Boeing Ballistic: BA’s Boss Has Every Right To A Rant

I know this is going to be hard, but do spare a thought for poor Willie Walsh. The announcement of further delays to the 787 Dreamliner is yet another bruising for British Airways battered chief executive. And this time it really is due to circumstances beyond his control.

Mr Walsh has rightly taken the flak for the chaotic opening of the airlines new home at Heathrows Terminal 5. But even his most ardent critics - now a highly competitive field - cant pin the blame for Boeings problems on him.

This will be no consolation for BA shareholders, of course, and Boeings failure to deliver the Dreamliner on time will probably prove more costly for BA in the long run than even the Terminal 5 fiasco.

The Dreamliner project, which is now running 18 months late, is hugely important for the airline industry. If Boeing could somehow produce the 787 out of thin air it could probably chalk up sales of more than $250 billion right now.

The revolutionary carbon-fibre design will cut fuel consumption by 25 per cent - and reduce carbon dioxide emissions by a quarter as well.

Sky high oil prices have brought airline economics down to earth with a bump.

Oasis, the low-cost airline that operated from Gatwick to Hong Kong, collapsed yesterday and four US carriers have sought bankruptcy protection in the past week alone.

The issue is particularly important for BA, which held off buying a new fleet while it sorted out its pension deficit problems. The moment that £2 billion black hole was plugged, BA ordered 24 787s for $4.2 billion and a further 12 Airbus A380s for $3.6billion.

Mr Walsh pulled out every favour BA had with its long-time supplier Boeing to ensure that its 787 order went to the head of the production queue and it was able to get first deliveries from August 2010.

This will have infuriated other Boeing customers, such as Virgin Atlantic, who have got delivery slots as late as 2014.

For BA, getting those early slots was vital. It would enable it to deploy a new fleet of aircraft in time for the biggest tourist event ever to hit the UK: the 2012 London Olympics.

A new fleet of 787s would have allowed the airline to increase its capacity, improve the quality of its service and, vitally, do it all 25 per cent cheaper.

The 18-month delay to the 787 throws all that into doubt. Even if there are no more setbacks - and given its revolutionary design there can be no guarantee of that - BA will not receive its first plane until December 2011 or January 2012.

It will then take another two or three months to bed in crew and pilots, which means that BA may have only a couple of 787s flying by the time the first race is run.

The lost revenue potential is enormous and Mr Walsh will no doubt take out some of the frustration of the past few weeks on Boeing in demanding compensation and access to other aircraft.

He should certainly not go easy on the Boeing high command. While Airbus was going through its A380 production nightmares in 2006, Jim McNerney, Boeings chief executive, repeatedly guaranteed that the 787 would be delivered on time.

This sounded like hubris at the time but with the benefit of hindsight it seems downright dumb.

At the very least, Mr McNerney can now expect an earful from Willie Walsh. And, by all accounts, that is not pleasant.

david.wighton@thetimes.co.uk

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