February 2005 
Volume 03, Issue 9 
Commercial Airplanes
 

Flying toward goals

Customers, financiers get an update from Boeing on 7E7 development

BY YVONNE LEACH

Boeing and representatives from about 70 airlines and financial institutions spent two days in Seattle late last year discussing the all-new 7E7 Dreamliner airplane's progress as Boeing moves toward finalizing the configuration.

The large-scale meeting, called Progress Summit II, was similar to one held in 2003. It featured open discussion on customer requirements, concepts for standardizing and simplifying the 7E7, and airplane financing.

Welcome to the club; we’re glad you’re here

JAL, Continental, Vietnam join 7E7 launch team

Market response to the 7E7 "has been unprecedented," said John Feren, Boeing 7E7 Program vice president, Sales, Marketing and In-Service Support. The airplane's strong appeal is validated in the breadth of customers who have announced their selection of the 7E7—from a regional and international carrier to a long-haul airline to leisure and scheduled-service carriers. Even an emerging, low-cost startup airline has chosen the 7E7.

IN DECEMBER, THREE MORE AIRLINES SAID THEY PLANNED ON PURCHASING THE AIRPLANE:

Japan Airlines Corporation (JAL) selected a total of 30 7E7-8 and 7E7-3 Dreamliners as its next generation of mid-sized twin-aisle aircraft. "The 7E7 will be the key airplane on a variety of domestic and international routes and will provide outstanding flexibility in our route planning," said Takenori Matsumoto, senior managing director, Japan Airlines Corp. "We are very excited about the benefits of the 7E7 and the wonderful flying experience it will provide our customers."

Houston-based Continental Airlines became the first major U.S. carrier to join the 7E7 launch team when it said it planned to purchase 10 airplanes. "The 7E7 is simply a game changer," said Gordon Bethune, then-Continental chairman and CEO. "It will position Continental for significant international growth from our New York and Houston hubs over the next decade."

Vietnam Airlines, the national airline of Vietnam, joined the 7E7 launch team when it committed to ordering four 7E7s. "We are looking forward to becoming a Boeing 7E7 operator," said Nguyen Xuan Hien, Vietnam Airlines president and CEO. "The 7E7-8 will allow Vietnam Airlines to further develop our route structure to include city pairs that would otherwise not be financially viable, while providing increased comfort to our passengers."

THESE CARRIERS JOIN FIVE OTHER AIRLINES ON THE LAUNCH TEAM:

ANA (All Nippon Airways), a regional and international carrier in Japan, became the official 7E7 launch customer in April when it ordered 50 7E7s.

In June, Air New Zealand signed an agreement to acquire two Boeing 7E7 aircraft (and 777s) to assist its fleet growth on long-haul international flights.

Blue Panorama, a privately owned leisure carrier with an all-Boeing fleet based in Rome, chose four 7E7s in July.

First Choice Airways, a leisure and scheduled charter carrier based in the United Kingdom, announced in July that it plans to add 10 7E7s to its fleet.

Las Vegas-based Primaris Airlines Inc., an emerging commercial airline offering distinctive value for business travelers serving domestic and international routes, chose 20 Boeing 7E7s in October.
As in the past with the 777, Commercial Airplanes has involved customers early in the process of defining the airplane and considers their contributions essential to Boeing getting it right. "The perspective and insight our customers have shared with us to help make the 7E7 the best value proposition is truly amazing," said John Feren, vice president of Sales, Marketing and In-Service Support for the 7E7 Program.

7E7 progress summit meeting

At the summit, 7E7 Program officials focused on key features of the airplane that deliver value to airlines by lowering costs and increasing revenue opportunities.

Because the 7E7 will use 20 percent less fuel than today's airplanes, it has a clear cost advantage. Program officials also pointed to the extensive use of composite materials that make the airplane lighter and offer maintenance savings, as composites are not subject to the same fatigue and corrosion issues as aluminum.

On the revenue side, airlines that operate the 7E7 will gain an advantage over their competitors by providing passengers what they want, program officials said. The 7E7 offers more frequent, nonstop flights and a more comfortable cabin experience that will make it an airplane preferred by passengers. In addition, the 7E7 offers greater revenue cargo capacity, a source of revenue for airlines that can mean the difference between profit and loss on a route.

"We strongly believe our future is with Boeing and the 7E7," said Franco Pecci, chairman and CEO of 7E7 customer Blue Panorama. Pecci said his team was impressed with the new interior, innovative use of composites, commonality of parts and interchangeability of engines. That's on top of the performance: The 7E7 is an airplane that can fly more than 15 hours with a maximum load of 299 passengers and do it using 20 percent less fuel.

"We are a privately owned airline, and we are looking constantly at saving costs. The 7E7 can do this for us," Pecci said.

One important topic at the Progress Summit was how Boeing is helping airlines maintain the value of their 7E7s by increasing product commonality. While customization might seem like a benefit, it actually reduces the long-term value of an asset such as a commercial airplane. "You need a product that can be moved from customer to customer throughout its life," Feren said.

To ensure the 7E7 remains a valuable asset over its lifecycle, the 7E7 Program has actively involved financial institutions in the 7E7's development. "The fact that Boeing is asking financiers early about what's important in the design of this airplane is unique," said attendee Bert van Leeuwen, a senior vice president with DVB Bank in Germany. "Taking out the technical risks and making the airplane easily transferable reduces the risk profile and therefore translates into lower finance costs."

The 7E7 Program will finalize the 7E7's configuration by mid-2005. The first 7E7 is set to enter production in 2006, with flight test during 2007 and certification, delivery and entry into service in 2008.

yvonne.l.leach@boeing.com

 
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