Bloomberg News

Dreamliner Savings Meet Cabin Cool as United’s 787 Debuts

November 05, 2012

Dreamliner 787

A United Continental Holdings Inc. airplane taxis past the Boeing Co. 787 Dreamliner at Reagan National Airport in Arlington, Virginia, U.S., on Monday, May 7, 2012. Photographer: Joshua Roberts/Bloomberg

United Continental Holdings Inc. (UAL:US) is counting on Boeing Co. (BA:US)’s 787 Dreamliner to deliver fuel savings and in-flight cool as the world’s largest carrier becomes the first in the U.S. to fly the composite-plastic jet.

“If you want to be the world’s leading airline, then you need the world’s leading airplane, and we have that,” Chief Executive Officer Jeff Smisek told passengers and employees in Houston before United’s 787 debuted with a flight to Chicago yesterday.

The Dreamliner has attracted notice for production delays as well as jet-lag-reducing creature comforts. The plane looms large in Chicago-based United’s efforts to boost a benchmark revenue gauge and improve operations marred by integration woes from the 2010 merger that created the airline.

“The reality is we were not reliable in June and July,” Smisek said in an interview aboard Flight 1116 en route to Chicago. “We lost some valuable customers. We’re in the process of earning them back.”

Boeing’s promise of a 20 percent efficiency gain for the 787 over similar-size planes is a lure for U.S. airlines facing the highest sustained prices ever for jet kerosene. United should save about 30 percent on airframe maintenance costs on the new jets, Senior Vice President Gerry Laderman said in an interview yesterday.

LED Lighting

Passenger amenities also were part of Boeing’s sales pitch, and United promotes features such as LED lighting that changes in different phases of flight, touchless faucets and toilets, and windows that are the largest in the industry and use dimmers instead of sliding plastic shades to block outside light.

They were tinted a hazy blue against the morning sunshine yesterday on Flight 1116, and the upturned wingtips flexed as the 787 climbed and encountered brief turbulence. Smisek opened the on-board celebration with a toast, and passengers thronged galleys and aisles, praising the lavatories and quiet engines.

“I like the aircraft a lot,” said Mark Schiff, a Chicago lawyer who shifted plans to catch the early morning flight when he discovered the Dreamliner was making the trip. “It’s a much nicer atmosphere. It’s only a two-hour flight, but it’s been a breeze.”

With the composite construction, the 787’s interior can withstand higher humidity, allowing cabin pressurization that puts more oxygen in the air to minimize traveler fatigue and headache. As configured for United, the twin-engine jet seats 219 people.

‘Wow Factor’

United can use the boost from what aviation consultant Robert Mann called the “wow factor” from being the first U.S. carrier flying the Dreamliner, which entered commercial service in 2011 with All Nippon Airways Co. (9202)

Sales at United rose just 2 percent in the trailing 12 months through Sept. 30, based on data compiled by Bloomberg, compared with North American airlines’ average 12 percent gain. Revenue from each seat flown a mile, a benchmark gauge, was the lowest of 2012 last quarter, and the on-time arrival rate of 72 percent was low for U.S. carriers, especially in snow-free summer months.

United “chased away the high revenue passengers with their operational issues,” said Mann, owner of consultant R.W. Mann & Co. in Port Washington, New York. While the airline eventually will be able to charge premium fares on Dreamliner flights, those prices probably will have to wait until it’s established on the overseas routes for which it was designed, he said.

Service Delay

That won’t be as soon as United initially planned. United shelved the jet’s planned Dec. 4 international debut on flights from Houston to Amsterdam after Boeing delivered a second 787 later than planned, Rahsaan Johnson, a spokesman, said in an e-mail yesterday.

United instead will start international service Jan. 3, with flights from Los Angeles to Tokyo and add service from Houston to Lagos, Nigeria, a few days later.

Range is one of the sales points for the Dreamliner, because it allows airlines to serve long-haul routes that don’t have enough traffic to support a four-engine jumbo jet such as the 747. The 787-8 model can fly as far as 8,200 nautical miles (15,200 kilometers) nonstop, according to Boeing.

The 787-8 version has a list price of $206.8 million, and the stretched 787-9 due to enter service in 2014 retails for $243.6 million. Airlines receive discounts to published prices. Boeing had sold 838 Dreamliners as of Sept. 30.

The Dreamliner symbolically punctuates the merger that built the new United from former United parent UAL Corp. and Continental Airlines Inc., an all-Boeing customer that agreed to buy 787s in 2004. The old United, which flew Boeing and Airbus SAS jets, placed a Dreamliner order in 2009.

More 787s

United has said it expects to receive its third and fourth 787s this month and a fifth by year’s end, with another 45 on order. The Dreamliner’s commercial debut was more than three years behind schedule, as Chicago-based Boeing struggled with new materials and production techniques.

Schiff, the Chicago lawyer, was among passengers on Flight 1116 to notice the lack of Wi-Fi on the most technologically advanced commercial jet in the world.

Smisek said that Boeing was working with federal aviation authorities to approve communications equipment to maintain broadband Internet access on a composite aircraft, a process that could take until 2014 to complete.

“We need to have Wi-Fi in this airplane, but we’re waiting for Boeing to get the certification done,” he said.

The 787’s sleek design and amenities drew aviation buffs from around the world to Houston for Flight 1116. Among those on hand was Thomas Lee, 60, who said he was on the first flights of the 747, the double-decker Airbus A380 and All Nippon’s Dreamliner.

“It’s an amazing airplane,” he said. “I simply had to be here.”

Yuta Tsuru flew in from Tokyo, brandishing a certificate from All Nippon’s inaugural flight last year. Tsuru said he was on hand because he has a personal attachment to the Dreamliner: His father works for a Boeing 787 subcontractor in Japan.

“He made a part of this plane,” Tsuru said.

To contact the reporter on this story: Julie Johnsson in Chicago at jjohnsson@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net


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Companies Mentioned

  • UAL
    (United Continental Holdings Inc)
    • $65.28 USD
    • 0.35
    • 0.54%
  • BA
    (Boeing Co/The)
    • $131.63 USD
    • 0.39
    • 0.3%
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