art
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Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 9:50 am

I hear many reports that the 787 development cost is $2 billion or so less than the A350XWB development cost. I am a little mystified that the development cost of a revolutionary design such as the 787 is lower than the projected development cost of the more conventional A350XWB.

Can anyone explain why this should be so?

[Edited 2007-01-21 01:53:34]
 
EMBQA
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 9:53 am

Quoting Art (Thread starter):

Can anyone explain why this should be so?

Because Airbus screwed up their first design of the A350 and they're starting from scratch again.
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RichardPrice
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 9:55 am

A lot of the development of the 787 is based on prior R&D programs such as the Sonic Cruiser - the composite barrel production method for example was billed to the Sonic Cruiser development and as such is sunk cost already accounted for on Boeings bottom line.
 
mrcomet
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 9:58 am

French workers vs. American.  Wink

Just kidding (mostly). It's also because Boeing has worked hard to speed up their development time so less time equals less money.

It was never clear whether the Boeing number was for just Boeing or for all their suppliers.
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Stealthz
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 10:46 am

There is also the not so inconsiderable detail that much of the development work for the B787 was done in 2000-2007 Dollars and much of the A350 is being paid for with 2007-20xx Euros.
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NAV20
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 10:58 am

Quoting RichardPrice (Reply 2):
A lot of the development of the 787 is based on prior R&D programs such as the Sonic Cruiser

I think that's dead right. One gets the impression that Boeing's R & D has always been pretty coordinated, and based on clear ideas about the directions in which the market is likely to move and aircraft design needs to develop. So that even if they do take a wrong turning like the Sonic Cruiser, the work isn't entirely wasted.
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redflyer
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 1:08 pm

It could also be that some of the development costs have been incurred by some of the sub-contractors who are building major components.
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Dougloid
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 3:06 pm

Quoting RedFlyer (Reply 8):
It could also be that some of the development costs have been incurred by some of the sub-contractors who are building major components.

Well, Delavan a/k/a Goodrich spent an awful lot of money getting its fuel distribution stuff placed on the big Trent...

and thereby hangs a tale.

The airplane turbine engine fuel nozzle business resembles Orwell's world of 1984. There are three manufacturers in a state of perpetual warfare, the market's pretty sells sewed up between them, and they control about eighty pre cent of the world market.

It's not as easy as it seems, getting your product certified as the oem product on somebody's engine, and there are a lot of dollars moving behind the scenes. Whether your product is the best or the least expensive is not at all important. It's your connection with the engine manufacturer and the ability to design and furnish the product that makes the sale.

Historically, Delavan, Parker Hannifin and Woodward FST which was the old FST and before that Ex-cell-0 Machine and Tool Company. Delavan had the JT3C and D and the military variants but they never landed another airliner engine for a long time. They did have the PT6 and the TPE331, and the PT6 is hugely popular. Parker Hannifin had an in with General Electric but they shared some GE and P&W Canada programs with Delavan. FST was strictly a 'make to print' shop, their major customer was Pratt & Whitney, and they didn't own the designs-Pratt did. Their big program was the JT8, but that's been unwinding for the last ten years or so. Back in 2001, FST was starting to get desperate for new business.

Although Delavan was doing well, they wanted to get placed on a big airliner engine, and they did it....they got the RB211 and now the big Trent.

So one day my boss hands me a spreadsheet, it's the budget for the marketing department, and he tells me to figure it out. I know doodly about finance but I'm willing, right?

So I see about 1.5 million in red ink associated with the RB211 program and I go to see the CFO and ask him about this, just to get informed and he tells me "Oh....that's the RB211 program. We lose $1,250 on each nozzle we make and sell to Rolls."

But the other side of it is, as they build installed base, they build a market for service and something else: it's called piece parts, and these are proprietary small parts necessary to overhaul the product that they don't sell to anyone.

When I was there in 2001 the USAF bought several million bucks worth of J57 parts and had us ship them off to FST who'd bid the work cheaper than Delavan would. That's an installed base, friends. The J57 has been a cash cow for Delavan for centuries and as long as there are KC135s flying they'll be buying parts.

There WAS a gentleman's agreement not to reverse engineer a competitor's product, although Delavan had reverse engineered a Parker Hannifin fuel nozzle for the GE CT7 through proof of concept then never took it any farther. If any of them pursued reverse engineering and broke the agreement it would have been FST.

There was also a process of vertical integration going on. Delavan and Chandler-Evans were part of Goodrich. Woodward wanted the fuel nozzle capability and bought FST from Textron, and P-H had some fuel control business with GE.

So who knows what Delavan ended up paying to get their stuff on the Trent...
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flydreamliner
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 3:59 pm

a few thoughts.

first off, any development at airbus will be more expensive than at boeing at the moment because the euro is way stronger than the dollar - airbus is shelling out more to get their work done over there.

secondly, this is like, the 4th attempt at designing the A350 airbus has gone through, they did spend money on the first 3 and that money is gone.

while boeing subcontracted a lot out, so did airbus. as for talk of 787 costing less due to soniccruiser, some of the composite technology was developed for sonic cruiser, but that was merely re-adapting existing technology boeing used on aircraft like the osprey and F-22.

development costs in general tend to run higher at airbus - but there are very different corporate cultures. airbus keeps a larger staff generally speaking.

If you'll look at the program cost differences between 772LR/773ER and A340-600/A340-500, you will find that for these comperable stretch programs, Airbus spent significantly more.

but those are just a few thoughts, i don't think it is any one thing.
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manni
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 4:07 pm

Quoting Art (Thread starter):
I hear many reports that the 787 development cost is $2 billion or so less than the A350XWB development cost.

Is that US$8 billion and US$10 billion you had in mind? IIRC Boeing recently upped the amount to be spended on the 787 with a few hundred million US$.

A second point I'd like to add is that it might be partially atributed to the 5 versions Airbus (A358, A359, A350-1000, A350R and A350F) is planning compared to the initial 3 version Boeing is planning (783, 788, 789)
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N328KF
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 4:18 pm

Quoting Manni (Reply 11):
Is that US$8 billion and US$10 billion you had in mind? IIRC Boeing recently upped the amount to be spended on the 787 with a few hundred million US$.

The line that came out said that the 787 was under what was budgeted, but over internal projections. Sounds sort of like the weight issue.
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manni
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 4:38 pm

Quoting N328KF (Reply 12):
The line that came out said that the 787 was under what was budgeted, but over internal projections. Sounds sort of like the weight issue.


Thank you. So what was the US$8 billion, budgeted or internal projections? I suppose the US$8 billion was budgeted. In the case the extra expense they announced will not exceed the budgeted US$8 billion, why the announcement?
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lightsaber
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 4:44 pm

Quoting Dougloid (Reply 9):
So who knows what Delavan ended up paying to get their stuff on the Trent...

Interesting story.

However, I've seen the allowed budget for some new built injectors. I've designed a few for Pratt. They're so much simpler than the older injectors, produce a finer spray, have great "burn allowances", larger orifices (less chance of clogging), inner and out recirculation zones, etc.

Oh yea... that's one part of my job for many years.  Smile

As to the 787 being cheaper to develop than the A350... I could only speculate. However, the fact that Airbus is more political than Boeing must increase the costs. All else being equal, the less political organization can develop the same product for 1/3rd the cost of a "fully loaded" political organization. Now, I'm not saying Boeing is apolitical... they just don't have to negotiate who does what. E.g., for the 748 I know Boeing has grabbed a whole bunch of Wyle structural engineers. They do what is required to meet schedule. If the job is done in October and the next stage starts in January... the Wyle guys are sent home (minimizing costs). However, they're paid well enough to abosorb short times without pay.

Not to mention the time cost of money. Boeing will work teams 50+ hours a week to meet schedule.

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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 5:01 pm

Quoting Manni (Reply 13):
Thank you. So what was the US$8 billion, budgeted or internal projections? I suppose the US$8 billion was budgeted. In the case the extra expense they announced will not exceed the budgeted US$8 billion, why the announcement?

As an NYSE-registered company, it must report stuff like this to shareholders. Also, probably rumor-quashing, and they're afraid of getting nailed by critics, a la EADS and the A380.

Anyhow, I believe the $8bil figure was "budgeted," but also rounded to the nearest billion, at least in the press.

I should receive my BCA annual report in the mail shortly. Hopefully, they will go over the cost increases there.

[Edited 2007-01-21 09:03:45]
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atmx2000
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 5:09 pm

Quoting StealthZ (Reply 4):
There is also the not so inconsiderable detail that much of the development work for the B787 was done in 2000-2007 Dollars and much of the A350 is being paid for with 2007-20xx Euros.



Quoting FlyDreamliner (Reply 10):
first off, any development at airbus will be more expensive than at boeing at the moment because the euro is way stronger than the dollar - airbus is shelling out more to get their work done over there.

It's not way stronger. It's no more than 10% stronger than the long term average exchange rate. The dollar was a much, much stronger in relation to the Euro from 2000-2002 than the Euro is currently against the dollar.

Quoting FlyDreamliner (Reply 10):
If you'll look at the program cost differences between 772LR/773ER and A340-600/A340-500, you will find that for these comperable stretch programs, Airbus spent significantly more.

But the 777LR wasn't a stretch program as the 773A already existed.

Quoting Manni (Reply 11):
A second point I'd like to add is that it might be partially atributed to the 5 versions Airbus (A358, A359, A350-1000, A350R and A350F) is planning compared to the initial 3 version Boeing is planning (783, 788, 789)

I'd call it about 4 programs. The A350R/A350F development costs should be low like the 772LR/777F.
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JayinKitsap
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 5:32 pm

Using one Catia version is cheaper than using two?

Actually, Boeing has developed and used on previous planes a suite of design software to produce planes. Having a fully functional system like that saves so much effort.

Airbus to date still doesn't have a complete system for design, but several pieces being used side by side. This came untangled in a big way on the 380. So part (possibly up to 10%) is either investing in the program to develop those tools or doing work arounds to sync the design.

As long as you don't incur acceleration costs from say extensive overtime or overmanning, the time value of money saves a lot. If you can bring a $10B program to completion 1 year early, that saves about $ 800M.
 
baron95
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 6:10 pm

Quoting Art (Thread starter):
Can anyone explain why this should be so?

Lets count the ways...

1 - 787 development in US$, A380 in Euros/Eurozone (currency/location costs).
2 - 787 development in 4.5 years, A350 development in 6+ years (cost of money)
3 - 787 development done on Boeing's terms (time to plan select suppliers, etc), A350 development done as a forced/rushed response.
4 - 787 design gotten mostly right the first time, A350 design gotten mostly wrong several times.
5 - Boeing secured/locked A LOT of the production capacity for critical materials (like Titanium) under long term contracts, A350 will go spot. This may show more as production costs, but also aftects development costs some.
6 - Greater use of subcontracting and risk sharing partners on 787 program than anticipated at A350 program.
7 - Major integrated research, design and development done at a single site for 787, vs several competing countries/design centers for A350.
8 - Decisons made by one professional board, one chairman/CEO etc for 787 and by several politically appointed boards, co-chairman, co-CEOs, etc for A350.
9 - Optmised division of labor for 787 vs politically motivated division of labor for A350.
10 - Really nasty, probing shareholders for Boeing demanding near perfect execution, vs government holdings and other restrictive ownership for EADS/Airbus. (Can you buy a share of Airbus stock? No. How many different classes of stock does Airbus have?)
11 - Third generation/family of long haul twin-engine airliner for Boeing (following the 767ERs, 777s), only second for Airbus (following the A330).
12 - Longer experience with large composite fuselages (B2, Sonic Cruiser, etc) for Boeing, then at Airbus (A400 ?).
13 - Better credit rating for Boeing than EADS (lower cost of borrowing).
14 - Positive cash flow on hand during development years (self finance) vs negative cashflow at Airbus (due to A380 fiasco) requiring more borrowing.
15 - More flexibility at Boeing to grow/shrink workforce as needed for design/certification bump.
16 - Less stress on resources at Boeing (777LWF mostly done, 747-8 modest redesign) than Airbus (A380 impact, A400, A330F).

Well you get the picture. While some of these items may or may not be significant, in the agregate they present a start contrast between the two programs.
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ebbuk
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 7:01 pm

Quoting Baron95 (Reply 18):

4 - 787 design gotten mostly right the first time, A350 design gotten mostly wrong several times.

Not if you include the ill-fated Sonic Cruiser from whence the 787 came. Include the costs of that folly as you do for the previous 350 designs, think both will even out.

Quoting Baron95 (Reply 18):
10 - Really nasty, probing shareholders for Boeing demanding near perfect execution, vs government holdings and other restrictive ownership for EADS/Airbus. (Can you buy a share of Airbus stock? No. How many different classes of stock does Airbus have?)

Think you need to counter this point with the fact that both manufacturers have governments on hand to back them at every step of the way should they get into trouble.

Some of your other points are a tad emotive yet wholly consistent with a.net mindset (not worth my time repeating)
 
mrcomet
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 7:33 pm

Quoting EbbUK (Reply 19):
Think you need to counter this point with the fact that both manufacturers have governments on hand to back them at every step of the way should they get into trouble.

Ha! You obviously haven't worked with governments much.

I doubt either company can rely on direct government assistance if they get in trouble. Airbus has a better chance -- it may get loans but as we have seen even that is big bureacratic and political trouble.

Boeing gets their support indirectly -- research contracts, etc. It's very unlikely they'd get any help -- every company in America would howl as would most citizens. It's illegal in the US unless congress acts and I doubt they'd act to help Boeing directly. Indirect assistance through more contracts isn't very efficient and they still have to do the work. It's not much help if you are in trouble.

Governments may help in long term. Short term they are on their own.
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andessmf
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 7:39 pm

Quoting Lightsaber (Reply 14):
Boeing will work teams 50+ hours a week to meet schedule.

It is very rare for any engineer NOT to work overtime.
 
Rheinbote
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 8:38 pm

Quoting Baron95 (Reply 18):
Lets count the ways...

Excellent compilation, Baron95.

I think closing the gap in IT infrastructure may be allocated to A350 R&D as well.

Different accounting schemes paly a role as well. Don't forget Phantom Works and other dedicated technology R&D divisions within Boeing who are contributing to the 787 program from their own budgets.

I certainly don't want to start another obnoxiously boring 'subsidies' mud-fight. But as a matter of fact, there has been quite a lot of NASA/DoD funded research on composite materials qualification, design evaluation and affordable manufacturing processes during the past 20 years or so, providing Boeing with a tremendous head-start. Nothing wrong with that. IMO that's exactly the role government-funded research has to fulfil. Unfortunately, Euroland could never orchestrate anything coming anywhere near in breadth and depth. Airbus will have to foot a large part of the bill now to catch up.

Shouldn't distract from the points Baron95 and others have raised, though.

[Edited 2007-01-21 12:42:30]
 
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breiz
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 8:46 pm

Quoting Baron95 (Reply 18):
10 - Really nasty, probing shareholders for Boeing demanding near perfect execution, vs government holdings and other restrictive ownership for EADS/Airbus. (Can you buy a share of Airbus stock? No. How many different classes of stock does Airbus have?)

Airbus being a 100% subsidiary of EADS, it is obvious you cannot buy any share of it. However you may buy EADS shares.
The financial/organisational comparison between Boeing and Airbus is not entirely correct.
Boeing as a whole should be compared to EADS while Airbus should be compared to Boeing Commercial Airplanes Division.
Otherwise, you made a pretty good review.
 
Rj111
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 8:57 pm

Quoting FlyDreamliner (Reply 10):
If you'll look at the program cost differences between 772LR/773ER and A340-600/A340-500, you will find that for these comperable stretch programs, Airbus spent significantly more.

The two aren't comparable. Fundamentally...

The A340-500/600 got a vastly modified wing, a major stretch and completely different engines.

The 777LR program was just a MTOW increase thanks largerly to a more powerful version of the same engine.
 
Rheinbote
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 9:44 pm

Quoting EbbUK (Reply 19):
...the ill-fated Sonic Cruiser from whence the 787 came. Include the costs of that folly...

Evaluating 'follies' in early design avoids getting bogged down with the same or even more serious follies during detailed design, which is much more expensive. Actually, that's another reason why Boeing R&D may be lower than Airbus R&D. "They always seem to do the right thing - after they tried everything else". Try everything, but try it while it's cheap.
 
EI321
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 9:58 pm

Quoting Baron95 (Reply 18):
1 - 787 development in US$, A380 in Euros/Eurozone (currency/location costs).

Absolutly Correct!

Quoting Baron95 (Reply 18):
2 - 787 development in 4.5 years, A350 development in 6+ years (cost of money)

The 787 will be developed in 4.5 yrs, but some of the development in aspects like the Carbon fuselage was spent on the sonic cruiser, saving some costs in from the dreamliner.

Quoting Baron95 (Reply 18):
3 - 787 development done on Boeing's terms (time to plan select suppliers, etc), A350 development done as a forced/rushed response.

Dont completly understand this. Airbus is not able to select what suppliers they want?

Quoting Baron95 (Reply 18):
4 - 787 design gotten mostly right the first time, A350 design gotten mostly wrong several times.

But that has nothing to do with the current A350 budget. Money spent on the original A350 is not accounted in the new $12B budget as far as I know, maybe someone can clarify.
 
EI321
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 10:17 pm

Quoting Baron95 (Reply 18):
- Boeing secured/locked A LOT of the production capacity for critical materials (like Titanium) under long term contracts, A350 will go spot. This may show more as production costs, but also aftects development costs some.

Possibly, not sure I understand your saying - 'A350 will go spot'??

Quoting Baron95 (Reply 18):
6 - Greater use of subcontracting and risk sharing partners on 787 program than anticipated at A350 program.


Correct. Does the Boeing figure include the japanese subsidies? Another possible reason for the 787 costing less to develop might be tax incentives?

Quoting Baron95 (Reply 18):
7 - Major integrated research, design and development done at a single site for 787, vs several competing countries/design centers for A350.

Possibly, not sure how many R & D sites Airbus & Boeing have.

Quoting Baron95 (Reply 18):
8 - Decisons made by one professional board, one chairman/CEO etc for 787 and by several politically appointed boards, co-chairman, co-CEOs, etc for A350.

Which would tend to lead to a clash of intentions at Airbus.

Quoting Baron95 (Reply 18):
9 - Optmised division of labor for 787 vs politically motivated division of labor for A350.

Isnt Airbus' division of labour more on the manufacturing side than the development side?

Quoting Baron95 (Reply 18):
10 - Really nasty, probing shareholders for Boeing demanding near perfect execution, vs government holdings and other restrictive ownership for EADS/Airbus. (Can you buy a share of Airbus stock? No. How many different classes of stock does Airbus have?)

Do you think EADS shareholder dont pay attention to what happens at airbus?

Quoting Baron95 (Reply 18):
11 - Third generation/family of long haul twin-engine airliner for Boeing (following the 767ERs, 777s), only second for Airbus (following the A330).

Er you are forgeting the first l/h twin, the A300! Airbus has actually been making them longer!

Quoting Baron95 (Reply 18):
12 - Longer experience with large composite fuselages (B2, Sonic Cruiser, etc) for Boeing, then at Airbus (A400 ?).

The B2 is a completly different kettle of fish!

Quoting Baron95 (Reply 18):
13 - Better credit rating for Boeing than EADS (lower cost of borrowing).

Is this just pure speculation or have you anything to support it?

Quoting Baron95 (Reply 18):
14 - Positive cash flow on hand during development years (self finance) vs negative cashflow at Airbus (due to A380 fiasco) requiring more borrowing.

Is this just pure speculation? Airbus cashflow will be negative until 2012?

Quoting Baron95 (Reply 18):
15 - More flexibility at Boeing to grow/shrink workforce as needed for design/certification bump.

Correct, Airbus is much more tied up at the moment.

Quoting Baron95 (Reply 18):
16 - Less stress on resources at Boeing (777LWF mostly done, 747-8 modest redesign) than Airbus (A380 impact, A400, A330F).

The A380 is mostly done also. Are airbus military engineers designers at the same location as Airbus engineers?
 
FlyMeToTheMoon
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 10:20 pm

The euro is worth $1.3, so there you go, 30% more right there.

Kidding... It comes down to the ability to draw on previous experience - which is either already paid for (e.g. 777) or sunk (sonic cruiser) - and to share the development cost and risk by using risk-sharing partners around the world.
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Rheinbote
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 10:22 pm

Quoting EI321 (Reply 25):
Possibly, not sure I understand your saying - 'A350 will go spot'??

Means buying limited-supply materials like Titanium on the spot market rather than through long-term negotiated contracts. Important because an increased need of Titanium goes along with an increase in the use of composites.
 
RichardPrice
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 10:24 pm

Also, I dont *think* this has been covered yet (just got up), but the 787 development cost as quoted is for the 787-3, 787-8 and 787-9, while the A350 costs are for the -800, -900-, -1000, ER models and the freighter. The 787-10 and additional models are not included.
 
NAV20
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 10:30 pm

Quoting Rheinbote (Reply 23):
Actually, that's another reason why Boeing R&D may be lower than Airbus R&D. "They always seem to do the right thing - after they tried everything else". Try everything, but try it while it's cheap.

Spot on, IMO, Rheinbote. You said what I was trying to say earlier, but said it better and shorter.

I personally doubt that the 787 had a 'development budget' as such. My guess is that it started out as an 'idea', management allocated a team to it, whether the team stayed in being or not depended on progress reviews. Progress was good, the idea became a design, the design became a project. Then, at some later time, the accountants, bless them, added up how much the '787 programme' had cost.

Contrast that with the A350XWB. It isn't an 'idea', it's a 'response'. The brief is not 'design a new kind of aeroplane', it is 'design something a bit bigger than the 787 and a bit smaller than the 777. Make it as light as possible, so that its performance is as close to those of the two Boeings as you can get. But we can't authorise you to go absolutely 'overboard' on composite construction, there simply isn't time to develop a whole new technology that we don't have at the moment, do the best you can with a combination of aluminium framing and composite panels......'

Then, of course, being Airbus, they had to think about 'launch aid' - which is claimed on the basis of a percentage of development cost. The design department said that development would take about five years, Airbus' development budget is about E2B. p.a., the 'estimated development cost' was therefore set at E10B.

Sorry to ramble on - but what I'm getting at is, the two figures simply aren't comparable, because the two companies are organised and run on fundamentally different lines. The 787 development cost is an 'out-turn' - the A350XWB development cost is an 'estimate.'
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Rheinbote
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 10:39 pm

Quoting EI321 (Reply 25):
The B2 is a completly different kettle of fish!

That's what many tend to believe. In fact, the 787 owes many processes and tools used in composite design & manufacturing to the B-2, the V-22, the F-22 and the X-32 JSF demonstrator.

Read this...
http://seattletimes.nwsource.com/htm...chnology/2001934727_statkus21.html
Just how differently became clearer yesterday in a wide-ranging interview with Frank Statkus, vice president of new technology, tools and processes for the 7E7.
Statkus worked most of his 32 years at Boeing on the defense side of the aviation business, most recently leading development on the company's bid for the Joint Strike Fighter (JSF) program, which it lost to Lockheed Martin in 2001.


...and this
http://www.bizjournals.com/seattle/s...2004/04/12/story4.html?t=printable
Statkus displays models of three versions of the Joint Strike Fighter behind his desk. He said the fighters were in many ways more of a direct antecedent of the processes being used to design and build 7E7 than those used for the 777.
"My job was to take what we learned there, and make sure we had it infused into the 7E7 program," he said about the JSF program.


Before leading JSF development, Statkus held very similar positions in the B-2 and F-22 programs...you can easily google that up by yourself.
 
bhmbaglock
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 11:03 pm

Quoting FlyDreamliner (Reply 8):
first off, any development at airbus will be more expensive than at boeing at the moment because the euro is way stronger than the dollar - airbus is shelling out more to get their work done over there.

This is one of the reasons they are expanding their presence in the US with the engineering center in Mobile that recently opened. Technically EADS but it's tough to really differentiate.

Quoting FlyDreamliner (Reply 8):
development costs in general tend to run higher at airbus - but there are very different corporate cultures. airbus keeps a larger staff generally speaking.

When I worked at Boeing during another major development project most groups were composed of 40-50% outside people. Some were career job shoppers but at the time (mid 80s), Cessna, Beech, and BMAC weren't doing very well and most of our supplemental head count came from loaners from these companies/organizations. It worked great for everybody, The other companies laid off fewer people and Boeing-Vertol didn't have to hire lots of permanent people who would then be gone in a few years.

Quoting EI321 (Reply 25):
Possibly, not sure I understand your saying - 'A350 will go spot'??

He means that Boeing has secured long term contracts for some limited supply commodities, i.e. titanium and composites. As a result, Airbus may have to buy signiificant portions of their needs on the more expensive spot market. While this is true, it hardly affects the development cost; it could have a major impact on the production cost of the first airframes until Airbus is able to secure similar contracts. Of course,it's also possible that lots of additional production capacity will be created and prices will go down and they will smell like a rose. In fact, there's a real good chance of this with composites but it's much less likely with titanium unless there's a major find in a country that's not smart enough to limit production to maintain high prices.
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astuteman
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 11:35 pm

Quoting Baron95 (Reply 16):
787 development in US$, A380 in Euros/Eurozone (currency/location costs).

A biggie  checkmark 

Quoting Baron95 (Reply 16):
787 development in 4.5 years, A350 development in 6+ years (cost of money)

Another biggie  checkmark 

Quoting Baron95 (Reply 16):
Third generation/family of long haul twin-engine airliner for Boeing (following the 767ERs, 777s), only second for Airbus (following the A330).

I have my suspicions that this is indeed relevant  checkmark 

Quoting Baron95 (Reply 16):
Less stress on resources at Boeing (777LWF mostly done, 747-8 modest redesign) than Airbus (A380 impact, A400, A330F).

Possibly the biggest. Resourse "desperation" can seriously dilute the skills and quality you're recruiting....  checkmark 

These 4 on their own could result in a marked difference in engineering value added. The rest of the list is pretty much windage.....

Quoting Rheinbote (Reply 20):
Different accounting schemes paly a role as well. Don't forget Phantom Works and other dedicated technology R&D divisions within Boeing who are contributing to the 787 program from their own budgets.

True indeed. I suspect we're not comparing like-for-like......

Quoting EI321 (Reply 25):
Possibly, not sure I understand your saying - 'A350 will go spot'??

He's inferring that Boeing have long-term, favourable rate supplies of Titanium lined up, but Airbus are going to have to scratch aorund for whatever deal they can get on the day (the "spot" rate).
This of course ignores the fact that Airbus have long-term titanium supply contracts in place too...........  Wink

Regards
 
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autothrust
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RE: Why Does 787 Cost Less To Develop Than A350?

Sun Jan 21, 2007 11:42 pm

Quoting Rheinbote (Reply 27):
Important because an increased need of Titanium goes along with an increase in the use of composites.



Quoting BHMBAGLOCK (Reply 31):
In fact, there's a real good chance of this with composites but it's much less likely with titanium unless there's a major find in a country that's not smart enough to limit production to maintain high prices.

It maybe not be very relevant at that time for the A350 but sure for future planes.

Quote:
Toulouse-based BTS Industrie is seeking €2 million ($2.57 million) to bring a water-based composite to market as quickly as possible. Describing the composite as a "technological breakthrough", BTS chairman Christian Bec says the material can replace titanium as its unique thermal stability properties mean it can be used in structures near the engine, such as nacelles, with significant weight savings.



Quote:

In June, Bec says, the new material was tested to 1,200e_SDgrC (2,192°F) for 15min - conventional composite materials typically have a 300°C limit. "The material did not budge an iota," he says. "Airbus had never seen anything like it before."

http://www.flightglobal.com/articles...t-dry-for-titanium-substitute.html

This could be a way to get away from titanium and rising costs for it. I guess Airbus will invest and pay more attention into this Material in the Future.
Any thoughts?

[Edited 2007-01-21 15:44:03]
“Faliure is not an option.”
 
jacobin777
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RE: Why Does 787 Cost Less To Develop Than A350?

Mon Jan 22, 2007 12:00 am

Quoting RJ111 (Reply 22):
The A340-500/600 got a vastly modified wing, a major stretch and completely different engines.

I'm curious how much the A345/A346 has cost Airbus and have they received a positive ROI... scratchchin 
"Up the Irons!"
 
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Scooter01
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RE: Why Does 787 Cost Less To Develop Than A350?

Mon Jan 22, 2007 12:33 am

From reading the previous 34 posts it seems that most of you feel like me;

Boeing has the most experience in designing aircraft and a better functioning management, thereby knowing what to do and HOW to get it done whereas the others still has to gain that experience.
As for development costs from outside suppliers, I feel like most of that should be covered by the supplier. -would you buy anything that was not proven? Unless you has asked the supplier for something to be developed specifically for you and you would own the patent for the next 25 years.

Scooter

[Edited 2007-01-21 16:35:27]
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Dougloid
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RE: Why Does 787 Cost Less To Develop Than A350?

Mon Jan 22, 2007 12:47 am

Quoting Lightsaber (Reply 12):
However, I've seen the allowed budget for some new built injectors. I've designed a few for Pratt.

There was a lot of development work going on with PAB nozzles at the time...they were having difficulty with high altitude restarts, though.
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
BoomBoom
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RE: Why Does 787 Cost Less To Develop Than A350?

Mon Jan 22, 2007 1:33 am

Quoting EbbUK (Reply 17):
Not if you include the ill-fated Sonic Cruiser from whence the 787 came. Include the costs of that folly as you do for the previous 350 designs, think both will even out.

How can it be considered folly when it led to the launch of the most successful airliner of all time, the 787.

What is folly was Airbus launching an A350 based on the A330, selling 100 copies then pulling the plug on it. How much cost is that going to add to the A350 program?
Our eyes are open, our eyes are open--wide, wide, wide...
 
bhmbaglock
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RE: Why Does 787 Cost Less To Develop Than A350?

Mon Jan 22, 2007 3:30 am

Quoting AutoThrust (Reply 33):
It maybe not be very relevant at that time for the A350 but sure for future planes.

I'm not trying to say that material costs are not relevant to actual program costs. My point is that materials cost are a neglible portion of the development cost which is the subject of this thread.
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Rheinbote
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RE: Why Does 787 Cost Less To Develop Than A350?

Mon Jan 22, 2007 3:44 am

Quoting Astuteman (Reply 32):
This of course ignores the fact that Airbus have long-term titanium supply contracts in place too...........

If you know this you certainly also know for how long they got along without such a contract  Wink
 
TeamAmerica
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RE: Why Does 787 Cost Less To Develop Than A350?

Mon Jan 22, 2007 4:19 am

Quoting FlyDreamliner (Reply 8):
but that was merely re-adapting existing technology boeing used on aircraft like the osprey and F-22.



Quoting Rheinbote (Reply 30):
That's what many tend to believe. In fact, the 787 owes many processes and tools used in composite design & manufacturing to the B-2, the V-22, the F-22

Two posters have cited the F-22 as a technology precursor for the 787. In what way exactly, given that the F-22 is a Lockheed product? As for the V-22 Osprey, that's a partnership with Bell, and I'm curious what technology from the tilt-rotor is relevant to the Dreamliner? Lastly the B-2...built by Northrop...is relevant to Boeing and the 787 in what way?

Some assumptions are being made based on chronology and staffing. People who worked on the B-2 certainly learned a lot about working with composites, but linking the development cost of the 787 to the stealth bomber is quite a leap. It's more a matter of the US side of the industry having a deeper and broader knowledge base. That is in large part due to experience with projects as cited above, but let's also give credit to the Beech Starship and Mr. Burt Rutan...it's not all on the military side. A huge element in the US advantage is R&D performed in partnership with NASA (a civilian agency) but this is usually overlooked when we get into these debates.
Failure is not an option; it's an outcome.
 
Morvious
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RE: Why Does 787 Cost Less To Develop Than A350?

Mon Jan 22, 2007 4:28 am

Everything is getting more expensive by the minute. So one of the reasons can be simple, the A350 is just a few years behind the B787.

I also think Boeing is better with calculating and planning stuff before building an airplane. It almost looks flawless from the outside. That alone can safe you a lot of money (The A380 and first A350 are a few examples).
have a good day, Stefan van Hierden
 
RichardPrice
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RE: Why Does 787 Cost Less To Develop Than A350?

Mon Jan 22, 2007 4:41 am

Quoting TeamAmerica (Reply 40):
Two posters have cited the F-22 as a technology precursor for the 787. In what way exactly, given that the F-22 is a Lockheed product?

From the Boeing website:

Quote:

Boeing, in Seattle, Wash., builds the Raptor's wings and aft-fuselage, and is responsible for avionics integration and test; 70 percent of mission software; the pilot and maintenance training systems; and the life-support and fire-protection systems.

http://boeing.com/defense-space/military/f22/index.html

Quoting TeamAmerica (Reply 40):
As for the V-22 Osprey, that's a partnership with Bell, and I'm curious what technology from the tilt-rotor is relevant to the Dreamliner?

From the Boeing website:

Quote:

Boeing is responsible for the fuselage and all subsystems, digital avionics, and fly-by-wire flight-control systems. Boeing partner Bell Helicopter Textron, Inc., is responsible for the wing, transmissions, empennage, rotor systems and engine installation.

http://boeing.com/rotorcraft/military/v22/index.htm

Quoting TeamAmerica (Reply 40):
Lastly the B-2...built by Northrop...is relevant to Boeing and the 787 in what way?

From the Boeing website:

Quote:

Boeing in Seattle is currently doing work on the B-2's smart bomb rack and SATCOM radio. Boeing previously provided the following components:

* Primary structural components -- the outboard wing and aft-center sections
* Fuel systems
* Weapons-delivery system
* Landing gear


http://boeing.com/defense-space/military/b2bomber/index.html

All of those projects has technology relevent to the 787 project, and would have given Boeing a lot of experience with those technologies.
 
bhmbaglock
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RE: Why Does 787 Cost Less To Develop Than A350?

Mon Jan 22, 2007 4:47 am

Quoting TeamAmerica (Reply 40):
Two posters have cited the F-22 as a technology precursor for the 787. In what way exactly, given that the F-22 is a Lockheed product? As for the V-22 Osprey, that's a partnership with Bell, and I'm curious what technology from the tilt-rotor is relevant to the Dreamliner?

I think I can answer this one as I did work for Boeing on the V-22 for a while. The V-22 is certainly not a stunning success in several ways but it did involve a lot of cutting edge composite technologies. During the early parts of the program, the two fuselage skin halfs were among the largest composite pieces ever fabricated. There is also some limited use of filament wound composites in the V-22(for that matter, new build D mod and up Chinooks as well).

Some of the relevant learning relates to things you don't want to do. The V-22 is in many ways built like a conventional aluminum aircraft but with composites, i.e. frames, stringers, and skin riveted together. The skin panels are much larger and the properties are a lot different but the assembly requires every bit as much, probably more, labor than conventional aluminum construction.

Personally, I think that Airbus is making a mistake on the A350 as it appears that this is roughly the direction they're heading. Time will tell.

Can't give you specifics on the F-22 but Boeing is a major subcontractor for the airframe on it so it seems reasonable that they would have learned from it as well.
Where are all of my respected members going?
 
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SEPilot
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RE: Why Does 787 Cost Less To Develop Than A350?

Mon Jan 22, 2007 4:58 am

Quoting Lightsaber (Reply 12):
As to the 787 being cheaper to develop than the A350... I could only speculate. However, the fact that Airbus is more political than Boeing must increase the costs. All else being equal, the less political organization can develop the same product for 1/3rd the cost of a "fully loaded" political organization.

I'll beat my favorite drum again; Airbus needs to divorce themselves from the politicians.

Quoting EbbUK (Reply 17):
Not if you include the ill-fated Sonic Cruiser from whence the 787 came. Include the costs of that folly as you do for the previous 350 designs, think both will even out.

I do not believe that it is fair to call the Sonic Cruiser ill-fated; at the time it was conceived Boeing perceived that an airliner significantly faster would sell well; but this was during an era of cheap oil. When oil prices shot up and stayed up Boeing shelved this project and used much they had learned to design a super-efficient airliner instead. What this is is responding to the market, not any kind of folly. The fact that it takes several years to develop an airliner means that when you start the market may be vastly different than when you finally fly the thing. If oil or a substitute for oil becomes cheap again, Boeing will probably dust off the Sonic Cruiser and be way ahead of the game (again).
The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
 
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N328KF
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RE: Why Does 787 Cost Less To Develop Than A350?

Mon Jan 22, 2007 5:20 am

Quoting EbbUK (Reply 17):
Not if you include the ill-fated Sonic Cruiser from whence the 787 came. Include the costs of that folly as you do for the previous 350 designs, think both will even out.

I wouldn't be surprised if the Sonic Cruiser R&D money was included in the Dreamliner figures. There's a big difference, though; Much of the Sonic Cruiser research could be directly applied to the 787, while the A350 Mks. 1-4 are so different from Mk.6 that there is little direct corrolation. Different fuselage, different wings, different construction techniques.
Quoting EI321 (Reply 25):
Is this just pure speculation or have you anything to support it?

Regarding credit ratings, this is easy enough to verify. I noted here back in November that S&P cut EADS from A- to A, and that they were about to cut it another notch. Boeing got bumped to A+ at the same time. Moody's was planning similar moves.FED EX Buys 15 X 777F, Cancels A380F Part II. As a follow-up, Airwise said that S&P still has EADS on credit watch for downgrade:"Airbus Faces 2006 Loss Despite Record Deliveries."

Quoting EI321 (Reply 25):
Is this just pure speculation? Airbus cashflow will be negative until 2012?

That's what many of the articles pasted here have indicated. I don't know if 2012 was the year it got better, but it was certainly in the first part of the next decade.

Quoting EI321 (Reply 25):
The A380 is mostly done also. Are airbus military engineers designers at the same location as Airbus engineers?


Many of them are the same engineers. It's not as if they're separate departments. They just get assigned to different projects.

Quoting Rheinbote (Reply 30):
Before leading JSF development, Statkus held very similar positions in the B-2 and F-22 programs...you can easily google that up by yourself.

Statkus showed what sort of power and insight he held in the Nova documentary on the Joint Strike Fighter ("Battle of the X-Planes".)

Quoting TeamAmerica (Reply 40):
Two posters have cited the F-22 as a technology precursor for the 787. In what way exactly, given that the F-22 is a Lockheed product? As for the V-22 Osprey,
Quoting BHMBAGLOCK (Reply 43):
Can't give you specifics on the F-22 but Boeing is a major subcontractor for the airframe on it so it seems reasonable that they would have learned from it as well.

Boeing is not merely a sub...they are partner prime contractors on those two programs. I think they do rank as "first-tier subcontractor" on the B-2, though.

[Edited 2007-01-21 21:37:29]
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TeamAmerica
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RE: Why Does 787 Cost Less To Develop Than A350?

Mon Jan 22, 2007 5:30 am

Quoting RichardPrice (Reply 42):
All of those projects has technology relevent to the 787 project, and would have given Boeing a lot of experience with those technologies.

No, I don't see it at all. I didn't say Boeing has nothing to do with these projects, but rather that the technologies involved do not relate to the 787.

Boeing builds the aft fuselage of the F-22, which is not similar to the 787 fuselage in any way. Boeing builds the V-22 fuselage, but that's a conventional aluminum structure. Boeing built bomb racks for the B-2, but of course the 787 doesn't have bomb racks....

You say the technology is relevant, and I ask again, in what way specifically?
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RichardPrice
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RE: Why Does 787 Cost Less To Develop Than A350?

Mon Jan 22, 2007 5:43 am

Quoting TeamAmerica (Reply 46):
No, I don't see it at all. I didn't say Boeing has nothing to do with these projects, but rather that the technologies involved do not relate to the 787.

From the F-22 -

Wings and aft fuselage - both composite primary load bearing structures (http://www.boeing.com/news/releases/1995/news.release.950621-a.html)

From the Osprey -

Digital avionics and fly by wire systems

From the B-2 -

Composite structural components and wing sections

Boeing picked up a *lot* of experience dealing with composite manufacturing and design in two of the three projects mentioned, and gained experience in fly by wire systems from the Osprey. All of this goes together, noone is saying the 787 came from these projects but they certainly lessened the learning curve Boeing was faced with.
 
Shenzhen
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RE: Why Does 787 Cost Less To Develop Than A350?

Mon Jan 22, 2007 5:51 am

Airbus must come out with a number so that the EU Governments can give/loan them 33 or so percent of the cost.

It would be foolish on their part to come in with a low number..... more like, how much can we get away with....

Cheers
 
keesje
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RE: Why Does 787 Cost Less To Develop Than A350?

Mon Jan 22, 2007 5:57 am

Quoting N328KF (Reply 10):
The line that came out said that the 787 was under what was budgeted, but over internal projections. Sounds sort of like the weight issue.

Is there any link to the total investment made to develop the 787? I haven´t seen one in all those years. I know last year unexpectedly another $.5 Bill was "invested" into 787 development.

Quoting Rheinbote (Reply 30):
In fact, the 787 owes many processes and tools used in composite design & manufacturing to the B-2, the V-22, the F-22 and the X-32 JSF demonstrator.

Inflammable stuff for the WTO I would think.

Quoting N328KF (Reply 45):
There's a big difference, though; Much of the Sonic Cruiser research could be directly applied to the 787, while the A350 Mks. 1-4 are so different from Mk.6 that there is little direct corrolation. Different fuselage, different wings, different construction techniques.

Looking at those designs Sonic Cruiser-7e7, A350-A350XWB, this seems a highly unrealistic assumption, don´t you think?

Quoting Scooter01 (Reply 35):
Boeing has the most experience in designing aircraft and a better functioning management

Although it is not the automatic background info provided on all Boeing related news, Boeings last two CEO´s also had "unscheduled shut downs" and some key people moved out / were jailed etc.

Boeing did not launch the enormous "Ethics" campaign for fun.
"Never mistake motion for action." Ernest Hemingway