Sky High: Boeing Rolls Out Dreamliner

To prevent metal fatigue, conventional airlines must be pressurized at 8,000 feet, creating dry, thin air. Humidity is kept purposefully low to prevent corrosion. But plastic changes all that. The Dreamliner will have more oxygen in the cabin, more humidity and will be pressurized at a lower altitude.

"So the dryness, the fatigue you feel at the end of a flight won't be there," says Bair.

Boeing invested $8 billion in developing the 787, betting airlines and passengers would want a medium-sized plane that can fly between almost any two cities on Earth, bypassing congested hubs.

Boeing's competitor, Airbus, bet more than $12 billion that passengers would want a super jumbo plane, the A-380, operating between the world's biggest hubs. A-380 sales were stuck for months below 170. Only 14 airlines have bought the big plane and the only two U.S. purchasers, FedEx and UPS, cancelled their orders for a cargo version. And delivery of the A-380, plagued by production problems, is two years behind schedule.

Bair is asked if Boeing had the right strategy, Airbus the wrong one.

"We were righter than they were," he says.

Clearly, the Dreamliner has given Boeing new life.

Twelve years ago, Boeing seemed in a tailspin that might cause it to drop the commercial aircraft business. There were serious production problems and problems with the quality of some aircraft coming off the manufacturing line. There was scandal and the abrupt departure of two chief executives. Boeing's market share in a two-manufacturer market slipped to 45 percent. And for five years, Boeing has delivered fewer planes than Airbus.

But now, Airbus finds itself five years behind Boeing in the development of a competitor to the 787, and the Dreamliner has Boeing poised to regain the number one position in the all important "planes delivered" category.

"I'm hard pressed to think of many other manufacturers that were down for the count," says The Teal Group's Aboulafia, "and all of a sudden turned it around, invented a new killer product and basically staged a huge market comeback."

It took more than the 787. Boeing, according to analysts, reinvented the way it did business.

A principal example is that the risk of building the Dreamliner has been shared with other U.S. manufacturers and companies in places like Japan and Italy. Instead of doing all the work at Everett, Boeing's partners prefabricate components and ship them to Washington where they are assembled. It takes just three days to assemble a 787, compared with 18 days to assemble the 777.

"Assuming the 787 works out as planned and arrives when intended," says Aboulafia, "then Boeing's going to have two thirds of the market in a couple of years."

Japan's ANA is the first airline scheduled to fly the 787 in May of 2008.

Some analysts worry that Boeing could face production problems. Recently, some composite parts did not fit together as they should have and the company has faced a shortage of titanium fasteners need to "snap" pieces together.

But Boeing executives say those problems and solved and Boeing employees say Detroit's beleaguered carmakers could learn from the airplane maker.

As production engineers Brennan Dunlap and Don Bryant take a break from overseeing the assembly of the first Dreamliner, they praise executives who managed the turnaround.

Says Dunlap, "They did what is very hard for a company to do: predict where the customers will be before the customers know it. I think Boeing did that."

Adds Bryant, "It's an incredible machine, it really is."

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