Boeing: The Emperor's New 787 Dreamliner

Boeing’s (BA) 787 Dreamliner was originally scheduled to fly in September 2007. Just a few days before the maiden flight, management announced what would be the beginning of a 2+ year delay. That’s long even by airline standards. In its five or six announcements—it’s hard to keep count—management blamed everything from a shortage of fasteners to incomplete software to a labor strike.

The latest delay was announced on June 23, 2009. Management said, "first flight of the 787 Dreamliner will be postponed due to a need to reinforce an area within the side-of-body section of the aircraft.” I’m not an aerospace engineer, so I won’t say how I really feel about that. Regarding first flight and aircraft deliveries, they said, “It will be several weeks before the new schedule is available.”

Several weeks later on July 22, 2009, Boeing announced their Q2 financial results. Regarding the 787, they said “The company expects to complete its assessment of the schedule and financial implications during the third quarter.” Not only have they delayed first flight, they have also delayed the new schedule for first flight. They also added that they recently completed “low-speed taxi tests on the first flight test aircraft.” I guess you learn to walk before you run…or fly. Again, I’m not an aerospace engineer.

At this point, I have lost confidence in management and I am only 99% sure that the Dreamliner will eventually get off the ground. While I think it would be risky to bet against BA stock at current levels, I would not recommend you buy it either. If that 1% disaster comes true, shares will take a Black Swan-style swan dive

Comments

[Trane250]

This is a sad testament to American engineering in the 21st century.

2009 Jul 26 12:18 PM

[Infobuddy]

While I too am upset at the delays - I would always prefer a safe airplane and that's the very reason for the extended testing on a new air plane. The taxi tests are just the beginning. Boeing will determine the cause and the fix at the wing join joint and will have an even better air plane for it. Better now than a few years from now!

2009 Jul 26 01:50 PM

[The Bro]

No wine before its time!

2009 Jul 26 02:19 PM

[Biotechs_Maven]

I DO NOT AGREE with this author opinion.

Because:
a. Boeing had been making airplanes for decades and they had the experience and data on how to make Airplanes that fly safely ! Boeing is the undisputed leader in commercial airplanes design, and even Airbus could not match them
b. The 787 is revolutioner in the material factor (carbon fiber) but not on the aerodynamic design or propulsion (engine design), so eventually this 787 is still a conventional aircraft. Plus Carbon Fiber had been a proven material on fighter jets, which exposed to more extreme G Force and stress than 787 will ever will.
The different on the stress is the 787 experience prolonged but consistent stress on its carbon fiber material,
While the fighter jet experience random but high spike of stress on its carbon fiber material
As we know the sudden spike of stress is the more dangerous one, cause it is the sudden spike
That cause the material to break, and so far there had not been a failure of structure on the fighter jet
With carbon fiber material.
c. Reinforcing a carbon fiber panel is not easy, and most probably that whole side panel need to be design and manufactured again from the start.But that is as easy as changing the fender panel on Audi A6 to Audi RS6 wider panel. It took time but it is not that hard to make.
d. One more time, I would just take a look at the picture of the 787 and compare it to other commercial aeroplane.
It sure look conservative to me ! a Concorde will surely have more complication than the 787 since Concorde
Fly higher and faster than 787. So there is no way the 787 project will fail. Yes it could still crash/have accident during the test flight,That is why it is a test flight. But no way that 787 project will fail, and it will fly.

2009 Jul 26 09:10 PM

[Cyarg]

Well Sam, you said it, you're not an engineer. I hope you are better at finance as you are off the mark this time. This is new technology and it is better to discover a problem on the ground and fix it before flight than to find it in the air. An airliner full of people that crashes would be far worse for Boeing's bottom line, not to mention the people.


On Jul 26 12:18 PM Trane250 wrote:

> This is a sad testament to American engineering in the 21st century.

2009 Jul 27 08:41 AM

[FleetBuzz Editorial.com]

"Boeing’s (BA) 787 Dreamliner was originally scheduled to fly in September 2007."

No it wasnt.

There was never an accurate first flight date - just media speculation trying to make something believable.

The fact that the rest of the aforementioned piece here is wrong about the timetable Boeing laid out after the June 23 delay shows that the author clearly missed what was said.

Boeing said it would be several weeks before a new schedule was announced. The earnings on July 23 is barely one calendar month, let alone "several" weeks.

Alas, thank Boeing you're not an engineer because your 787 coverage here is awfully shallow and with blinkered vision.

The previous comments to this article demonstrate this weakness aptly.

2009 Jul 27 10:52 AM

[User 461768]

Your guidance is extremely short-sighted:
Boeing has a huge backlog of 787 orders, approx 800 planes and is considering opening a 2nd production line to meet demand (and partially offset development delays) The 787 will fly, Boeing will resolve the technical issues and 2-3 years from now this issue will long be forgotten as the 787 becomes the de-factor standard for twin aisle jets. Boeing has upside to $60 / share in the next 12-18 months, I'd say that is worth the 1% risk. Not sure what makes you qualified to post your commentary, but it appears to be extremely sophomoric and one-dimensional in it's analysis. I hope this isn't your day job.

2009 Jul 27 04:29 PM

[BeachRider]

Since SA is about BA stock, the comments that reflect loss of confidence in BA management are OK. Lots of people agree that the tentativeness, shown by BA management after letting June expectations creep so high, is concerning. The attempt to factualize the concern with dates and judgements is fact-challenged. There are few facts available on the detail of the 'wings attach to fuselage' issue that is reported in the press.

It is OK to bake BA management for the high expectations in June. Everyone thinks that they will eventually get it fixed. Key 787 customers still express confidence for first-customer-delivery by sometime in 2011.

2009 Jul 31 12:39 PM