Boeskov closes career with look to the future

 - May 16, 2008, 6:39 AM

To those outside Boeing, you are, and probably will be for a long time, associated most closely with the Boeing Business Jet. How did that happen?

At the time [1995], I was the head of product strategy and product development for Boeing Commercial Airplanes. What that meant was that we were looking at the future. . . where we should spend our product-development money, and it was a huge budget, over a billion dollars usually. I had a call from then president and now chairman Phil Condit, who asked, “Borge, is there any way we can make a good business jet out of the 737-600?”

What prompted Condit’s call?

He had had dinner with [General Electric chairman and CEO] Jack Welch. At the time, Jack was buying one hundred 737s from us, our new-generation 737s, [and] he had instructed his people to buy a couple of 737-600s for use in GE’s corporate fleet. Jack had considered the GV but he wanted something with a bigger cabin. He thought that for a 12-hour flight, the cabin was just too small. He liked the 737-600, but he wanted more range. That was when Phil called me.

And what did you say?

I went to work and reported back to him about two weeks later. I told him we could, if we combined the fuselage of the 737-700 with the wing of the 737-800. But not the -600, a little airplane with no room in the belly for additional fuel tanks, meaning it barely had the range of a Gulfstream IV. But by combining the -700 and
-800, we could get 6,000 nautical miles out of it. Phil was excited. So he called Jack and told him in essence, “You bought the wrong airplane.” But he explained what we could deliver by combining the -700 and -800, and Jack’s response was, “I want to be a partner in this project.” [General Electric did subsequently become a partner in Boeing Business Jets and replaced the order for two 737-600s with an order for two Boeing Business Jets, which attained its increased range by the addition of nine auxiliary fuel tanks. The formal launch of Boeing Business Jets was announced in July 1996 at Rockefeller Center in New York City.–Ed.]

That’s how you became involved in the Boeing Business Jet?

It was pretty clear to me that this was the job with which I wanted to finish my career at Boeing. Boeing doesn’t have mandatory retirement. But for senior officers of the company, it’s part of the contract with the board that it can simply choose not to renew the contract on April 1 preceding one’s 65th birthday. Only twice can I remember their making an exception. At the time, I had another five, almost six, years to go [to retirement], and I wanted to run the BBJ project.

How much of a gamble was the launch of the Boeing Business Jet?

The initial investment by new-airplane standards was not that high, but it was still sizeable–about what it would cost for a derivative aircraft. For example, it cost about what it would to create a -400 model from an existing -300. We shared the total investment costs with General Electric.

At the launch of Boeing Business Jets in July 1996, the market estimate for BBJs was relatively conservative. Was this intentional?

Our economic calculations were based on six to eight airplanes a year over a 10-year period. The optimistic line was 80 airplanes. Obviously, we did a lot better than that, but I must admit to you, we weren’t sure. Our feeling was that we could put people to work on it and do all kind of studies and not learn anything. Before our first press conference [July 1996], Condit, Welch and I were having a sandwich, and Jack asked me, “Borge, how many airplanes are you going to sell?” I said six to eight per year. He looked at me and said, “That’s not enough. Why don’t we just say 10 per year over 10 years.” Then he looked at Condit and asked, “We agree, it’s 100, don’t we?” We ended up saying 100 because Jack liked the number. And guess what? He was right.

If you had no market study, what, aside from Welch’s enthusiasm, prompted such a major decision?

We saw customer demand for two things–more cabin space and more baggage space. By using the -700 fuselage, we had 20 feet more cabin [than the -600] and room for auxiliary fuel tanks and baggage, with no additional aircraft systems demands.

Were you surprised when it turned out that BBJ customers were not so interested in range?

We were very surprised. At first, we had designed the BBJ for 10 tanks, with the number 10 tank in a sloped compartment in the tail, to get 6,200 nautical-mile range. In the end, we never even designed a number 10 tank. We found that customers didn’t want 10 tanks, or even nine tanks. In fact, I think we have only two airplanes in service with nine tanks. The rest have five, six or seven tanks.

Who are the BBJ’s customers?

They fall basically into three categories: private individuals and corporate individuals; large corporations with a requirement for transportation but who must go to a board of directors for approval; and heads-of-state and governments. Frankly, I had originally–even three years into the program–thought corporations would make up 50 percent of the buyers, private and corporate individuals would be 30 percent and heads-of-state and military 20 percent. It didn’t turn out that way. Private and corporate individuals are about 36 percent, heads-of-state and government are 26 percent and charter and fractionals are 21 percent. Large corporations are only 17 percent.

What effect did fractional ownership have on the program?

Initially, we weren’t quite sure. I personally went to [Richard] Santulli [founder and president of Executive Jet, parent company of the NetJets fractional-ownership program] and talked to him about it. His opinion was that there was no reason why a fractional program should not include the BBJ. We made an agreement with Executive Jet in 1997 and they now have half a dozen or so BBJs in service.

How much has the worldwide support system for the Boeing 737 airliner meant to the BBJ program?

It means a lot. Some of our customers early on were worried that buying only one airplane, they might be forgotten by Boeing, which was accustomed to selling 100 airplanes at a time. So we made it clear that their airplanes would benefit from Boeing’s worldwide support network, which we manage through our own people to make sure customers receive the personal attention they need with regard to spare parts and maintenance.

There are some stories about how Boeing Business Jets managed to add the winglet to the BBJ. Can you talk about that?

As an aerodynamics engineer, the winglet appealed to me first based on looks alone. It made it look more modern, and it distinguished it from the airliners. But I understood what the aerodynamics and structural people at Boeing were saying, that the additional weight and drag would cancel out any gain realized through improved aerodynamics. As it turned out, the weight didn’t increase by as much as we thought, and it was a lot more efficient. On long trips, we got a true fuel-efficiency improvement of 5 percent, which translated to 300 nautical miles. It also allowed an increase in climb gradient and a max takeoff weight increase of 3,000- to 4,000 pounds.

But the company was initially not that enthused, was it?

There wasn’t widespread enthusiasm for it through our technical community at Boeing. So I went to Joe Clark at Aviation Partners [in Seattle, which had developed the winglet concept for business jets] and we basically made out a one-page agreement. But when it came time to bolt them onto an airplane for flight testing, Boeing said it had no test airplanes available. So I went over to Hapag Lloyd to talk with some friends from my days in European sales and got them to agree on a hand-shake to loan us their airplane, provided I would give them the winglets if they worked. And if the winglets worked, they were very interested in installing them on their entire fleet. They operate a big charter/tour fleet of about twenty-five 737s. So we borrowed the airplane for about six weeks, and now the winglet is standard on all BBJs.

In competition with the Airbus Corporate Jetliner, the BBJ seems to be the winner. Why?

We had about a one-year jump on Airbus. In fact, I met an executive from Airbus who told me not long after we announced the BBJ, “For once–and this is the only time we admit it–Boeing did something right, and we’re going to do the same.” In 1997 they announced the ACJ at the Paris Air Show. But it doesn’t have the range or the support. They’ve talked about orders for 18 ACJs, but I think the real number is more like 12.

What would you do differently?

Not a lot, but I would have put more emphasis on the interior-completion aspect of the program, even though it was not our primary responsibility. We drastically underestimated the issues and problems that would be encountered by the completion centers Boeing selected. We simply didn’t know a lot about that aspect of the process, and it was a painful experience. Because some of the completion centers missed their target delivery dates by a year or more, it was a rather rocky start.

What is the greatest disappointment with regard to the program?

Even though we’ve exceeded our market projections by a lot, it has been fairly slow lately. I was hoping we would be at 100 orders by the time I retired, but that’s not happening for several reasons–the economic slowdown last summer combined with the effect of September 11, and a disappointing market response. We thought Fortune 100 and Fortune 500 companies would have bought into the program with more enthusiasm.

Where will Boeing Business Jets go from here?

I see the company moving into a more mature stage, where the product is recognized and is showing up on ramps all over the world. With regard to improvements in the airplane, we’re getting close to high-speed Internet, and Free Flight capability is a high priority. We also have a program to reduce the cabin altitude. We now have the BBJ2, and eventually we’ll have to get into something bigger–a BBJ3 or maybe a supersonic BBJ– but that’s still out there. And there is potential to increase the Mach number by an increase in engine thrust. We’ve flight tested the BBJ with winglets to Mach 0.91 and we have those results in the can, so an Mmo of Mach 0.84 is a possibility.

What’s in Borge Boeskov’s future?

I’m going to stay right here in Seattle, and maybe spend more time in our home in Sun Valley; more fishing and skiing. I’m not decoupling from the world. I’ve been lecturing at the University of Washington and helping on some projects there, and I want to give something back to the community.

So you won’t be moving to Airbus?

That’s for darn sure. I’ve had several opportunities to go to Airbus in my career. In the late 1970s and early 1980s Airbus was looking for people in the aerospace industry–in the U.S. and Europe–and offering them double their salary to move to Toulouse [France, where Airbus is based]. Some people actually left. I had two of those offers, but I never came close to accepting. I have Boeing running in my veins.