Innovation Talk: The price of innovation is too high in aerospace

Lighter fuselages, new wings and efficient engines are financially valuable but unspectacular

 

The longest line at the Farnborough International Airshow last week was for a model aircraft. In the absence of the F-35 Lightning, the colossally expensive and accident-prone stealth fighter that was scheduled to be the show’s highlight before an engine failed on a test aircraft, Lockheed Martin brought a replica.

I joined the queue waiting to climb the steps and play with the controls of the imitation $113 million jet, which is intended to replace nine aircraft in the air forces and navies of the US and other countries. There was a nice view of a runway from the cockpit, with its pretend electronic display, but Top Gun, it was not.

Meanwhile, the biggest commercial announcement of the Farnborough show was not a new aircraft but some new Rolls-Royce engines and tweaked wings for an existing one – the Airbus A330 – to burn less fuel. “This is game-changing, 14 per cent,” enthused John Leahy, the European company’s chief salesman, about the amount of fuel per passenger seat the A330 Neo will save.

Not to be outdone in business-like pragmatism, Boeing touted the financial advantages of its 787, the A330’s direct rival. “Operating economics, flexibility, fuel economy. That’s what our entire product line is about,” said Scott Fancher, Boeing’s head of commercial aircraft development. “That is why airlines are so excited about this aircraft. In essence, it’s a fuel hedge.”

Here is the age of diminished expectations in aerospace. When I last visited Farnborough a decade ago, the talk was of risk-taking on grand projects to outmanoeuvre the opposition – Airbus’s A380, Boeing’s 787 and the F-35. The bill would be high but the benefits of new technology and groundbreaking innovation incalculable.

As it turned out, the significant miscalculation was the cost and complexity of making these visions real. The F-35 has yet to be brought into service and the A380 and 787 arrived late and over budget after setbacks including, in Boeing’s case, batteries catching fire.

The industry is chastened. James McNerney, chief executive of Boeing, promised investors in May that there would be no more “moonshots” in the form of entirely new aircraft and the company would instead “spiral in technology” by upgrading existing models. Boeing does not intend to replace its single-aisle 737 for 15 years, and is developing the fuel-saving 737 Max.

It is the safe strategic choice for Boeing and Airbus, which despite efforts by Bombardier and Embraer to compete at the smaller end of the market, are a duopoly. Each would displease investors and airlines if it refused to change, and knows its rival faces similar pressure.

But fuel-saving is not why the Wright Brothers got into the flying game, and risk-avoidance, while financially rational if the entire industry adopts the same course, makes you a target. Declaring that you will forswear moonshots for a decade or more is an invitation for someone else to have a go.

The moonshot man of the moment is Elon Musk, the founder of SpaceX, the rocket company, and Tesla Motors, which makes electric cars. He has written only speculatively about a supersonic passenger jet but the mention of his name is sufficient to rile executives. “This is a long-term play for us, not a short-term, flashy play,” says one sharply.

Military aerospace differs from civil aerospace – the customers do not choose their jet fighters based on fuel consumption, for example – but there are similarities between their problems. The F-35’s costs have risen far in excess of the original estimates – although it was pitched as being relatively affordable – and the aircraft has proved maddeningly difficult to develop.

The 787’s technical challenge, apart from its lithium ion batteries, was Boeing’s extensive use of composite materials. The biggest difficulty with the F-35 is that it is really three aircraft in one – a jet fighter for air forces, one that can land on naval carriers, and a vertical take-off variant for marines.

The Pentagon wanted the F-35 to be as flexible as possible to spread development costs. “Quantity is the key to affordability,” says Steve O’Bryan, Lockheed Martin’s head of international strategy. Not only will the F-35 be used by three US armed services, but it is being sold widely to allied armies and navies.

In practice, the F-35 has cast a pall over the notion of joint procurement projects. A Rand Corporation study last year estimated that it would have been cheaper for the Pentagon to have commissioned three separate aircraft for its various services than to try to combine them in a joint strike fighter. It advised the US government to avoid similar joint programmes in future.

The Pentagon has fought for years to get the F-35’s costs under control, and it last week pushed Lockheed, Northrop Grumman and BAE Systems into investing $170 million in cost-reduction initiatives. “It is a great pleasure to be here,” Frank Kendall, the US defence undersecretary for acquisition, told a Farnborough media briefing drily. “It would be even more of a pleasure if the F-35 were here with me.”

Its absence knocked a hole in the schedule, which was not really filled by familiar aircraft, including the Airbus 380 and the Boeing 787, flying around the Farnborough skies. Lighter fuselages, new wings and efficient engines are financially valuable but unspectacular. – (Financial Times)

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