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Tue, Apr 01, 2008

Boeing Throws In The Towel On 787

Now Offering Customers GREAT Deals On 767-500 'Miserliner'

ANN APRIL 1st 'SPECIAL EDITION': "Enough!" That was the word from The Boeing Company on Tuesday, as the American planemaker shocked the aviation community with its decision to discontinue further development on the delay-plagued, composite-bodied 787 Dreamliner.

In his speech to Boeing line workers at its widebody production plant and assembled media, Boeing Commercial Airplanes CEO Scott Carson said the confluence of a number of difficulties on the 787 -- ranging from fastener shortages, systems integration issues, and supplier woes -- pushed Boeing in the direction of scrapping the 787 program, but it wasn't the final determining factor.

"With the Air Force's decision to award the KC-X tanker bid to Northrop Grumman and EADS, we're left with the 767 production line that, as it stands, would be shut down in just a few years," Carson said.

"We love the 767, and feel the airframe has many, many years left in it... Many trouble-free years, using parts that suppliers are used to building, from materials they're used to working with, assembled with common fasteners, with no need to transport large body sections onboard expensive converted 747s."

Carson also announced the airliner program Boeing hopes current 787 customers will transfer they're order books to: the upcoming, ultra-long-range, 767-500 "Miserliner," scheduled to enter service by 2016.

"That's with a long "i," Carson explained, "not like in 'miserable.'"

Fitted with the high-bypass GEnx turbofans developed for the 787 program and other advanced technologies, Boeing projects the 767-500 Miserliner "will deliver to its customers roughly 85 percent the efficiencies over current models we had predicted for the 787... which, hey, isn't bad," Carson added.

Despite the positive "spin," Carson's surprise announcement sent Boeing shares tumbling, and customers for what had been Boeing's best-selling commercial aircraft scrambling.

"We had no idea it was this bad," said Bubbles Yamagura, spokesperson for 787 launch customer All Nippon Airways. "[Boeing] kept us apprised on the delays... but we thought those issues had been addressed. In fact, we expected an announcement of first power-up today, not the total abandonment of the program."

"Our airline prides itself on being at the cutting edge of technology and innovation," Yamagura added. "It is unlikely we'll chose to transfer our orders to an airframe that's been behind the times for the past 10 years, even if it does have fancy new engines."

Steven Udvar-Hazy -- the outspoken and influential chief of International Lease Finance Corp., the single largest customer for the 787 -- was even more verbose in his criticism of Boeing's about-face.

"Today, April 1, 2008, is the date Boeing officially conceded the commercial airliner market to Airbus and other rivals," Hazy slammed. "I've certainly had my doubts with the timeframes Boeing had given to date regarding the Dreamliner, but never did I imagine Boeing would stoop to cancelling the project. They're going to lose billions in orders, and trillions in reputation in the marketplace!"

Boeing's Carson downplayed such fears, noting the planemaker's 737 narrowbody and 777 twinjet widebody airliners continue to be fast-sellers... which should help Boeing recoup, over time, the $347 billion loss the planemaker is expected to incur in FY 2008 due to the cancellation of the 787 program.

In the end, Carson said, the decision to stick with proven technologies will prove to be the best choice for Boeing, and its customers.

"It seldom pays to be the innovator," Carson said, waxing philosophical. "Often, the guy who is second to the finish line actually wins the race, when you speak of profitability. We've no doubt composite technologies will be seen in commercial airliners in the near future... but not as soon as we had hoped, and not carrying a Boeing logo.

"And good grief to all that fancy-pants carbon fiber construction, high-humidity cabin air systems, and integrated cockpit and cabin electronics nonsense that allows any 14-year-old with an iPod to reroute the plane inflight to Hannah, MT, where ever that is," Carson added.

"Let Airbus try to do it with its A350 XWB. Heck, they probably had the right idea from the start, with that re-winged A330 concept, before they decided to follow us down the primrose path of composite fuselages."

FMI: www.boeing.com/miserliner

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