Aviation Week & Space Technology Login|Subscribe |Register Midyear Decisions on 747, 767 By Michael Mecham 02/06/2005 05:12:46 PM THE OLD AND THE NEW As it continues its drive toward making just three families of commercial airplanes, Boeing will decide by midyear whether to drop its flagging 767 or build the stretch 747-400 as a niche competitor to the Airbus A380. In the next week or so, the company also will decide whether to sell its Wichita, Kan., facility, the company's largest commercial airplane factory outside Washington state. Wichita produces 737 fuselages and will make the 787 nose and forward fuselage. It has been for sale for the past year. President and CEO Harry Stonecipher set the deadlines last week as he reviewed the company's fourth-quarter and full-year results for 2004, a year in which Boeing's effort to get the 767 accepted by the U.S. Air Force as its future tanker/transport was stalled by ethics inquiries and congressional anger over the program's price tag and the way the deal was put together. Stonecipher has previously called for a midyear decision on the 767. His reiteration makes clear that, tanker deal or not, a decision is to be made. That leaves two options, should Boeing win a tanker award after the line is closed: reopen it at a high cost, or switch to another aircraft platform. Regardless of its ownership, Wichita will remain a prime production spot for commercial programs. To reduce costs, Boeing has been shedding facilities for a number of years. The theory is that with independent ownership, they will be free to seek outside work while still supporting major Boeing programs. Stonecipher wouldn't comment on who the bidder is, but he said any deal will be vetted with unions and have to pass government competitiveness reviews. "There's some tough, tough negotiations that have to go on, and they are," he said. About six weeks ago, Stonecipher warned negotiators that the talks had dragged on so long that he was becoming indifferent. As of last week, he expected the deal to be completed within 10-20 days. "They're either going to get finished or we're just going to say, wait a minute, let's give this thing up and get back to business," he insisted. Still, he was optimistic the plant will be sold. The past year has seen Boeing launch the 787 as the world's longest-range 200-300 seater. But the company also closed its 757 assembly line and said it will shut down 717 production in July 2006 if there is not an influx of orders. In both cases, Stonecipher said, the decision was made because the programs demonstrated no future. The same cloud now hangs over the 767 and 747. Boeing and airlines have long talked about a 747 successor, but the company's answers never went as far as Airbus with its 555-seat A380, which is on the eve of flight testing. That's because Boeing's market forecasts are not nearly as optimistic for large transport sales as Airbus'. Still, some airline customers don't want Boeing to leave the very large airplane field even as the company's orders shift away from the 416-seat 747-400 to the 300-365-seat 777. "We have a number of customers that wanted to know what we could do with a better 747," Stonecipher said. "So we gave [the sales team] authority to go out and test the market." He would not cite performance specifications. But the target is to fill the seating gap between the 365-seat 777-300ER (or the competing Airbus A340-600) and the A380. The aircraft would take advantage of technology advances set for the 787, most notably in its more fuel-efficient powerplants, a choice between General Electric's GenX and Rolls-Royce's Trent 1000. Through the end of 2004, Boeing had taken 1,385 orders for the 747 and made 1,353 deliveries. Of the 32 unfulfilled, 20 are for the standard 747-400 Freighter, three for the extra-range freighter and nine for the -400 passenger aircraft. When Boeing launched the 747-400 Special Freighter program early last year, it provided further evidence of the probable future of the 747-400, now that alternative aircraft are in the market. The SF has attracted 22 orders and 19 options. Should the 747 production line be closed, there will be a pool of more than 400 747-400s to draw from for conversion to dedicated freighters well into the future. The 767 is in a different position: it's got a clear, more capable successor in the 787. The tanker contract would sustain the production line for years, but Boeing is not likely to garner many commercial orders now that the 787, which is 20% more fuel efficient, is being offered. Boeing has sold 950 767s and had 25 yet to be delivered at the end of the year. Five are freighters, but the extended-range -300/-400s account for most of the list. Japan Airlines and All Nippon Airways dominate the known order list with 11 orders between them; 13 orders remain unidentified and one is held by Ethiopian Airlines. But the pending order list is suspect. Already, ANA says it will convert two 767-300ER orders to 777-300ERs (see p. 26). Ironically, an upturn in airline activity has created a shortage of medium-sized lift. "We need 30 767s right now to apply to some interim-lift cases," Stonecipher said. "We wish we had them." But he quickly reiterated Boeing dogma, that it will not build whitetails--unordered aircraft--on the hope of finding customers for them. Although Boeing government programs were hit one after another by ethics scandals last year, none was hurt more than the U.S. Air Force's plan to lease 100 KC-767s as tanker/transports. Stonecipher expects no KC-767 decision until after former Boeing Chief Financial Officer Michael Sears is sentenced later this month in the influence-buying scandal. Revelations made during sentencing of Darleen Druyun, a former USAF acquisition executive who later won a top job at Boeing, took some time for Boeing to address, Stonecipher noted, and he anticipates similar delays should Sears' sentencing produce more revelations (AW&ST Oct. 11, 2004, p. 45). While he expects the tanker program to go forward, "it's not clear what it will be. We're fully prepared to charge up that hill in any direction they want to go." The year-end results came a week after Boeing scored an impressive commitment from six Chinese airlines for 60 787s--a record-setting order for China (AW&ST Jan. 31, p. 34). They made deposits to assure spots in the 787 production line in mid-2004, but declined to make their decision public until two weeks ago. THE TIMING FOR AIRCRAFT sales is a "complicated, long process," says 787 Program Manager Mike Bair. "The Chinese are wonderful negotiators and they're very patient." He says Boeing is holding commitments for 250 787s even though it has made public only 186. The others are awaiting announcement decisions by carriers. As Boeing moves toward a firm configuration this summer, it has adjusted the 787's seating capacity upward. The standard 787-8 has gained a nominal six extra seats and is now to carry 223 passengers in a three-class configuration. The short-range 787-3 gained seven seats and is now listed at 296 seats in a two-class configuration. And the stretch 787-9 will seat 259 in three-class seating, a gain of two seats. The wingspan of the 787-8/-9 has been lengthened 4 ft. to 197 ft., which puts it in a class with the larger 777. The wingspan for the 787-3 will be just 170 ft., so it can fit in smaller gate areas. Bair joked that the name of the new aircraft had turned into a food fight between partisans "of the proud tradition of seven series airplanes" and those ready for the chance to market an "efficient" airplane with the 7E7 moniker. Tradition won out months ago, but an announcement was kept secret in anticipation of the Chinese order because numerology is so important in their culture. Says Bair, "787-8 for the 2008 Olympics just kinda made a nice package for them." Regardless, the decision to make model designations with a single number rather than three (787-8 rather than 787-800) was retained. So was the marketing name "Dreamliner." Roger EWROPS