Clean-Sheet – Boeing’s all-new jet: The Business Model

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This is the last in a three part series on the development of Boeing’s all-new jetliner. Part three places the business model Boeing may employ under the microscope as it learns from its past mistakes on the 787. Last Monday’s Part One looked at market evaluations and the configuration and materials selection process and last Tuesday’s Part Two looked at how Boeing will make the 20% leap in fuel efficiency in its new jet and what new advanced technologies are under consideration.

Mike Bair is a man in his element. 
Boeing’s vice president of Advance 737 Product Development is working to configure Boeing’s next all-new jet, an aircraft designed to fill the space below the carbon fiber 787, not simply replace its venerable 737 workhorse.

Though central to the development of an all-new aircraft is how Boeing chooses to industrialize the project and how it bridges the transition with its current 737 product line, which it expects to continue for decades to come.

With 843 sales, his goal is to replicate the 787’s market success, while avoiding its pitfalls. Designing a plane that meets market requirements is part of Boeing’s pedigree, though configuring a new jet is just as important as crafting and executing the right business model to avoid the mistakes of its predecessor.

Bair was one of the chief architects – and the original program manager – of the original 787 business plan that horizontally integrated supply partners, shifting both design and manufacturing responsibility away from Boeing, a model that has served up an excruciating lesson for the airframer with years of delays and billions of dollars of overuns on the program.

“I have a lot of scars, so I know what not to do this time around,” says Bair who was replaced as program chief in October 2007 by now-vice president of airplane programs, Pat Shanahan.

Boeing has embraced its mea culpa attitude about its 787 woes, reflecting on its mistakes and generating headlines that reflect its contrition about the events of the past three years. While acknowledging its past mistakes is absolutely essential, not repeating them remains uncompromisingly more vital.

Specifically, Bair points to making the overall program schedule less aggressive and “adjusting the partner model” to meet a 2019 or 2020 entry into service for the new jet while avoiding the mistakes of the past.

“We went too far on the 87, and it cost us,” he says of the partner model that initially saw all major structural components, save for the aircraft’s vertical tail, built by supply partners.

Bair says Boeing is “not undoing [the partner model],” and adds “There’s a lot of instances where it worked just the way we wanted it to, but there were too many where it didn’t. So being more thoughtful and given the experience we’ve had on the ’87’, making sure we use that as we put together whatever the partner model is going to be on this airplane.”

This post was originally published to the internet between 2007 and 2012. Links, images, and embedded media from that era may no longer function as intended.

This post originally appeared at Flightglobal.com from 2007 to 2012.