Boeing’s new jet

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It’s no iPhone, but Boeing’s new jet still drew a big crowd when it was unveiled this weekend. Compared with Apple’s hype-machine, though, Boeing’s approach with its latest baby, the 787 Dreamliner, looks pretty low-key. In particular, some question Boeing’s decision to put off raising forecast production, in spite of that meaning capacity is now, in effect, sold out until 2014.

Yet the approach is sensible. A decade ago, a cockier Boeing ramped up production so fast that it left its own suppliers trailing. That is not smart when even your simplest products rely on the assembly of hundreds of thousands of separate parts. In the fallout that hit the airline sector after 2001, Boeing also learned how dramatically the industry cycle could turn. That downturn changed the industry, with suppliers imploding having expanded capacity ahead of the slump. A direct consequence of that is the current shortage of fasteners for the 787.

Add that to the use of composite materials in the 787 and the scale of what Boeing is attempting is clear. It is unleashing an untried technology on a supply chain that has changed dramatically. On that basis, underpromising with the potential to open another production line if all goes well is sensible.

Boeing must also have its eye on problems at arch-rival Airbus. There, the journey from euphoria to despair over the European aircraftmaker’s finances and governance was exceedingly short. The temptation for Boeing was surely to go for broke while its competitor was in disarray. Yet that would risk compromising its own ability to deliver and overextending itself at what looks like a high point for the industry. Instead, Boeing can take comfort in the fact that Airbus will take some time yet to fix itself and, with plans to outsource more of its own production, also recognises that the game has changed.

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