=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/chronicle/archive/2003/09= /16/BUGDS1NKNP1.DTL ---------------------------------------------------------------------- Tuesday, September 16, 2003 (SF Chronicle) Boeing ponders whether to build new 7E7 jetliner Peter Pae, Los Angeles Times Everett, Wash. -- The Sonic Cruiser was supposed to have been Boeing Co.= 's future, a superfast jet for the 21st century that would protect its longstanding status as the world's largest commercial aircraftmaker. But in the cavernous hall of Boeing's airplane design and engineering center here, the only reminders of the Sonic Cruiser are piles of promotional posters tossed on the floor, with a "free, no limit" sign next to them. Boeing scrapped plans for the slick jet during the air-travel slump in 2002. Just a year earlier, the company halted a project to develop a supersized 747 jumbo jet that could carry up to 500 passengers. Now, Boeing is mulling over another new aircraft, a fuel efficient, easy- to-build jet dubbed the 7E7 Dreamliner. It, too, could end up on the design center floor. At least two board members are said to be concerned about the 7E7's development costs. What's more, airlines haven't shown any enthusiasm for it, in part because they have been disappointed by Boeing's repeated failures to bring new planes to the market. "They've come up with so many ideas in the past few years that I'd like = to see more details before I comment," Singapore Airlines' chief executive, Cheong Choong Kong, said during a recent aviation conference. Boeing directors are expected to decide by year-end whether to begin marketing the 7E7. Analysts say the vote will be a critical turning point for the Chicago company. If Boeing opts not to invest in the new jet, it could lose more business to European archrival Airbus, which is expected this year to surpass Boeing for the first time in deliveries of passenger jets. "It's put-up-or-shut-up time" for Boeing, said Richard Aboulafia, analyst for the aerospace research firm Teal Group. "If they don't do it, they'll be sending a message that they won't be doing anything else again. They'll be coasting downhill for 20 years until there is no commercial aircraft business." The economic stakes are huge. Boeing is the United States' largest exporter. Its commercial aircraft unit posted sales of $28 billion last year and employs nearly 58,000 workers nationwide. But the company that pioneered jet travel hasn't introduced a new passenger plane since 1995, when it rolled out the 777. Meanwhile, Airbus has launched several aircraft in recent years, and its 550-passenger A380 super- jumbo jet is almost ready to take off. Developing an airplane can cost as much as $10 billion, a significant investment at a time when airlines are grounding jets and struggling to survive. Companies have folded or gotten out of the business altogether after betting the farm on one aircraft -- and losing the gamble. Following lackluster sales of its L-1011 jet, Lockheed Aircraft exited the commercial market in 1984. Boeing began designing the 7E7 in earnest about a year ago, although sma= ll teams at the company's secretive Phantom Works research units in Seattle and Long Beach have been working on the idea for years. The 7E7 would seat 200 passengers, be powered by a new jet engine and built with mostly lightweight composite materials. It would use 20 percent less fuel than a conventional plane of comparable size, and have a range similar to Boeing's larger 777 and 747 aircrafts, which can travel 8,000 miles or more nonstop. In recent weeks, 7E7 engineers who had been working in Everett, just nor= th of Seattle, were moved to a sprawling facility nearby where Boeing came up with the 777 airliner nearly a decade ago. Desks have popped up in once- empty hallways, a sign that top company officials say shows Boeing's commitment to the aircraft. "There is a whole lot of enthusiasm here," said Walt Gillette, the head engineer leading the design of the 7E7. "We will have an airplane that will have broad appeal. It's an airplane that I expect you'll see even in the 22nd century." But will it pass muster with Boeing's board? None of the company's 11 directors would comment publicly about the 7E7, but people familiar with their discussions say that at least two key members, Harry Stonecipher and John McDonnell, have raised questions about the cost of developing it. McDonnell, whose father founded the namesake aerospace company that merged with Boeing in 1997, is one of Boeing's largest individual shareholders. Although not opposed outright to building the plane, the two have pushed Boeing engineers to slash development costs by up to 40 percent because of the uncertain future of the airline industry, according to one source. Another worry for the two men is that the jet could be a drain on the company's defense business, which has been growing steadily. Analysts say that making a more fuel-efficient plane isn't as technologically challenging as producing a faster plane, as Boeing tried to do with the Sonic Cruiser. With the 7E7 projected to cost 10 percent less to operate than Boeing's 757 and 767 jets, airlines may find it more appealing than a gas guzzler that flies faster. The makeup of the 7E7's body also could help keep the plane flying longer because the composite materials that would be used last longer than aluminum, the main ingredient in most jet bodies. "There is nothing sexy or exciting about building an efficient plane, but it's a slam-dunk for accountants crunching the numbers," said Adam Pilarski, who was chief economist for McDonnell Douglas before it was acquired by Boeing. Boeing won't say how much it has invested in the 7E7.=20 ---------------------------------------------------------------------- Copyright 2003 SF Chronicle