August 2010 » AirInsight
A Commercial Aviation Consultancy

Monthly Archives: August 2010

With announcements of another 787 and another 747-8 delay this week, the credibility of Boeing being able to deliver on its promises has taken another hit -- and leaves folks wondering if these aircraft will enter service in the first quarter of 2011. The additional costs from delays and corrective measure threaten profitability and the timing of 737 and 777 replacement/enhancement programs, eroding Boeing’s future competitive position. Continue reading

The news that the head of the troubled Boeing 747-8 program, Mohammad “Mo” Yahyavi, was removed August 27 is long overdue and only endemic of the slow pace at Boeing to address and correct program difficulties.

Inexplicably, Boeing CEO Jim McNerney—who inherited a growing mess from former CEO Harry Stonecipher (and his interim successor and caretaker, the late Lew Platt)—has been excruciatingly slow to make changes in the 787 and 747 programs.

While the 787 has garnered all the attention and headlines for what is fast approaching three years in delays after seven program reschedulings, the less-visible 747-8 is also a poster child for Things Wrong at Boeing.

Even before the 787 roll out on 7/8/07, information was circulating that resources were being diverted to or retained by the 787 program from the 747-8 and other programs. As the 787 problems got worse, so did the insidious affect on other programs. Boeing’s plan had been that once the 787 entered service in May 2008, a replacement airplane for the 737 was going to be pursued, followed by one for the 777. But the issues with the 787 and 747-8 upset these plans.

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Boeing very late August 26 announced yet another delay of its newest airplane, the 787.  Some are trying hard to say this is no surprise – but there is no way any further delays are welcomed by Boeing or its customers.  The 787 program has become a source of management embarrassment and a program that has billions of dollars in cost overruns and customer penalties, aggregating $20 billion by some estimates.

What are the key questions pertaining to this latest delay announcement?

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Airbus is reportedly working furiously on plans to re-engine its single aisle family planes.  As we looked at the A320 family, we pondered how this strategy might unfold – after all its risky and cash is tight.  Very tight.

Moreover, nothing in the industry happens in a vacuum.  Any move by Airbus will elicit a response from you-know-who.  So what is the best move for Airbus?  The move they need to make has to be smart for them obviously, but also is best if made in such a way that it is hard for Boeing.  That is a real win.

In considering this we came up with an idea that perhaps the best move for Airbus is to re-engine with a P&W geared fan engine on the A321.  This means the latest engine ready soonest.  It also means making the move where… Continue reading