Jetrader - May/June 2012 - 15

2012 Legs
January began the Dream Tour’s second leg, mostly a domestic U.S. jaunt to cities including Wichita, Kansas; Rockford, Ill.; Huntsville, Ala.; and St. Louis, Mo., with a long-distance detour via Dublin, Ireland, as part of its ﬁnanciers’ debut (see below). By February, the Dreamliner was chasing warmer weather on its third tour leg, with two stops in Asia—Bangkok, for a visit with operator, Thai International, and Singapore, for appearances at the Singapore Air Show. By that point in its worldwide comingout effort, the Dreamliner had played host to nearly 25,000 onboard visitors who experienced the plane’s interior. “Our customers, partners, employees, and the ﬁnance and leasing communities have all expressed their delight with the airplane,” said Scott Fancher, who served as Boeing’s 787 program vice president and general manager from late 2008 until recently when he moved to the company’s 777 program. At this writing, ZA003 was entering the second half of its airborne marathon, and its fourth tour segment that includes mostly North American stops—Toronto, Canada; Boston, Mass.; Newark, N.J.; Phoenix, Ariz.; San Diego, Calif.; Long Beach, Calif.; and Salt Lake City, Utah,—with a side trip to Mexican customer, Aero Mexico. Tour legs are announced about a month beforehand. The ﬁfth leg begins with a trip to Chile’s FIDAE Air Show in late March.

As part of the Dream Tour, Haas and his Boeing colleagues have debarked to meet with ﬁnanciers and show them ﬁrsthand the realizations of their design suggestions. The Dublin tour stop was timed to coincide with the 2012 European Air Finance Conference. Boeing hosted more than 100 industry notables for 787 tours at Dublin’s airport, among them Tom Hollahan, managing director and global aviation industry head at of Citibank. “It’s a very proud moment for me because I was one of the banks that the design team came to talk to when this was just in Boeing’s imagination,” Hollahan said. “Now, to see the ﬁnished product and how it meets all of the criteria we talked about in terms of cost efﬁciency, the ease and low-cost of transition between operators, commonality—all the things that affect residual value positively—they’re in this aircraft. It’s going to be successful from a ﬁnancial standpoint immediately, which is highly unusual,” Hollahan said. On a recent Boston, Mass., to Newark, N.J., ﬂight, Boeing hosted a dozen leading ﬁnanciers and appraisers, many like Hollahan who contributed ideas from the beginning, for their ﬁrst 787 in-ﬂight experience.

Some familiar ISTAT faces were among those joining Boeing for the ﬁnancial community’s ﬁrst actual ﬂight aboard the new 787 Dreamliner. Seen deplaning here (from left) are Gerry Laderman, senior vice president ﬁnance and treasurer for United Continental; Tom Hollahan, managing director, global head of aviation, Citi; John Vitale, president and CEO of AVITAS and ISTAT immediate past president; Jim Palen, managing director at Jefferies & Company; and co-host Kostya Zolotusky, managing director, capital markets development and leasing, Boeing Capital Corp. (Boeing photo by Greg Thon)

Standardization Story
Guests were wowed by the 787’s standard ﬂight deck heads-up display and the cabin’s ability to be easily reconﬁgured thanks to standardized seat tracks and frames with holes pre-drilled made possible by composite material use. Every 787 is also equipped to allow interchange of either GE or RollsRoyce engines, depending on an operator’s preference. “The plane that you buy is like the ELX model of a car. It comes with all the features; there’s no guessing if the airplane you’re getting has what you need for operation or transition to another operator,” said Kostya Zolotusky, managing director of capital markets development and leasing at Boeing Capital Corp. Financiers aboard also took notice of the airplane’s early and widespread market acceptance. “What an aircraft ﬁnancier wants in an airplane is ubiquity, and the 787 has that hands down,” said Doug Runte, managing director at Deutsche Bank and an ISTAT board member. “With a large number of customers and an extraordinarily high

Circling Back with Financiers
Along with its all-composite structure, the Dreamliner also made aviation history by being the ﬁrst new commercial airplane to include input from the ﬁnancial community as a fundamental part of its design process. From the program’s inception, Boeing sought opinions not only from its customers but a cadre of aircraft bankers, investors and appraisers on how it could meet its operational mission and prove attractive to aircraft investors. “That early involvement has really been key, and it’s the source of a number of the concepts that make this airplane stand out, like that of standardization. It was absolutely driven by the ﬁnancial community,” said Jim Hass, Boeing’s 787 marketing director and a frequent tour presenter.

level of orders at this stage in the program, it seems destined to be well-accepted by the ﬁnancial community. The numbers speak for themselves—more than 850 orders from 60 customers.” Although the 787’s entry into service was delayed by design challenges, the airplane’s introduction is proceeding on track in terms of dispatch reliability with the company’s other and most-recent widebody program, the 777. Improvements to address weight concerns or issues discovered during ﬂight testing have been done in phases, similar to other airplane programs. 787 ofﬁcials say they will continue to incorporate these milestones—referred to as block points— with each one further reducing manufacturing costs and aircraft weight. While the 787 was designed with a concept of a model “family” in mind, an important consideration among customers and ﬁnanciers, the company says the “Dash 8s” in production now represent an enduring solution as opposed to an entry-level step. “The market needs 1,200 replacement airplanes of its size, and it’s the only small economical widebody alternative in the future ﬂeet. Every 787 is a long-range airplane, from day one, and this plane has the market to itself,” says Boeing’s Jim Haas. Thanks to Boeing for supplying editorial content for this story. Jetrader 15

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Jetrader - May/June 2012

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