Regardless of whether or not a new 787 delivery delay affects Boeing’s financial guidance, this is a huge disappointment.  Not just for fans of the airline industry either. 

These days, we tend to see companies as cold and calculating and making business decisions based on logic rather than emotion.  It’s a part of our culture to view particularly large companies like Boeing in just that manner.  It is also a strong habit among the financial industry to view and analyze things on that level and that’s not entirely unjustified. 

However, companies are run by human beings.  Human beings do react emotionally to developments whether in their personal lives or within their business.  Think I’m wrong?  Go walk around a company on the day of a big layoff. 

This latest delay is going to emotionally disappoint quite a number of people in the airline industry.  It’s going to disappoint decision makers within the airlines themselves and it’s going to disappoint lessors too.  These repeated disappointments are going to be the stuff that goes into books about Boeing and the airline industry 10, 20 and 30 years from now.  It’s going to be described as the often delayed, highly problematic 787 program and the only thing we don’t know yet is whether or not the 787 is actually the success we think it is. 

That kind of stuff gets remembered not just by today’s decision makers but by tomorrow’s decision makers.  The junior managers who may well be the VP of Operations or VP of Maintenance at an airline and an influential person on future aircraft purchases. 

Boeing isn’t the only game in town and there is bad news knocking on the door, too.  The threat isn’t Airbus.  Boeing knows how to compete with Airbus.  The threat comes from the aerospace capabilities being developed by Bombardier, Embraer, Mitsubishi and others.  Regional jet aircraft now, yes, but they’re acquiring intellectual capital that will permit them to build them bigger and bigger.  That’s the threat.

And Boeing keeps giving airlines a reason to continue to look at the other guys and wonder. 

You see, Boeing keeps setting a schedule and assuring everyone that they have plenty of safety margin built into these schedules to account for risk.  And then those schedules slip again.  Credibility on this program and, frankly, future programs, is swirling downwards in the toilet.

At some point, you have to be a company who keeps its word.  You have to see the leaders of that company decide to make something happen *despite* the risks and problems encountered.   It seems that about 8 months ago, Boeing’s leadership and particularly the leadership of the 787 program should have declared both internally and externally that this is it.  No matter what it takes, this program will be kept on schedule from here on out. 

But that didn’t happen. 

This isn’t a slight schedule slip.   First deliveries were going to happen early to mid Q4.  Then they unofficially slipped to late Q4.  With the latest announcement, no one really credibly expects deliveries until early Q2 despite Boeing saying it will be a Q1 2011 delivery.  The truth is, none of us know when this aircraft will be delivered.  The people backing that schedule just haven’t made things happen. 

My own prediction:  At the earliest it will be early Q2.  It’s just a guess. 

But at this point my guess is as good as Boeing’s.

Filed under: Aircraft Development by ajax