Commercial Airplanes enters 2004 with the authority to offer the 7E7

BY JOSH ZIMMERMAN AND LORI GUNTER

When Boeing President and Chief Executive Officer Harry Stonecipher declared that the company's board of directors had granted Boeing Commercial Airplanes the authority to offer the Boeing 7E7 Dreamliner passenger airplane for sale—and that the jetliner would be built in Everett, Wash.—a sea of people rose and roared in approval. They cheered and clapped, and some even cried.

"Savor this moment," said Alan Mulally, president and chief executive officer of Boeing Commercial Airplanes. "This is a great way to start the second century of powered flight."

Authority to offer is one of a series of milestones that leads to the certification and delivery of the first of a new kind of airplane. It allows Boeing to elevate discussions with airlines from general levels to sales negotiations. Boeing has been in discussion with more than 50 potential customers and has seen significant interest from a variety of airlines. The proposed 7E7 family, which consists of three airplanes, could very well fit the needs of several airlines expected to place orders in the coming year. As always, customers will base their decisions on their needs. This means the timing for the next major program milestone—program launch—is not definite.

"We'll launch when the time is right," said Mike Bair, senior vice president of the 7E7 program. "It will depend on our discussions with airlines, but it looks like it will happen this year, hopefully sooner rather than later."

Bair said there is no specific set of launch criteria. But in general, the program must be convinced of the long-term success of the program and be able to convince the Boeing board of directors that committing to build the 7E7 is the right move for the company.

"There is an almost endless combination of orders, agreements and understandings that could be combined to convince first us that we are ready to launch the program," said Bair. "I think we will see the right combination come together in the months ahead. The support of the board has been tremendous, and we will be keeping them informed of our progress as we go."

Perhaps as important to the assembled audience as BCA getting the authority to offer the 7E7 for sale was the announcement that the airplane's final assembly will take place in Everett.

In May 2003, the 7E7 program began a rigorous effort to find the best final-assembly site for the new airplane family. A multitude of sites from across the United States submitted proposals in June, and a thorough evaluation followed.

"We are excited to continue our partnership with the state of Washington and the city of Everett on the 7E7," said Bair. "Many states submitted extremely competitive proposals, and many factors weighed into the decision. But it's clear that the best overall solution for Boeing and the 7E7 is to place final assembly in Everett."

The structures partners named earlier in 2003 will build large parts of the 7E7 at sites in Australia, Canada, Italy, Japan and the United States.

Boeing will supply about 35 percent of the 7E7 structure, including the vertical fin, fixed and movable leading edges of the wing, the flight deck and part of the forward fuselage section, the moveable trailing edges, and wing-to-body fairing. Boeing sites participating in the structures team, which is led by the 7E7 program team in Everett, include Frederickson, Wash.; Tulsa, Okla.; Wichita, Kan.; Winnipeg, Manitoba; and Hawker de Havilland facilities in Australia.

Japanese companies will provide approximately 35 percent of the 7E7 structure. Mitsubishi Heavy Industries is responsible for the main wing box; Kawasaki Heavy Industries will provide the fuselage section between the wing and cabin, the main landing gear wheel well, and the main wing fixed trailing edge; and Fuji Heavy Industries is focused in the center wing box and integration of the wing box with the main landing gear wheel well. Vought Aircraft Industries of Dallas and Italy's Alenia Aeronautica will team to build the horizontal stabilizer and the aft fuselage, accounting for approximately 26 percent of the airframe.

Large structures from these sites around the world will be transported aboard modified 747 Freighters to Everett for final assembly.

"Transporting large pieces by air will allow us to dramatically reduce flow time," said Bair. "We're committed to doing things differently to create value for our customers."

Stonecipher has called the 7E7 a "game changer." That spirit of innovation is driving the 7E7 team to look for new ways of doing business better.

"Last year we clearly demonstrated that we are going to make decisions based on making this program a success," said Bair. "We can't accept a decision based solely on 'that's just how we always do it.' That's not good enough. From our materials selections earlier in the year to our new approaches for partnering, from our dramatic new interior concepts to our site selection, we focused on doing the right thing for the airlines, for passengers and for our program."

Bair said he expects 2004 will offer more proof that Boeing is rethinking how it meets the needs of its customers: "Our success on this program is really important. We know that the employees of Boeing all around the world share our excitement in bringing a new airplane to market. And they are all an extended part of our team."

loretta.m.gunter@boeing.com