Airline industry analyst, Richard Aboulafia, gets it.  He’s written his monthly letter and addresses almost exclusively the mis-steps that Boeing has been engaged in.  You can read it HERE.

Even if they seem like me too’s, I want to dig in here.  The 787 and its launch was a signal event for Boeing in that they managed to not really do anything innovative for nearly 2 decades prior to that.  The 777 did embody some innovation, yes, but it also had a lot of roots in evolution too.  The 787 signaled that Boeing was to raise the stakes considerably.

The effect was to make the market start responding to Boeing rather than see Boeing react to its competitors.  That was a very good thing.  Even despite the 787 problems, Boeing managed to command the attention of both customers and its competitors.   Admittedly, that has been diluted somewhat by Boeing’s “McDonnell Douglas” approach to the 747-8i.

In the narrow body race, Boeing barely got on the train.  It got on but barely and even today there are things we just don’t know about the 737MAX that we already do know about the A320NEO.  It’s taking a bit too long to reveal the 737MAX, in my opinion.

The market response to the 777-X concepts was an unqualified “We want it!”.  You could not have had a more positive response to the ideas being floated and those responses were notable both for Aboulafia’s reasons as well as one other:  They came from just the right mix of airlines.  The kind of airlines that are near ideal as a mix of customers.  You should never, ever ignore that.

More importantly, not only is the defection important psychologically and within the market.  Here’s another problem:  When these customers defect, you may not get a chance to address your mistakes with them for 20 or more years.  That makes a defection very, very bad in terms of impact to a business like Boeing.

Finally, a capital intensive business such as Boeing doesn’t win by tossing rewards to its shareholders.  It wins by being brave *and* right, over and over again.  To be right in a business that requires engineering innovation to provide the gains that airlines want in performance, YOU MUST BE BRAVE ENOUGH TO TRY.

Boeing just signaled that its losing its courage.  Not good.  Not good at all.  Aim for excellence, execute to get to that goal and you will win and thrive.  Wait to see what the other guy is doing in order to provide something just 1% better leaves you exposed to being a has been.

Filed under: Aircraft Development, Airline Fleets by ajax
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