But when Johnson showed Abraham a chart depicting the economic advantages of the 7J7 over the A320, the Lufthansa executive turned to Hillinga and said: “Rudy, get a photographer. We’ll sign this, and I’ll buy 20 of these aircraft if you can guarantee the figures.”
Abraham knew perfectly well that Johnson was in no position to do that. What Abraham really wanted was a stretched 737, to turn up the competitive heat on Airbus.
Abraham wasn’t the only skeptic. Conboy recalls that the airlines’ reactions were “mixed from day one. We’d talk to the planning people and they’d say ‘When can we have it?’ But we never got an enthusiastic response from the operations people.”
Gordon McKinzie, United Airlines’ manager for new technology, recalls that Boeing couldn’t settle on a design for the 7J7: “One week it was a single-aisle 90-passenger airplane, the next a 180-seat twin-aisle design. We saw things as being very fluid.” The aircraft was neither as fast nor as flexible as the 757, which was, in McKinzie’s view, “a great airplane.” At best, McKinzie felt, United would “have taken on some aircraft, not a large acquisition, just to feel our way along.”
Airbus’ chief planner, Adam Brown, still believes that Boeing hyped the 7J7 in a bid to disrupt the A320 program. At the 1985 Paris show, Airbus faced the inevitable question: Was the company still confident in the A320’s future? “We can go up against the ‘magic aeroplane,’ ” Brown answered, “and we can beat it.”
And beat it Airbus did. By the time Boeing decided to launch the stretch 737-400, Lufthansa had bought the A320. United and other airlines were anxious to start retiring their vast flocks of fuel-thirsty 727s. Northwest Airlines announced the first U.S. order for A320s—up to 100 airplanes—in late 1986. United followed suit within months.
Airbus stuck to its guns, Brown says today, because its studies showed that aft-engine aircraft were heavy, and maintenance costs would be higher. “The answer depended very much on the price of fuel,” says Brown. Only if the price of fuel remained high could the savings offset the greater price and complexity of a new aircraft. “With the projections that we were most comfortable with at the time, they couldn’t beat the A320.” And despite the forecasts, oil prices peaked in 1981. After the 1985 Paris show, Saudi Arabia, tired of losing market share while trying to stabilize the market on its own, and watching as the other OPEC members cheated, turned on the spigot. Jet fuel dropped to 85 cents a gallon.
But the biggest factor may have been unexpected developments at Boeing and GE. In 1981, the 737 was Boeing’s weakest seller, and the company’s objective was to sell 500 more and then close down the line. The 737-300 was launched with quieter engines as a quick fix, a move to help Boeing achieve that modest sales goal. Instead, 737-300 sales took off. By the end of 1987, Boeing had sold more than 1,000 of them, and each one had the previously slow-selling CFM56 engines from GE and its French partner, Snecma. The follow-on, -400, would use them as well. GE began to look at the CFM56 differently.
In 1987, the rival V2500 engine for the A320, which had beaten the CFM56 in early sales, ran into technical trouble. Its biggest customer, Lufthansa, switched to the CFM56. Suddenly, the CFM56 dominated a fast-growing market. GE’s Brian Rowe could read the signs. “When the CFM56 took off, we thought, What the hell? All we’d be doing [by launching the UDF] is killing our own business.” And while engineers expected that the UDF could be made reliable by earlier standards, turbofans were getting much, much better than that. “The biggest issue with the UDF,” Mulally says now, “was to make it a simple engine and get the reliability up and the maintenance down.”
At the end of August 1987, Boeing announced that the 7J7 had been postponed a year. (And Monty Python’s dead parrot was “just resting.”)