Boeing's Problem Plane: Why the Dreamliner Hampers Innovation

Less fuel consumption, greater range, more comfort. Airlines have anxiously waited for the Dreamliner, and now it is here. But the 787 has become a money pit and a PR catastrophe for Boeing. The fiasco could hamper future innovations, including those by competitor Airbus.

For airline passengers, the Dreamliner should be a dream come true. It makes longer flights considerably more comfortable because air pressure and humidity in the cabin of a Boeing 787 are higher than in previous models, making flying less strenuous. In addition, the windows are bigger, the noise level is lower, and on account of lower fuel consumption, it’s doing something for the environment as well.

The demand for the new super plane is high. Boeing has already sold 821 Dreamliners, including 15 to German airline Air Berlin. On Friday evening the first model will be delivered to the Japanese airline ALL Nippon Airways (ANA).

Yet there is no reason for euphoria for the U.S. company because the 787 is anything but a success story. Development lasted three years longer than planned and costs have reached over $15 billion, almost three times higher than projected. Furthermore, Boeing has long since abandoned the hope of outpacing its European competitor, Airbus, with the Dreamliner.

Instead, the 787 could even become an impediment to progress. The fiasco that the plane turned out to be for Boeing has the industry shying away from new projects. Both large manufacturers are backing off of new visions. Instead of designing new high-tech machines, Boeing and Airbus are playing it safe and only adopting small adjustments to existing models. As a result the U.S. firm dismissed a plan to build a new short-range jet a few weeks ago. Now Boeing only wants to design new engines for the 737; hardly anything on the rest of the plane should change.

Instead of the flight of fancy of the past years, Boeing is spreading a new conservatism: less risk, more focus on established models.

Too much revolution all at once

At the end of the 1990s when the Dreamliner project originated, it sounded quite different. At the time, U.S. firms, driven by investors, wanted everything all at once. Two revolutionary steps were undertaken simultaneously:

– The 787 is a technological revolution. For the first time the fuselage consists entirely of carbon fiber material. As a result the plane is considerably lighter, consumes less fuel and has a greater range.

-Boeing outsourced production of many parts to subcontractors. These large, finished parts of the Dreamliner are then simply bolted together by Boeing employees in Seattle.

Each of these steps alone would have already been an enormous challenge, but together, they overextended the company and led to chaos. Suppliers were overwhelmed by the modern synthetic materials and delivered parts too late or incorrectly made. In addition, outsourcing didn’t work out at all. Instead of already assembled parts of the fuselage, loose clamps, components, and cables arrived.

The firm pulled the emergency brake, brought much of the work back and monitored the subcontractors more closely. However, the managers could not make up for lost time. The targeted delivery date of summer 2008 was completely missed and the planned expenditure of $5.8 billion was tripled. It could now take up to 10 years for Boeing to offset its costs.

Strategic catastrophe

According to aviation expert, Heinrich Groβbongardt, the reasons for the debacle lie in the hubris of the 1990s: “At that time, the financial markets set the tone. Investment was made only when one could show extremely ambitious economic goals.”* In plain language: To achieve the immense rates of return, production costs needed to be economized. The entire chain of delivery was reorganized. Instead of relying on well-established practices, Boeing outsourced large parts of the production to new partners.

“The engineers didn’t say how it ought to be; the controllers did,” said Groβbongardt, who, at the time, was press spokesman for Boeing. “Project Dreamliner should have proceeded only if the estimated costs were less than $6 billion.”* For the company, the delay was a strategic catastrophe. If the 787 had come on the market on time three years ago, Boeing would have secured itself an “enormous innovation advantage”* over Airbus, according to Groβbongardt.

Instead, the Americans haven’t made any more progress than the Europeans. Airbus could not fulfill the expectations of its high-tech planes either. The Dreamliner’s counterpart, the A350, as well as the A380, also came with recurring delays and additional costs. The urge to tackle new adventures will not be all that great in the coming years.

*Editor’s Note: This quote, accurately translated, could not be verified.