is Boeing Going?
Part 3 : Boeing in Decline - the
1970s to 2003
Boeing partially built
two prototype SSTs, but when government funding dried up,
Boeing chose not to risk any of its own money and killed
this futuristic project.
3 of a 5 part series - click for Parts
In some companies, success
encourages continued innovation. In others, past success freezes
a company into following the strategies that initially created
its success, long after the marketplace and technologies have
changed, causing the company to drop behind the rest of the
In the early 1950s, Boeing was
failing at producing commercial airplanes. It became
aggressively innovative, and produced four outstanding airplane
designs in little more than ten years - the 707, 727, 737 and
But what did Boeing then do to
protect its market leadership? Critics would suggest it became
complacent and conservative, and lost its leadership as a
From Dominating to Dominated
The 707 first flew in
commercial service in 1957. Seven years later, it was joined by
the 727. Four years after that, the 737 was added (in 1968) and
two years after that, the 747.
But then, no new planes at
all were released during the 1970s, while Boeing sat back and
enjoyed the feeling of unchallenged supremacy that its four
different model jets gave it.
Indeed, twelve years were to
pass before the first commercial flights of the 767 and 757 (two
airplanes built contemporaneously) and another twelve years
until the 777 commenced service in 1995. At the very earliest,
it will be thirteen more years from then until the first
commercial flight of the 7E7 (now named the 787).
The pace of development of
new model planes drastically slowed since the heady days of the
1950s and 1960s.
In the years since 1983
Boeing has released only one new model plane. During the same
period, Airbus has released three (the A320 then A340 then A330)
and will be releasing its revolutionary super-jumbo A380 in two
more years time.
Quite simply, Boeing has
been falling behind the development curve, while Airbus has
actively developed its aircraft lineup and now has comparable or
superior planes to match or beat everything in the Boeing range.
At present, Boeing only has
two passenger plane series that are realistically still selling
- the 737 and the 777. The 757 has recently been discontinued,
the 767 is, alas, on its last legs and hardly selling at all,
and similarly, sales of passenger versions of the 747 have all
but ended (as of April, 2006, there have been no sales of a
passenger model 747 since Nov, 2002).
How did Boeing end up this
way? The story continues with the development of another great
plane, the 767.
Another Great Plane
As the 1970s passed,
Boeing's designs became increasingly old and due for
replacement. The venerable 707 was taken out of production in
1978, and the 727 was to be retired in 1984. This would leave
Boeing with only two types of plane - the high capacity long
range 747, and the low capacity short range 737. Boeing needed
to add a medium capacity long range and a medium capacity short
range plane to replace, respectively, the 707 and the 727 that
had previously filled these market segments.
As a 707 replacement, Boeing
developed the 767, using an all-new and innovative design. It
was to have only two engines, which would be the first time that
a long range (and over-water) plane would be sold with only two
engines. Until the 767, it was unheard of to cross the Atlantic
with just two engines, but by the year 2000, the 767 was
crossing the Atlantic more than any other airplane type.
Another innovation (for
Boeing) was using electronic multi-function cockpit displays
instead of the earlier dials and gauges. The cockpit was
designed for a two pilot crew - a concept introduced in the
short range 737 and now extended to the long range 767 as well,
although not without initial resistance from pilots!
Most noticeable from a
passenger point of view was its cabin interior. It was a dual
aisle or widebody plane, with coach class seating of 2-3-2.
Everyone had either an aisle seat or a seat next to an aisle,
and loading and unloading the plane was much easier with the two
aisles. The 767 was a comfortable plane and justifiably very
popular with passengers.
A Dangerous Idea?
Boeing decided to design two
new planes at the same time - the 767 and the 757, and to give
them similar cockpit layouts so as to make it easy for pilots to
convert from flying one type of plane to the other.
This concept of a related
family of airplane types was of course intended to lock airlines
into buying all their planes from a single supplier (ie Boeing),
and while it was successful at doing this it also created a
subtle trap for Boeing. An airline would choose Boeing's best
planes in preference to other manufacturers, and then would
hopefully be locked into buying all other planes it needed, also
from Boeing, even if some of these plane types, when compared
individually, were not as good as other planes from other
Perhaps this meant that
Boeing no longer needed to design every plane to be as good as,
or better than, all competing planes from all competing
suppliers. Perhaps this good idea backfired on Boeing.
Success changed the company
from aggressive innovators to conservative maintainers - eg, the
glass cockpit (all electronic displays), introduced by Airbus in
1978 but which took Boeing more than ten years to copy, and
fly-by-wire, introduced by Airbus in 1984 with the A320 and
taking Boeing five years to emulate.
And a Not so Great Plane
The 757, developed at the
same time as the 767, was larger than the 727 it replaced, with
214-239 seats in a one class configuration, compared to 189 in
the 727-200. However, it was built with the same fuselage
cross-section as the 727, the 737, and the 707, with three seats
on either side of a center aisle. This gave the 757 the dubious
distinction of being the longest narrow-bodied plane in the sky
(some would say it was too long for a single aisle plane), and
with larger models holding as many as 289 passengers, the
congestion and delays in loading/unloading were appreciable.
The plane was never very
popular with passengers, but it was popular with airlines, being
very efficient and economical to operate (something that is
generally considered by airlines to be much more important than
passenger comfort!). Some people consider the 757 to represent
the absolutely worst modern passenger plane design.
Passenger comfort issues
have perhaps become more prominent in the last decade or so, and
Airbus have strongly sold their planes as being more comfortable
- more spacious - than Boeing planes. Their narrow body planes
have 7½" more width than on Boeing narrow bodies, and their
widebodies have 2-4-2 seating - not quite as good as the 767's
2-3-2 but definitely preferable to the 747's 3-4-3 or the 777's
2-5-2 layout. No-one is more than one seat from an aisle on an
Airbus widebody, but two of every ten people are two seats from
an aisle on a 747 and similarly one of every nine on a 777.
Initial sales of the 757
were slow, perhaps because the plane was just too big for most
airlines and the routes they operated. But with the steady
growth in passenger numbers, the need for higher capacity planes
increased and the 757 became increasingly popular in the later
1980s and early 1990s.
The Death of Courageous
Boeing likes to claim that
it 'bet the company' on the success of its 707 and 747 planes,
and points to these events as examples of its courageous
Whether these statements are
true or not (and both projects were greatly encouraged by
military contracts), no-one can dispute that, since the 747
project in the mid 1960s, Boeing has never since made a major
financial gamble on a revolutionary new plane :
It chose not to gamble on a
competitor to Concorde, its 2707 SST.
It chose not to develop the
747X - a super-jumbo successor to the 747.
It chose not to develop the
slightly faster than normal Sonic Cruiser.
Great Planes that Never
Happened : The Boeing 2707 SST
In the early 1960s, it
seemed aviation and airplanes would continue to develop
into the future, the same as they had done in the 60 years
before. The logical area of improvement was in the realm of
speed - early jets in the 1950s flew twice as fast as the
propeller powered planes they replaced; and now the expectation
was to double (or more) the speed again. This new increase in
speed would mean exceeding the speed of sound (about 660 mph),
which brought about unique new design challenges. Full of
confidence, aircraft builders in Britain, Europe, the Soviet
Union and the USA all set about designing supersonic transports
Best known today is the
project to develop the Concorde, started in 1962. But at the
same time that the British and French were pursuing their plans
for a plane that would fly at more than twice the speed of sound
(ie 1350 mph, Mach 2.04) and carry 100 passengers 3700 miles,
American companies also began to pursue designs for a bigger
National pride was involved
in such a prestigious undertaking, and a Congressional Committee
studied America's needs and how to develop such a plane. It was
decided that the FAA would coordinate the program, with
assistance from NASA and the Dept of Defense. A 1961 report
projected sales of 100-200 SSTs, with government funding much of
the development costs, and these investments to be repaid in the
form of a royalty on each plane sold.
The FAA coordinated a
national design competition for the best plane, and before it
had even selected a design winner, it started selling $100,000
options on future planes to the airlines, with 45 orders being
received within a few months of the options going on sale in
1963. The design competition was to close in 1964, but
specifications and requirements were repeatedly revised and the
final results were not announced until 1967. The US was falling
further and further behind the Concorde and Russian Tu-144
Six companies submitted
designs. Boeing won the competition, with a proposal for a
swing-wing plane that would carry 300 passengers for 4400 miles
at 1800 mph, what it called the Boeing 2707.
The US Government's funding
for the project was never very certain, and environmental groups
were lobbying strongly for the project to be cancelled
completely. Meanwhile, Boeing's swing-wing design proved
impractical, and its revised fixed wing design did not offer the
same high performance as its earlier proposal.
Eventually, in 1971 funding
was cancelled for the program. Some $1 billion had already been
spent on the project (by the government), and although two
prototype planes were already partially built, when the
government withdrew its financial support, Boeing gave up on the
project also. Any chance of a US supersonic plane was lost.
Competition Ebbs and Flows
In the 1960s, Boeing had two
main competitors - McDonnell Douglas and Lockheed.
Lockheed never successfully
transitioned from propeller planes to jets. It only made one
passenger jet - its L1011, a three engined plane similar in
appearance to the DC-10. Only 250 were produced, and the end of
its production, in 1984, also marked the end of Lockheed's 55
years as a passenger airplane manufacturer.
The Douglas Aircraft Company
had always been a strong competitor to Boeing. Its DC-1, -2 and
-3 effectively killed the Boeing 247 program. Its DC-7 was the
most successful plane in the 1950s. Its DC-9 was introduced two
years before Boeing's 737, and enjoyed an early 'first to
market' advantage. In 1967 Douglas merged with McDonnell
Aircraft Company to form McDonnell-Douglas. Future planes were
prefixed MD rather than DC.
The DC-10, developed prior
to the merger, but released after it was completed, was a good
plane, but suffered some bad publicity due to accidents that
weren't entirely plane related, and in general it was eclipsed
by the 747. The DC-9 program, renamed the MD-80 program, was
eclipsed by the larger 737s. A successor to the DC-10, the
slightly larger MD-11, sold very disappointingly - only about
200 were produced over the course of ten years.
In 1997, Boeing merged with
McDonnell Douglas, meaning that it now had no remaining North
American passenger jet competitors. But, increasingly over the
previous decade, Boeing's main competitive threat was from
France rather than from within the US.
The Rise and Rise of Airbus
Airbus appeared on the scene
in 1969, as a merger of several individually failing European
airlines. To start with, it gave no indication of being any more
successful than the companies that merged together to create the
new organization. Its first plane, the A300, sold poorly; and by
the end of 1975 it had only sold 55 planes. It then went 16
months without a single sale, and then finally it won the
breakthrough it needed - an order from Eastern Airlines in the
US, and by 1979, it had orders for 256 planes, and its future
Airbus continued a
relentless program of new airplane investment, and also greatly
improved its original A300 (which is still selling today in its
latest form). Boeing chose first to ignore Airbus, and then to
denigrate it. Boeing officials would sneer about Airbus and also
said that Airbus was forced to 'give away' planes at prices that
Boeing didn't want to match. In other words, Boeing treated
Airbus much the way that full fare airlines treated their lower
While the pace of innovation
at Boeing slowed more and more, it seemed to be accelerating at
Airbus, and its planes started to take over records from Boeing
(eg the longest plane, and the plane with the greatest range).
Freed from a design legacy stretching back to the 1950s, all
Airbus planes were built to state of the art specifications,
using state of the art techniques and materials.
Airbus built up a
comprehensive 'family' of planes, ranging from smallest A318
(117 seats in an all coach configuration, comparable to Boeing's
unsuccessful reworked MD-90, now known as the B717) up to the
largest A340-600, carrying almost as many passengers as a 747,
and of course the soon to be launched massive A380 which will be
by far the largest plane in the skies.
As Airbus' product range and
credibility grew, so too did its order book and deliveries. In
2001, Boeing delivered almost twice as many planes as Airbus. In
2002 Airbus delivered almost as many planes as Boeing; and in
2003 it delivered substantially more planes than Boeing (305
compared to 281). Airbus' advantage continued in 2004 and
2005, and looks probable to continue in 2006 as well. - see the
data in part five of this series.
Boeing is no longer the
largest passenger aircraft manufacturer. That title now belongs
The Danger of Success
Boeing's most successful and
most profitable plane is almost certainly its 747. For 25 years
it reigned supreme as the biggest plane in the skies, and it had
no competitors. But this success carried with it a subtle cost
and handicap that Airbus was quick to exploit, turning the
tables on Boeing in the process.
In part four - how
Boeing tricked itself into losing supremacy, and what it should
do to reclaim market leadership.
Read more in the rest of this
five part series
Part 1 : Boeing's early
Part 2 : Boeing's best
Part 3 : Boeing in decline
Part 4 : Does Boeing have
Part 5 : Key facts and
figures about Boeing, its planes, and its competition
If you liked this, you might also enjoy our multi-part series 'Airbus
Fires the First Shot in the New A320/737 War with Boeing'.
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19 Dec 2003, last update
20 Jul 2020
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