- Three-Part Overview
- Long Term Airbus / Boeing Positioning
- Boeing Overview
We’ve looked at Airbus and its product line up. Now let’s look at its chief U.S. rival Boeing and the 7-Series family.
Boeing – 767 / 777 / 787 / 747
For all intents and purposes, the 767 has had a good innings, and while its current backlog is dominated by 767-300Fs, there is a good chance this family will easily reach the next decade in freighter guise to complement Boeing’s already-impressive cargo line up. That aside, the KC-46A Tanker project will also bring in much needed revenue.
The 777 family is Boeing’s current cash cow. The “problem”, is simply that demand is too high and arguably, output needs to rise. It’s not that Boeing cannot or will not do it, it is that they do not need to. It has no substitute. This has kept pricing strong, and even though the next half decade will be a financial pressure pot with weak margins on each and every 787 delivery, it is the 777 that will make up the shortfall and it is difficult to see where those margins dip below 8.5% – and that’s a bearish outlook.
With the 777-8X and 777-9X almost certainly poised to get the nod in 2013, Boeing knows it has the materials and supply chain expertise to create these new additions without befalling the same fate that led the 747 program to head into a loss position. There will be extensive changes to these models, much in the way the 747-8 had, albeit with a much bigger wing that effectively pushes the 777X family into the same sort of airport codes as the 747 and A380. Emirates has been leading the charge for the trigger to be pulled – in part because it needs greater capacity as it expands and also because it has seen just how bad things get when AOG issues hurt their A380 fleet and they have nothing of similar size to replace them with. The 777-9X is arguably their “pet project” and that is why they are so keen on it.
While the current 777F racking up non-passenger orders and the 777-300ER effectively shoring up demand in its segment, as well as that of the 747 and A380, Boeing does not need to hit the panic button. The A350-1000 is still largely undefined. Its parameters may change as design freeze approaches, but basic fundamentals like a narrower fuselage, less range, lower thrust rated engines and questions over the wing mean that Boeing is acutely aware of what changes the 777 must undergo to remain not just competitive, but ahead of the A350-1000. On face value, that doesn’t look like much of a contest, but we cannot discount the level of changes needed to the 777 wing and fuselage when mating metallic structures with carbon fibre wings. It is not that it cannot be done, it’s that it has not been done on this scale. The 777X could be launched tomorrow, but with the 777-300ER still dominating and the A350-1000 facing the axe, EIS is unlikely before 2019.
The 787 speaks for itself.
As production continues to assist in its evolution, the performance that Boeing had promised customers will be attained. It is unreasonable to infer that the two current operators are in anyway displeased other than by the late deliveries. Dispatch reliability has continued to climb and with assembly of the stretched, long range 787-9 due to get underway this fall, Boeing certainly has its hands full.
South Carolina will also be a key focus point, if as planned, the 787-10X is launched this year and with a rate rise to 5 units per month largely on track, one could argue that there are some stars aligning for Boeing in its aim to reach double that figure by the end of next year. For now, that target remains just that and the key is to finish change incorporation on the existing 787s parked out at Paine Field as well as ramp up production in tandem.
As the decade moves on and more 787s enter service, the appeal of the rival A330 will wane. Just as the A340 keeled over when the 777 expanded its range with the 777-200ER, so too will the 787-9 deliver another killer blow to Airbus’ current beating heart on the A330.
In a way, the 747-8 family is lucky – precisely because it is a family. Unlike the A380 which doesn’t have a freighter, the 747-8 Freighter variant will continue to see production for years to come. The fate of the 747-8 Intercontinental however, has again come under pressure not just because of the roaring 777-300ER success, but also because of the fact that the market is now looking for a 420-seat 777X to join the ranks.
Like the A380, the 747-8 Intercontinental will sadly remain marginalised. On the flipside, is it better to have your market share eroded by your competitor or is it better to do it yourself?
If any answer were needed, one need only go back to February 2000 at the launch of the 777-200LR and 777-300ER. After their launch, the 747-400 only managed to muster 22 passenger orders. The 747-400ER only snared 6, while the 747-400F notched up 49 orders and the 747-400ERF amassed 38 units. From a passenger-jet perspective, the 747-400 had had a good run. The launch of the 777-200LR and 777-300ER simply evolved the market towards long range, twin aisle, twin engine airplanes and that’s where the future competition between Airbus and Boeing will play out.
But who has the right products for the coming decade and beyond?
Part Three will be published tomorrow.
Image Courtesy Of Boeing