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Boeing 787 Dreamliner Lets Airlines Fulfill New Market Dreams

Stocks in this article: AAMRQ BA DAL UAL

CHICAGO ( TheStreet) -- In the past week, three airlines have announced ambitious new routes for the Boeing (BA)787, a signal that the aircraft is finally starting to realize its potential to break new ground in commercial aviation.

On Aug. 25, United (UAL) said it would fly a 787 from San Francisco to Chengdu, China, starting in June. On Sept. 3, British Airways said it would fly London-Austin starting in March, and Norwegian Air Shuttle said it would fly from Stockholm to Los Angeles in March, from Copenhagen to Los Angeles in April, from Oslo to Los Angeles in June, from Stockholm to Oakland in May and from Oslo to Oakland and Orlando in May.

"People are gaining confidence in the aircraft and as they do so, they are able to make new route announcements and open new markets," said Richard Aboulafia, vice president of consulting firm Teal Group.

The carriers are each using the airplane in different ways, all of them ambitious. United wants to open new routes in China -- it will begin the first-ever non-stop service between the U.S. and China's fourth-largest city. British Airways will fly non-stop from London Heathrow to a medium-sized U.S. city. Norwegian will be breaking the mold for European and U.S. low-fare carriers, which historically have flown only domestic and close-in international routes.

Aboulafia said the variety of new routes shows the 787's versatility. The United and British Airways efforts are similar, he said, in that they involve "long, thin routes" that could not be well-served with predecessor aircraft. Before the 787, no long-range aircraft was small enough to develop routes that have "thin" or limited traffic.

"The challenge was always to combine range, small size and good economics," he said. "The goal was to get range to migrate downward" to a smaller aircraft. For Boeing, the 767 began the process, he said. An extended range 767 typically has 181 to 245 seats and a range of 5,625 to 6,600 miles. By contrast, the current version 787-8 typically has 210 to 250 seats and a range of 7,650 to 8,200 miles.

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