BOEING CO. Company gears for launch of new 7E7 jet

Boeing needs a number of firm orders before committing to the new plane.
CHICAGO TRIBUNE
CHICAGO -- Boeing Co. is expected to announce today that its board has cleared the way for the company to move ahead with selling its newest jet, the last step before it considers a formal launch of the 7E7 Dreamliner.
Top executives also are expected to tell employees in the Seattle area that they have chosen nearby Everett, Wash., for the final assembly line after a months-long, nationwide site search.
If the 7E7 is delivered to its first customer in 2008, as planned, it will be Chicago-based Boeing's first all-new jet since United Airlines began flying the 777 in 1995.
Since then, two other Boeing programs -- one for a superjumbo jet and the other for the Sonic Cruiser -- have been scrapped.
Many consider the launch of a new plane vital to Boeing's commercial airline business, which is suffering along with the airline industry and is expected to deliver fewer planes this year than European rival Airbus.
Boeing's 11-member board met in Chicago on Sunday and Monday, listening to details about the 7E7, which the company has said will consume about 20 percent less fuel than other wide-body jets.
Officials declined to say whether the board gave Boeing's sales force permission to begin formally offering the 7E7 to potential customers, with whom the aircraft maker has been talking for months.
"If we do have news to share, it will be done out of Seattle on Tuesday," said Boeing spokesman Ken Mercer.
Doubtful approval
But few doubt the board gave its approval.
In September, sources said, the board gave Alan Mulally, head of its commercial airplane business, limited authority to offer the jet to Japan's two largest airlines: All Nippon Airways and Japan Airlines.
It is unclear how many orders Mulally and his sales force will need to win the board's approval for an official launch of the 7E7. Officials have said they expect a launch decision in mid- to late 2004.
But with a new chief executive at Boeing's helm, that timetable could change.
Harry Stonecipher, who replaced Phil Condit as chief executive in early December, used to run McDonnell Douglas Corp., which Boeing acquired in 1997. Stonecipher and his former company are known for financial conservatism.
That could mean higher expectations for 7E7 orders before the plane is officially launched, said Richard Aboulafia, an aerospace industry analyst at the Teal Group in Fairfax, Va.
Historically, it has taken about three dozen firm orders to launch a Boeing airplane, Aboulafia said. Indeed, the 777 was launched in 1990 with 34 firm orders from United Airlines.
"The problem is, we're not talking historical Boeing anymore," Aboulafia said.
The old Boeing typically took more financial risk in launching its airplanes than did McDonnell Douglas.