With the 7E7, an Airbus executive argued that Boeing seemed to be promising a “salesperson’s dream and engineer’s nightmare.”3 The 7E7, while carrying between 200 and 250 passengers, would be capable of both short, domestic flights as well as long, international hauls. It would use 20% less fuel than existing planes of its projected size and be 10% cheaper to operate than Airbus’s A330-200. At a time when major airlines were struggling to turn a profit, less fuel, cheaper operating costs, and long or short distance flexibility would be a very attractive package at the right price.
Skeptics of the 7E7 were not in short supply and suggested that the name “Dreamliner” was appropriate. To make the plane more fuel efficient, the 7E7 would be the first commercial aircraft built primarily with carbon-reinforced material, which was both stronger and lighter than the traditional aluminum. In addition, Boeing promised greater fuel efficiency by using a more efficient engine. Boeing claimed that the use of composites would also reduce its manufacturing costs. The goal would be to design a plane with fewer components that could be assembled in 3 days as opposed to the current 20 days that it took to rivet together the Boeing 767. The use of composite materials, however, had its risk. Composite materials were suspected as a contributory cause to a 2001 plane crash in New York and, therefore, would have to overcome regulatory scrutiny. Boeing would also have to change its production methods radically. The last time Boeing made a major production change was in 1997 in an effort to cut costs. However, because the process was not smooth, it resulted in two production lines being shut down for 30 days and hundreds of missed airline deliveries
The ability to produce a short and long distance aircraft would also have to overcome engineering obstructions. Analysts argued that building a plane that would do short hops in Asia and long trans-Atlantic flights would require two versions of the plane with different wingspans.4 Boeing engineers considered the possibility of snap-on wing extensions The question was whether this would be too costly, as well as being technically feasible.
Finally, there was the matter of Boeing’s board. Two of the most powerful members of the 11-person board, Harry Stonecipher and John McDonnell, were rumored to have raised serious concerns regarding the cost of the 7E7. While the cost of developing the 7E7 project could be as high as $10 billion, there was an imminent veto threat if that number did not shrink by billions. More specifically the board wanted to keep 7E7 development costs down to only 40% of what it took to develop the 777. An additional pressure from the board was to keep the 7E7 per-copy costs to only 60% of the 777 costs. In response, Philip Condit, Boeing’s CEO and chair, was quoted as saying that “Boeing has a responsibility to develop jetliners for less.”5 He knew, however, that if Boeing did not take bold risks in the commercial-aircraft industry that their days as a serious competitor to Airbus were numbered.