In the late 1990s, Boeing began considering a replacement for the 767 when sales weakened due to the competing Airbus A330-200. As sales of the Boeing 747-400 also slowed, the company proposed two new aircraft, which were the Sonic Cruiser and the 747X. The Sonic Cruiser would have achieved higher speeds (approximately Mach 0.98) while burning fuel at the same rate as the existing 767 or A330. The 747X, competing with the Airbus A380, would have lengthened the 747-400 and improved efficiency by using a composite supercritical wing.
Market interest for the 747X was tepid, but the Sonic Cruiser had brighter prospects. Several major airlines in the United States, including Continental Airlines, initially showed enthusiasm for the Sonic Cruiser concept, although they also expressed concerns about the operating cost. By decreasing travel time, they would be able to increase customer satisfaction and aircraft utilization.
The September 11, 2001 attacks upended the global airline market. Airlines could not justify large capital expenditures, and increased petroleum prices made them more interested in efficiency than speed. The worst-affected airlines, those in the United States, were considered the most likely customers of the Sonic Cruiser. Boeing offered airlines the option of using the airframe for either higher speed or increased efficiency, but the high projected airframe costs caused demand to slacken further. Boeing canceled the 747X once Airbus launched production of the Airbus A380, and switched tracks by offering an alternative product, the 7E7.
The replacement for the Sonic Cruiser project was dubbed the "7E7" (with a development code name of "Y2"). The "E" was said to stand for various things, depending upon the audience. To some, it stood for "efficiency", to others it stood for "environmentally friendly". In the end, Boeing claimed it merely stood for "Eight", after the aircraft was eventually rechristened "787". A public naming competition was also held, for which out of 500,000 votes cast online the winning title was Dreamliner.
On April 26, 2004, the Japanese airline All Nippon Airways (ANA) became the launch customer for the 787, then still known as the 7E7, by announcing a firm order for 50 aircraft to be delivered at the end of 2008. ANA's order included 30 787-3, 290–330 seat, one-class domestic aircraft, and 20 787-8, long-haul, 210–250 seat, two-class aircraft for regional international routes such as Tokyo Narita–Beijing. The aircraft will allow ANA to open new routes to mid-sized cities not previously served, such as Denver, Montreal, and Boston.
After stiff competition, Boeing announced on December 16, 2003, that the 787 would be assembled in Everett, Washington. Instead of building the complete aircraft from the ground up in the traditional manner, final assembly employs just 800 to 1,200 people to join completed sub-assemblies and integrate systems. This is a technique that Boeing has previously used on the 737 program, which involves shipping fuselage barrel sections by rail from Spirit AeroSystems' Wichita, Kansas, facility to Boeing's narrowbody final assembly plant in Renton, Washington. As the major components have many components pre-installed before delivery to Everett, final assembly time is reduced to only three days. This is less than a quarter of the time traditionally needed for Boeing's final assembly process. In order to speed delivery of the 787's major components, Boeing has modified three 747s purchased from Chinese and Taiwanese airlines. Called Dreamlifters, these widened airplanes can house the wings and fuselage of the 787 as well as other smaller parts.