Boeing

BOEING 7E7

Case Analysis Report

Introduction

Boeing is an American multinational corporation that manufactures and provides commercial jetliners, military aircrafts, satellites, weapons, communication system and other military platforms and defense systems. It is also the one of the largest defense contractor in the world. Boeing focused on the research and development to provide excellent and unique specification of aircraft that no one can replicate.

In 1994, Boeing 777 had been highly successfulin the commercial aircraft industry. After few years, it cancelled its two programs. One is the “Sonic Cruiser “which promised to fly 15% to 20% faster than any other commercial aircraft. It was cancelled due to insufficient market interest. The passengers were not willing to pay premium price for a faster ride. In 2003, airline profits had declined due to war of US and Iraq, global terrorism and the spread of deadly disease called SARS. In the same year, Boeing 7E7 was announced by Michael Blair, the leader of the 7E7 project. This aircraft has the capacity of 200 to 250 passengers that could travel both short domestic and long international flights. It would use less fuel, incur cheaper operating costs and has long or short distance flexibility that would attract customers at the right price. It would be the first commercial aircraft built primarily with carbon-reinforced material which was stronger and lighter than traditional aluminum. It was also said that it would use composites to reduce manufacturing costs. However, it has risk. Composite materials were suspected as contributory cause to a 2001 plane crash in New York. 7E7 were subsequently called “Dreamliner”. For Airbus, its chief rivalry, it was called as “salesperson’s dream and engineer’s nightmare”. And since it has the capability for long distance flights, it would need a Snap-on wing extension. However, it was very costly. The cost of the project could be high as $10 billion and there was an...