How Boeing transformed the aviation industry

“This is a far cry from how Boeing used to make airplanes,’’ says Hamilton.

The first few weeks of final assembly have not been smooth. Some of the jet’s major structures were delivered incomplete and fuselage sections didn’t fit together properly. In addition, temporary fasteners were being used to hold fuselage sections together because of an industry-wide shortage of permanent fasteners.

Boeing officials have acknowledged the problems and characterize them as “hiccups” in the production process that are being resolved as soon as they crop up.

Company officials, however, are keeping a watchful eye on their international partners to ensure the aircraft sections are delivered on time. Any more missteps or delays could end up in a disastrous domino effect, forcing Boeing to postpone the 787’s first flight. Just last month, Vought Aircraft, one of Boeing’s major partners on the 787, fired a top executive because of production snafus and delays on fuselage sections.

Mike Bair, head of the 787 program, told reporters recently that the production snafus have been resolved and are typical for all-new airplane programs. He denied a JP Morgan analyst's report that the 787 production schedule may slip four months, saying the program is still on schedule. “We are where we need to be,’’ he told reporters.

Boeing’s bold new manufacturing strategy is a sore point for the company’s largest union, whose contract with Boeing expires in the summer of 2008, just a few months after the 787's first delivery.

Ed Turner / AFP - Getty Images While the Dreamliner — the world’s first commercial jet made primarily of plastic — is ready for its public debut on the ground, the airplane still must prove itself in the air. First flight is scheduled for September, followed by a series of certification test flights this fall and commercial service in May 2008.

Union members, who haven’t forgiven Boeing for moving its headquarters to Chicago and who lobbied hard to keep 787 final assembly in Washington state, view the Dreamliner as a mixed blessing. “There’s excitement and yet there’s anger,” says Tom Wroblewski, District president of the International Association of Machinists and Aerospace Workers.

The twin-engine jet, which was launched in April 2004, represents a revolutionary comeback for Boeing, which many industry insiders had written off just a few years ago when the company decided to forgo building a super jumbo jet to compete with its European rival, Airbus' double-decker A380.

Instead of giant, metal cruise ships in the sky, Boeing gambled on a smaller, fuel-efficient plastic jet that could fly longer, non-stop routes. That bet has so far paid off.  The Dreamliner is sold out until 2013 with 643 orders worth an estimated $100 billion from 45 airline customers.

Boeing’s airline customers have been attracted to the 787 on promises of a 20 percent increase in fuel efficiency, 30 percent less maintenance costs and an unprecedented range for a mid-size airplane of 8,000 miles — the diameter of the Earth at the equator — allowing airlines to fly fast-growing, non-stop routes between the United States, Asia and Europe.

“Nobody is questioning the company now,’’ says aviation analyst Hamilton.

Boeing is counting on the Dreamliner to cement its world dominance in its longstanding battle with Airbus over what Boeing predicts is a $2.8 trillion market for commercial airplanes over the next 20 years.

Airbus, which had an impressive showing at last month’s Paris Air Show, is fighting back with a newly designed A350 jet, which also will rely heavily on composites.

While Boeing’s 787 is on track for rollout and first flight, the company must still prove to the world, and scrutinizing Federal Aviation Administration officials, how well the airplane flies.

Success on the 787 program “remains to be seen,’’ says Hamilton. Just as Airbus' reputation has been tarnished by production problems that caused a two-year delay in its A380 super jumbo program, Boeing’s reputation is at risk if its 787 doesn’t perform as promised.

“Only time will tell,’’ says Ray Jaworowski, senior aerospace analyst with Newton, Conn.-based Forecast International.

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