CASE 16
The Boeing 7E7
Written By: Stephanie Milas, Amber Wells, Justice Young, Kodi Kuhnash,
Herbert Lohrberg, Chelsea Synder, and Taylor Gannon
April 11, 2019
Financial Analysis and Decision Making, MBA 7300-01
Case Introduction
The Boeing company is a leader in the aircraft manufacturing industry, alongside their
competitor Airbus. Boeing is known to have two divisions and specializes in developing
commercial and defense aircraft. During 2003, airline profits declined significantly due to the
war of US and Iraq in fighting against terrorism and the rapid spread of the SARS disease
throughout the world. Despite these unfortunate events, Boeing decided to publicly announce
their new project for the development of the more efficient 7E7 commercial aircraft. Michael
Blair, the head of the 7E7 project, thought that this was the perfect time for Boeing to launch this
project.
In order to maintain their competitive advantage against Airbus, Boeing needed to develop a new
commercial aircraft to be available for their buyers. The last successful aircraft that Boeing
developed and manufactured was the 777 in 1994. Since then, there have been two prospective
commercial aircraft projects that have been canceled. To pull Boeing out of the financial slump
and to recoup the aircraft sales that the company had lost throughout the previous years to
Airbus, it was time for Boeing to manufacture a new commercial aircraft.
Before the project of the 7E7 could be started, Blair, needed to present the project to Boeing’s
Board of Directors and receive their approval and support. First, Blair would need to complete a
financial analysis of how well this project is expected to be profitable to the overall company and
