Boeing’s 787 Dreamliner: Simply too complex?

Boeing’s latest setback with its 787 Dreamliner shows just how hard it is to get a plane—based on new technologies—off the ground.

Earlier this week, a 787 had an emergency landing in Texas. The 787 was on a 6-hour test flight when it landed due to smoke in the rear of the plane. Test flights for the 787 were then scrapped. As for orders, Boeing said 787 sales were flat last week after Saudi Arabian Airlines completed a deal to acquire eight Dreamliners. Boeing also lost eight orders from Alafco, a Kuwait leasing company.

The emergency landing was just the latest setback for the plane, which is three years late. Boeing planned to deliver the first 787 to All Nippon Airways early in 2011. Those deliveries are now in flux. Boeing’s 787 debut has been delayed six times over composite materials, lack of parts, redesigns and a delicate dance with suppliers.

According to Bloomberg, Boeing CEO Jim McNerney said the company is studying the fire and will know “fairly quickly” what the impact on deliveries will be. Boeing in a statement (in full below) said the investigation is ongoing.

The larger question: Was the Dreamliner project too ambitious?

There’s no question that the 787 will get to the finish line at some point, but there’s a supply chain ballet underway, according to Howard Rubel, an analyst at Jefferies. Rubel noted that Boeing has completed 70 percent of the certification tests required and 80 percent of flight test hours. That was before the emergency landing of the 787 test flight.

Rubel’s view of the supply chain was notable. In a research note, he said:

In any development program, there is always a balance between minimizing the build-up in rework cost necessary for certification for in-production aircraft and having planes ready for delivery once certification is received. We are now at that stage. Boeing will, in effect, have two lines going running for deliveries. One will have planes that require the incorporation of changes identified in the certification process. The other will be the standard assembly line, which will conform to the type certification. In some cases, it will be easier to incorporate the changes into the supply chain than to access areas inside the completed aircraft. So some of the early-production aircraft may well be delivered after later aircraft in the production sequence. In some cases, this delay is the reason why the engine manufacturers have not yet shipped their power plants. Engines represent substantial working capital.

Now that supply chain dance gets even more complicated after the emergency landing.

Boeing could find a root cause quickly. Or the investigation could take a while. In any case, the 787 could be delayed again. Deutsche Bank analyst Myles Walton said:

We aren’t sure how quickly Boeing and its partners will have an answer on the root-cause and the remedy, but this is clearly another piece of straw on the back of the already tenuous certification/delivery schedule. At a minimum, we wouldn’t expect flight tests to continue until root-cause determination is established. We do believe investors are already prepared for an incremental 3 month delay on top of the mid-1Q 2011 first delivery.

If the 787 is delayed beyond three months this once promising project is going to be viewed much differently.

Update: Here’s Boeing’s statement:

Boeing continues to investigate Monday’s incident on ZA002. We have determined that a failure in the P100 panel led to a fire involving an insulation blanket. The insulation self-extinguished once the fault in the P100 panel cleared. The P100 panel on ZA002 has been removed and a replacement unit is being shipped to Laredo. The insulation material near the unit also has been removed.

Damage to the ZA002 P100 panel is significant. Initial inspections, however, do not show extensive damage to the surrounding structure or other systems. We have not completed our inspections of that area of the airplane.

The P100 panel is one of several power panels in the aft electronics bay. It receives power from the left engine and distributes it to an array of systems. In the event of a failure of the P100 panel, backup power sources – including power from the right engine, the Ram Air Turbine, the auxiliary power unit or the battery – are designed to automatically engage to ensure that those systems needed for continued safe operation of the airplane are powered. The backup systems engaged during the incident and the crew retained positive control of the airplane at all times and had the information it needed to perform a safe landing.

Molten metal has been observed near the P100 panel, which is not unexpected in the presence of high heat. The presence of this material does not reveal anything meaningful to the investigation.

Inspection of the surrounding area will take several days and is ongoing. It is too early to determine if there is significant damage to any structure or adjacent systems.

As part of our investigation, we will conduct a detailed inspection of the panel and insulation material to determine if they enhance our understanding of the incident.

We continue to evaluate data to understand this incident. At the same time, we are working through a repair plan. In addition, we are determining the appropriate steps required to return the rest of the flight test fleet to flying status.

Boeing will continue to provide updates as new understanding is gained.

Related:

• Boeing to delay 787 Dreamliner up to 10 months, report says
• Boeing delays Dreamliner deliveries over engine availability
• Boeing: 787 Dreamliner first delivery on track, but schedule under pressure
• Boeing 787 Dreamliner adds another 20 feet of length
• Boeing 787 loses thrust in an engine, lands early
• 787 clears initial airworthiness
• 787 Dreamliner designer on Boeing: ‘A designer is only as good as his client’
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