Boeing 787: A Paradigm Shift or Just a Nice Airplane?

So far, Boeing shares have not benefited from the start of 787 deliveries. From Jan. 1, 2011, the shares are up 5%, while the S&P 500 is up 12%. This year, Boeing is down 6% while the S&P is up 12%. Analysts have consistently suggested, over the past two years, that Boeing shares would gain once deliveries began, but that is not what has occurred.

According to Aboulafia, "The sad truth in this business is that, since the dawn of the jet age, you cannot say that any single aircraft has revolutionized anything." The advent of twin aisle jets and of the high bypass turbofan are considered similar events in the development of jet aircraft, he said, and yet world airline traffic grew 309% in the 1960s, before the two "revolutions," and 214% from 1970 to 1980.

Hamlin said the 350 and the 787 represent a major shift in terms of materials used in airplanes. "The first paradigm shift was from wood to metal, and now we are shifting from metal to composites," he said. Does that matter to carriers who fly the aircraft? Yes, in terms of fuel efficiency, but in terms of passenger growth, "everything is structured around hubs now," Hamlin said. "Customer loyalties are already lined up."

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-- Written by Ted Reed in Charlotte, N.C.

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