The comments made by Air New Zealand’s chief financial officer, Rob McDonald, in Sydney this week concerning ‘painful’ delays to its launch order for the Boeing 787-9 are regarded as the smoke rising from an issue that is about to ignite in the view of some observers in the US.
The ‘flash point’ may be next Wednesday’s second quarterly Boeing investor briefing (Thursday here) in which analysts have predicted sharp cutbacks in the first quarterly guidances concerning the 787 and 748 new airliner projects given by a company that struggles as much with the truth as it does with meeting performance specifications and delivery promises.
In his comments McDonald said the -9 version of the Dreamliner, for which Air NZ is the first customer, would now be delivered sometime in 2014, rather than late 2013, after earlier promises of deliveries about now.
Wrong. The amount of work that has to be done to get the 787-8 certified, useful, and delivered is such that the -9 derivative will not be in Air NZ’s hands on more informed estimates until sometime in 2015, or even 2016.
Like Qantas with its original 2005 deal for 787-8s and -9s, Air NZ drove a great bargain for the dream, but failed to get any independent assessment as to whether the proposed use of carbon fibre reinforced plastics which would be woven, glued and baked into fuselage barrels and wings was likely to deliver a super light weight, corrosion resistant and easily maintained airliner as promised by Boeing’s game changing sales evangelistas in the middle of the last decade.
I’m firmly of the view that this has turned into a disaster for Boeing and its customers, in that the technology and the production techniques for the Dreamliners have failed to work anywhere near to what was claimed for them, and that fulfilling the promises is either going to take many more years, or end in comprehensive failure.
The signs from Airbus for its A350 XWB family, which also relies extensively on thin load bearing composites, aren’t promising either.
It is impossible to work out what the benefits for these first generation high composite airliners will really be if the claims made by the marketing campaigns prove false.
None of the critically important guidance made by Boeing about the 787 Dreamliner since mid 2007 has proven correct. No manufacturer has ever been so consistently wrong about one of its products for so long, or, thumbing through the press release and guidance filings archives, so persistently wrong in terms of detailed projections.
It is now three years since the initial 787-8s were to enter service with All Nippon Airways. It is two years since the Boeing 747-8F was supposed to go into service, with deliveries by the end of 2010 of the passenger version to Lufthansa.
This makes it very difficult to believe anything Boeing might say next Thursday Australian time, but a comprehensive admission of deliberately misleading its customers for a period of years would be a good start, followed by the resignation of the senior management team and the restructuring of the board.
20 Comments
Many times we hear about and see a particular public sector project which has gone wrong and should have been done by private industry … who would have done the project SO much better.
While the 787 project MAY be an isolated case, it clearly demonstrates that private is not always necessarily cheaper, quicker nor better than public.
Like politicians, the Boeing board and management will never admit to deliberately misleading their customers. There’ll be huffing and puffing and promises, and there may even be some honesty. But, if there is any honesty, who is going to believe them now?
The Qantas board made a decision, in good faith I’d like to believe, about the 787 based on the information provided to them at the time. Now, we know that that information was seriously flawed, and it is possible – a long bow, perhaps – that International would be making a positive return had the fleet renewal happened on schedule.
It would be good to hear Joyce acknowledge that International’s failings are not necessarily all the fault of the pilots and the engineers and their unions.
Oh, hang on. That would mean the Qantas board and management making some admissions and being honest. Silly me.
The Qantas board believed lies and fancy and ignored the advice of the old heads within the company. Those with the business degrees and the “smarts” rather than long term experience bought the snake oil.
Qantas had always been cautious in their approach to new aircraft and waited for other operators to iron out the kinks first.
These decisions are a direct result of board and executive that place no value in lifelong career experience within the company – look at JB being overlooked for the top job instead appointing a travelling salesman.
The current board and executive are proving now that there is no change with their belief that a 200 hour pilot is as good or better than an experienced one, or that an offshore engineering facilitiy is going to exhibit the same level of commitment to company excellence for a company they have no attachment to compared to lifelong engaged employees.
interesting
I agree, those with an abacus in their briefcase, have and never will understand the aviation business !
A fleet of Boeing 777 would be a much better option to the 787, 777 can be utilised in both point to point flights and point to hub flights, if configured correctly.
“It is impossible to work out what the benefits for these first generation high composite airliners will really be if the claims made by the marketing campaigns prove false.”
The following is based on what I remember being told during my lectures on composites (I’m studying aerospace engineering and my faculty has a research group dedicated to composites).
The massive improvements claimed by the composites marketing hype were based on the properties of the fibres used in the composites compared to aluminium. Putting those fibres in a composite that will actually work in a structure evaporates a lot of those benefits.
With current production technology (which drives the safety factors required for composites) the absolute best case weight reduction is probably about 30%. However this requires using composites that will behave very differently to the traditional metal alloys, making a lot of the experience of the top structural engineers who are used to working in metal worthless. To overcome this the industry currently often makes use of composites that are designed to behave in the same way as metals (‘quasi-isotropic composites’ ) which reduces a lot of the benefits. Even worse these composites are then used (only changing the thickness) to replace aluminium in a structural shape designed for a metal structure (my lecturers called this a ‘black-metal design’). If you take all that into account you end up with a weight saving of between 0 and 10%.
Regarding the 787 specifically I’ve heard it claimed that it will probably be no lighter than if it had been made out of aluminium, though I’ve no idea how well informed those claims are, and of course ultimately the only way to be sure would be to design the entire plane in aluminium and then compare the two designs.
Apart from Boeing’s marketing department I think some share of the blame must also fall on the airlines which apparently demanded a composite aircraft rather than a metal aircraft. Something I find rather puzzling, surely all that matters from a business standpoint are the performance characteristics? The material from which the plane is made should only be considered when determining whether it’s compatible with your maintenance capabilities. Which is also an important point to consider by the way, having to maintain composites aircraft will require an investment in new equipment and staff training (or offshoring to someone else who has made that investment of course).
I hope you are wrong about yet more delays for the 787 but fear you are probably right. Boeing’s performance on this program has been a disaster and will give Harvard Business School a topic for MBA studies for years to come. Maybe the ongoing sagas on the program further convinced Boeing that they don’t have the capability to tackle a new program hence the late and embarassing decision to re-engine the 737.
If there is a delay QF (and NZ) should immediately put the pressure on Boeing and say that the 787 is no longer required and they will happily accept some 777s as part compensation.
QF is also now in the invidious position of probably having to keep their decrepit 767-300s even longer. NZ has undertaken renovations to these planes whereas QF’s fleet is old and looks it. The only realistic option for QF on this front is to attempt some refurbishment program immediately using Boeing compensation funds. More A330-200s is a better option but Airbus’ order books are full for years to come.
It demonstrates the ineptness and technical incompetence of airline managements that they could be so gullible to accept Boeing’s ludicrous 787 claims at face value without question.
It’s like everyone knew the 787 would be a failure except the airline managements. There is no technical expertise or even basic technical comprehension among those in charge of airlines these days, and falling for dud aircraft promises is one of the results.
ag044 another example was the Chunnell construction. The UK did it privately, France did it as government. Each had to meet the other in the middle. France got their ahead of schedule and under budget and had to twiddle its thumbs for years waiting for the English to arrive while they had two public companies go belly up. There were 8 English safety related deaths and 2 French ones.
Back on topic, this article talks about the opportunity costs of the 787 for Boeing.
http://www.kansas.com/2011/07/23/1944201/analysts-say-americans-order-was.html
As reeves35 says Air NZ did not rely on Boeing’s word nearly as much as Qantas has. The wingtips which Air NZ had retrofitted to their 767s were marginal financially at the time but will pay off handsomely if they need to keep the planes longer than antcipated.
Air NZ also has 777-200s and brand new 777-300s in their fleet so they will remain competitive. Basic risk management really, something which Qantas has spectacularly failed at.
re: “the resignation of the senior management team and the restructuring of the board.”
Sorry to be greedy, but that is not adequate. These people should be properly investigated by the U.S. Securities Exchange Commission and, if appropriate, prosecuted if crimes were committed in the never-ending series of Boeing pronouncements and mis-guidance to the airline, investment and banking communities.
Further, if this be the case, then the Boeing Company should be held to recompense those who have been defrauded by the mismanagement and mis-guidance consistently given by the management of the Boeing Company.
The Board should then be prosecuted for dereliction of fiduciary duty and face any criminal and financial penalties as prescribed by U.S. law.
Scrap the Plastic Pig & start all over again.
Aloooooominum fuselage, please!
To my mind many inept ego-blown Boeing management boffins have been gradually sewing the seeds for their own destruction ever since they took over McDonnell Douglas in 1997. Squandering millions on a huge facility refurbishment to pacify the locals at Long Beach that the BBJ BizJet would go into production to replace the MD-11 when it was always going to stay in Seattle, was just the start of the slippery slope for Boeing. After being in Long Beach at the time the last MD-11 was going down the production line during certification of the first Australian B717, I’m sure there would be many ex McDonnell Douglas employees rejoicing at the current B787 debacle at Boeing.
I subscribe to Boeing’s updates, this was received during the 787 build problems….
Forward-Looking Statements
Certain statements in this report may be “forward-looking” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “targets,” “anticipates,” and similar expressions are used to identify these forward-looking statements. Forward-looking statements are based upon assumptions about future events that may not prove to be accurate. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Actual outcomes and results may differ materially from what is expressed or forecasted in these forward-looking statements. As a result, these statements speak to events only as of the date they are made and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by federal securities laws. Specific factors that could cause actual results to differ materially from forward-looking statements include, but are not limited to, statements we make regarding our guidance relating to future financial and operating performance, the effect of economic conditions in the United States and globally, and general industry conditions as they may impact us or our customers, as well as the other important factors disclosed previously and from time to time in our other filings with the Securities and Exchange Commission.
It might have been even worse for Boeing. They might have won the JSF contract!
What are the options for Qantas if the 787 turns out to be a dog? More A380′s? Staggering along with geriatric 767′s & 747′s? Jetstar? None of these seems to augur well for its mid-range services – those that still exist! As a previously loyal QC Member, my first preference for o/s flights is now SIA. At least their aircraft are (mainly) modern & you can get a decent day-time departure from Melbourne.
The option is either 777s or A330s.
Nothing else available until either the 7-late-7 or A350 are delivered capable of what has been promised.
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Ansett were launch customers for the Fokker 50 and A320. Both were utter pigs early on and took years to debug. Being a launch customer is risky, something Qantas should have learned considering many of the execs are ex Ansett. I know Qantas swallowed the Airbus blurb hook line and sinker. They were going to service the whole order of 380s (20 originally ) with just a few dozen service people. They would fly on the smell of an oily rag. Pigs will fly, eventually. It is plainly obvious technical and operational people are not being listened to or being ignored.
Boeing can’t even be honest with itself. Ask the average engineer/line manager at Everett when the first delivery to ANA will be, and you’ll get a shrug and maybe “I dunno. Late August, September, sometime this year.” Then ask about the second delivery and watch their face. Seriously. You’ll see a blank look, then maybe a wry little twist in their mouth. You have to see the field there with dozens of 787s essentially cocooned, all waiting to have their fuel cell fasteners replaced, air conditioning units replaced, and the 1600+ other maintenance actions each and every one needs. Oh, and did I mention that, thanks to the increasingly Bizarro-world GOP, the FAA has had to furlough thousands of engineers and safety analysts? How will THAT affect the certification process? (Let me tell you from personal experience – the FAA got burned by Boeing on the 777 and its out-of-the-gate ETOPS cert, there was an FAA pilot on board the plane last November that had a worse-than-reported fire, and they’re in no mood for Boeing pushback.)
And do you think anyone has actually learned anything from this fiasco? Has anyone stopped outsourcing engineering development work? Hell, no, because everyone sees China and India as the only “big” markets for the forseeable future, and those countries aren’t letting anyone in who doesn’t set up shop there and start the economic and technology transfer.
Hey, Derrida Derider – love the screen name! Is there a story behind that?
But Derrida was the champion of deconstruction, so as a derider does that mean you do not agree with it? Yet, here we all are deconstructing Boeing’s pronouncements and other weighty issues….