-the-art in commercial aircraft use. It is utilising experience gleaned from military contracting, but the one-piece fuselage is unknown territory. At least one key subcontractor is reporting problems. Boeing remains confident that this is a normal work-up issue, but as Airbus has discovered, delays can be very costly.

Managing an international partnership of this scale and scope will also require a culture change for Boeing. More immediately, the rate of production needed to cope with demand is causing problems down the supply chain. Again, the company so far seems to be handling the transformation well. Over the longer term there are concerns that Boeing technology will leak to its partners, thus undermining its future competitiveness. However, the firm does retain its full systems design and integration capability as well as responsibility for marketing and sales.

If development of the 787 goes to plan, Boeing will secure a major share of the twin aisle airliner market. It will also be in pole position to capture a good chunk of the future narrow-bodied market.