A bad dream

First flight was “imminent”, VP commercial airplane programs Pat Shanahan told journalists on July 16.

So to most it was a shock when Boeing announced only days later on June 23 a new delay to first flight, until then seemingly on track for June 30, due to the need to strengthen part of the wing join area.

Boeing said that it discovered the need to strengthen the side-of-body area following testing of the full scale static test airframe in April which uncovered unexpected strain readings in some areas of the wing join.

“Consideration was given to a temporary solution that would allow us to fly as scheduled, but we ultimately concluded that the right thing was to develop, design, test and incorporate a permanent modification to the localised area requiring reinforcement,” said Boeing Commercial Airplanes CEO Scott Carson in the June 23 statement. “Structural modifications like these are not uncommon in the development of new airplanes, and this is not an issue related to our choice of materials or the assembly and installation work of our team. ” At presstime Boeing had yet to give an update on when it expects the 787 to make its first flight, and what impact that delay will have on the certification program and first customer deliveries.

In the meantime Boeing is carrying on with other ground tests, such as taxi testing, which began on July 7, while it continues to develop, instal and test a solution to the strain issue.

In the absence of further information from Boeng, many analysts now believe the 787 will now not be delivered until 2011, with many voicing scepticism on Boeing’s ability to recover the program in a timely fashion, given the 787’s history.

“Based on the program’s track record for continual negative discovery, we don’t see the wisdom in assuming ( June 23’s) revelation represents the very last setback,” Morgan Stanley analyst Heidi Wood wrote in a research note. “In fact, what worries us is the potential for more negative insights through the certification phase. Failure of the predictive models to anticipate the stress points that suspended first flight presents real risk the FAA will now insist on more data, slowing certification, hence our assumption for 2011 first delivery. ” Not surprisingly, many 787 customers have publicly expressed frustration at this latest delay, with ANA and Virgin Atlantic calling on Boeing to commit to a new timetable as soon as possible. Still, ANA subsequently increased its 787 orders, announcing on July 1 it would buy an extra five to take its total commitments to 55.

And for other airlines, the delay could be something of a blessing in disguise, delaying again by a few months their need to finance the aircraft and deferring introducing new capacity into a depressed travel market.

“You look at what’s been happening with traffic, especially premium traffic, especially premium Asian traffic, that really kind of gives this more of a context,” respected commentator Richard Aboulafia of the Teal Group said recently. “People sound almost relieved to not have to take planes right now. ” Then there is the longer term perspective, offered by NewYork based Bernstein Research, which wrote that: “assuming Boeing successfully delivers a game-changing aircraft, the company could capture an extended competitive advantage over Airbus on future designs. ” The research company notes that the scale of those advantages are not yet clear but in “aero structures, the move to a single composite barrel had significant weight advantages because there are far fewer joints than on the Airbus A350 panelised approach. Joints ultimately add weight to the airplane and add complexity to the manufacturing process.

Therefore, the 787 should have advantages over the Airbus design in the long term, although Boeing is potentially disadvantaged in the near term. ” Bernstein expects that “Boeing may also be able to use techniques learned on the 787 to produce innovative cross sections for future (ie 777) designs.

But Bernstein, which had earlier warned of “more surprises” on the 787, is not happy about the latest delay given Boeing’s management bullish outlook at Paris on the first flight.

“We had expected significant delays in the 787 flight test program, particularly due to the large amount of data that will need to be analysed during an intense period of parallel test flying. The first flight delay was unexpected because of the confidence expressed by management during the prior week at the Paris Airshow that first flight would occur by the end of June,” the report said.

“We see the problems with the delay in first flight as reinforcing our concerns about the flight test program and management processes at Boeing. This may turn out to be a minor issue with no substantive impact on the airplane’s structure or on the confidence Boeing has in its computational models. ” “On the other hand, more significant modifications to Boeing’s models could be required or broader structural modifications might be needed, which could lead to an extended delay. At this stage, we are assuming that the reinforcement will be straightforward.

Bernstein points out that the A380 also had a structural problem with its wing which turned out to be painless.

“When the Airbus A380’s wing broke at 147 per cent of maximum load (below the required 150 per cent), the reinforcement caused no real disruption, as its efficacy was readily demonstrated with computational models. ” “If the (787) modification is straightforward, Boeing will be able to continue systems testing and aircraft production. ” But in a blunt warning, Bernstein’s report said that “our concern is not the specific technical issue that Boeing faces today on the 787, but a performance pattern that suggests to us that we will see more incidents like last week’s as the program moves through an unusually aggressive flight test and certification program. As we have described in multiple reports, we believe that the combination of a technologically advanced program, a distributed supplier base, and a more entrepreneurial approach to program management has led to the current situation. ” Certainly Boeing has taken a big step to rationalise that “distributed supplier base” with its July 7 announcement it had agreed to acquire Vought Aircraft Industries’s South Carolina operations, where Vought builds 787 aft fuselage sections.

Boeing reportedly had been involved in negotiations with Vought’s owners the Carlyle Group for some months on buying the North Charleston facility, with the sale expected to be completed in the third quarter.

It follows Boeing’s buyout last year of Vought’s share in Global Aeronautica, the North Charleston based joint venture with Alenia Aeronáutica, to address quality and control issues on completed 787 work.

The move is significant in seemingly representing Boeing’s preparedness to ‘in source’ significant elements of 787 production. The company has been burned in recent years with quality control issues from certain suppliers, leading many analysts to question the benefits of outsourced production, although Boeing executives have repeatedly backed the business model.

Teal’s Aboulafia described the Vought deal as being “about securing the supply chain and undoing numerous mistakes. ” The purchase has also raised the prospect that Boeing may use the Charleston facilities to establish a second 787 final assembly line there, away from its unionised workforce in Seattle, which has in recent years shut down production at Boeing’s Everett and Renton plants with lengthy strikes.