Boeing's Dreamliner, Airbus's Nightmare

Boeing's Dreamliner, Airbus's Nightmare

The Dreamliner became reality on Sunday, when Boeing unveiled its latest American assault on European rival Airbus: the midsized wide-body 787. Although it has yet to actually fly, everyone is already declaring Boeing the winner of the aviation wars for the next generation to come. But is it all just a lot of hot air? Although the new aircraft launched Boeing (nyse: BA - news - people )'s shares up $1.02, or 1.0%, to $99.90 on Monday, there are still a few question marks hovering over the 787 Dreamliner, which was revealed to the public on Sunday at the final assembly factory in Everett, Washington. The maiden voyage is scheduled to run in late August to September, and until then the 787's most famous talking points--fuel economy, one-piece composite fuselage sections, eco-friendliness--remain hidden to the public. The much-vaunted use of composite materials, which account for almost half of the Dreamliner's structure, may make the plane lighter, more fuel-efficient and quieter, but it is also uncharted territory. "The only uncertainty is the fact that the composite fuselage is untried technology," said Doug McVitie, managing director of Arran Aerospace. "This is the first time a wide body has been made out of composite barrels." Rather than rivet together several large aluminum pieces, Boeing's engineers have opted to bake a one-piece fuselage in an oven known as an autoclave. The several 22-foot-long sections that make up the 787, which are layered in carbon-fiber composites, are rivet-free and consequently lighter and more durable. But although military aircraft have been taking advantage of these materials for some time, this will be a baptism of fire for composites in a high-pressure, long-haul environment. At the presentation, Jim McNerney, Boeing's president, also invoked the 787's "environmentally progressive" contribution to aviation. Fuel consumption will be 20% less than similarly sized planes, carbon emissions will consequently be cut and engine noise will be reduced by 60%. "It's 90% spin and 10% nonsense," said McVitie. He added that the engine makers, not the aircraft manufacturers, shouldered most of the burden of making aviation eco-friendly. Even the Airbus A380, the titanic, double-decker superjumbo that carries more than twice the Dreamliner's 250-passenger capacity, has been marketed as "green" on a passenger per mile basis. But McVitie added that it was General Electric (nyse: GE - news - people )'s GenX engine, currently only available for the 787, that had the upper hand in terms of technology. Although GE offered a similar model for Airbus's midsized A350 aircraft range, issues of compatibility and manufacturing with the largest of the planes have led to unresolved negotiations between the two companies. However, despite the question marks, the success of the 787 in hard money terms should make Airbus worried indeed. Boeing has an order book currently worth $111 billion, compared to Airbus's $48 billion of orders for the A380, and the Dreamliner costs slightly more than half the A380's $300 million price tag, or $165 million. "I think the order position at Boeing pretty much speaks for itself, in terms of the 787," said Zafar Khan, analyst at Societe Generale. "And for Airbus to be able to regain a position they need to produce something as good."

Source:
http://www.forbes.com/markets/economy/2007/07/09/boeing-787-dreamliner-markets-equity-cx_ll_0709markets22.html