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Boeing To Increase 777/747-8 Production Rates  
User currently offlineoykie From Norway, joined Jan 2006, 2732 posts, RR: 4
Posted (4 years 5 months 2 weeks 1 day 1 hour ago) and read 15098 times:

Quote:
News Release Issued: March 19, 2010 8:30 AM EDT
Boeing Production Rate Increases Accelerated to Meet Customer Demand
SEATTLE, March 19 /PRNewswire-FirstCall/ -- Boeing (NYSE: BA) today announced that it will accelerate planned rate increases on both the 777 and 747 programs. The accelerated rate increases will support increasing customer demand in the recovering airplane market.
"Our customers recognize the great capability and value of the 777 and 747-8," said Boeing Commercial Airplanes President and CEO Jim Albaugh. "Market improvement and our conservatively managed approach to production have put us in a position where we see it necessary to raise aircraft output. Increasing our rate is the right thing to do to support our customers."
The company will accelerate the 777 program's rate increase to seven airplanes per month (from five per month) by approximately six months, from early 2012 to mid-2011. The 747 program's planned production rate increase to two airplanes per month (from 1.5 per month) will move from mid-2013 to mid-2012. Suppliers for both the 777 and 747 will be prepared to support the accelerated rate increases.
"We see 2010 as the year of overall economic recovery within the industry and 2011 a year where airlines return to profitability," said Randy Tinseth, vice president of Marketing for Boeing Commercial Airplanes. "As a result, we anticipate an increase in demand for airplanes in 2012 and beyond."
The current production rate decisions are not expected to have a material impact on 2010 financial results. The company will provide a complete guidance update when it releases first-quarter financial results.

This is as expectet. At least for te 777. The 747-8 is not a huge increase. 6 more pr year. However it is nice to see the manufacturers confident in the future. We should hear about plans for the 737 rates in a month or two.


Dream no small dream; it lacks magic. Dream large, then go make that dream real - Donald Douglas
45 replies: All unread, showing first 25:
 
User currently onlineMEA-707 From Netherlands, joined Nov 1999, 4320 posts, RR: 36
Reply 1, posted (4 years 5 months 2 weeks 1 day 1 hour ago) and read 14976 times:

The 747 rate makes sense, but the 777 has less then 300 orders left, 3,5 years of production with 7 a month. And most major airlines seem to have all the 777s they need, I don't see much follow on orders happening by say Singapore, American or JAL coming. I also don't expect major new 777 operators. This might be a sign there are big cargo orders coming.


nobody has ever died from hard work, but why take the risk?
User currently offlineRonaldo747 From United States of America, joined Feb 2009, 378 posts, RR: 0
Reply 2, posted (4 years 5 months 2 weeks 1 day ago) and read 14905 times:

Well, I'm a bit surprised, perhaps there are some orders on the way, like launch customers of the 777EW and more orders for the 747.

User currently offlineoykie From Norway, joined Jan 2006, 2732 posts, RR: 4
Reply 3, posted (4 years 5 months 2 weeks 1 day ago) and read 14823 times:

The increase on the 777 has lately been speculated by media. But you are right. Relative to the backlog it does not add up. So either there are some customers we have not seen coming online, or the incremental upgrade looks better than the 4% we believe they will achieve wihtout a major redesign.


Dream no small dream; it lacks magic. Dream large, then go make that dream real - Donald Douglas
User currently offlineStitch From United States of America, joined Jul 2005, 30908 posts, RR: 87
Reply 4, posted (4 years 5 months 2 weeks 1 day ago) and read 14733 times:
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Part of the 747-8 program's recent write-off was due to the planned production drop to 1.5 a month from 2. Now that Boeing is returning to 2 per month, I wonder how that will (positively) affect future quarters?

As for the 777, has Boeing already performed the drop from seven per month to five, or is it staying stable at seven?

And I think the 777 can record another ~350 sales to reach the 1500 mark, so that should keep the line chugging through the end of the decade (if at a lower rate).

It also seems to be a sign Boeing is planning to launch the "777NG" in at least some form over the next five years which would help generate a large new tranche of orders.


User currently offlinePM From Germany, joined Feb 2005, 6889 posts, RR: 63
Reply 5, posted (4 years 5 months 2 weeks 1 day ago) and read 14681 times:

Quoting Stitch (Reply 4):
has Boeing already performed the drop from seven per month to five, or is it staying stable at seven?

I think I read somewhere that it's too late to reverse the drop to 5 but it seems that this will be a short-lived reduction and 7 a month will soon be restored.

We shouldn't be surprised. The 777, even without any makeover, still has a lot of life in it.


User currently offlinemanfredj From United States of America, joined Mar 2007, 1132 posts, RR: 0
Reply 6, posted (4 years 5 months 2 weeks 1 day ago) and read 14567 times:

Quoting MEA-707 (Reply 1):
The 747 rate makes sense, but the 777 has less then 300 orders left, 3,5 years of production with 7 a month. And most major airlines seem to have all the 777s they need, I don't see much follow on orders happening by say Singapore, American or JAL coming. I also don't expect major new 777 operators. This might be a sign there are big cargo orders coming.

This isn't just about "current" orders but future ones as well. The way Boeing sees it, if the backlog is shorter than say ordering a 330, a customer is more likely to order the 777. They are making themselves more competitive for the future...thumbs up to that.

An improving economy means airlines may try to quickly make up for lost profits quicker. This enables them to do that by ordering, receiving and placing their aircraft into service at (comparative) lightning speed.

Boeing is in a good position coming into 2010. They have cash in the bank, the write off's from 787/748 are in the past and they could effectively consume their competition if they position themselves correctly in coming years.

Airbus, consquently, is short of cash, in the middle of building a completely new aircraft and is "stuck" working out how they will pay for all this. Boeing sees this and will become more aggressive.



757: The last of the best
User currently offlinePM From Germany, joined Feb 2005, 6889 posts, RR: 63
Reply 7, posted (4 years 5 months 2 weeks 23 hours ago) and read 14301 times:

Quoting manfredj (Reply 6):
Boeing is in a good position coming into 2010. They have cash in the bank, the write off's from 787/748 are in the past and they could effectively consume their competition if they position themselves correctly in coming years. Airbus, consquently, is short of cash, in the middle of building a completely new aircraft and is "stuck" working out how they will pay for all this.

You've been reading GLG. Even worse, you believe it!  

Where to start,,,?  
Quoting manfredj (Reply 6):
the write off's from 787/748 are in the past

But the A380 losses aren't?

Quoting manfredj (Reply 6):
if the backlog is shorter than say ordering a 330, a customer is more likely to order the 777

So Malaysian (15) and China Eastern (16) announced orders for A330s at the tail end of 2009 because they really wanted 777s but the waiting list was too long? I see...

And Saudi Arabian really wanted more 777s but couldn't wait that long and so ordered A330s?

And Korean Air? And - well, all the airlines that have been grudgingly making the A330 the third best-selling widebody in history?

(You don't think that - just maybe - the A330-200 and A330-300 are better suited to certain routes and markets than the 777-300ER? Are we (=you) really comparing apples and apples here?)

Quoting manfredj (Reply 6):
ordering, receiving and placing their aircraft into service at (comparative) lightning speed

Pray tell how close to "lightning speed" you could receive a 747, 767, 777 or 787 (or A330 or A340 or A380 or A350) if you ordered it tomorrow.

Quoting manfredj (Reply 6):
Airbus [...] is [...] in the middle of building a completely new aircraft.

No. Airbus is in the early stages of building a completely new aircraft. Boeing is closer to being "in the middle of building a completely new aircraft". Neither has yet delivered a single one.

Airbus have two big money-making lines - the A320 and A330 (with a handful of A340s on top.)
Boeing have two big money-making lines - the 737 and 777.

Thereafter, Airbus have the A380 and Boeing have the 767 and 747, none of which makes a huge difference to anyone's bottom line.

Airbus have a four-figure backlog and steady, robust sales. Deliveries of 787s from late this year (we hope!) will give Boeing a leg-up for a couple of years but the idea that we are about to witness one OEM eclipsing the other is as fanciful as it is undesirable.

You know what? Anyone who posts here and seems to water at the mouth at the prospect of either Seattle or Toulouse going out of business really is in the wrong place.

I find myself often defending Airbus because it is Airbus that is most often unfairly maligned. But I never miss a chance to record my admiration for the 757 and, living in Japan, I'm thrilled that I might fly on a 787 before the end of the year, and I've still flown on way more Boeings (and enjoyed these flights) than I have Airbuses.

Why would anyone who has coughed up $25 to post here want to see either Boeing or Airbus go bust? It's bizarre.


User currently offlinepnwtraveler From Canada, joined Jun 2007, 2235 posts, RR: 12
Reply 8, posted (4 years 5 months 2 weeks 23 hours ago) and read 14176 times:

I suspect the 748 line increase has something to do with hinted orders in negotiations that Boeing has said could be forthcoming in the next or third quarter. Perhaps one being the not so secret Asian airline order we have yet to see be announced. It could be a decent size.

There are still some 777 options out there that with an improvement in the market could be exercised beyond any new orders for a 777NG or EW or whatever it ends up being. The iimproved hot and dry performance appears to be directed at the remaining A343/5/6 customers so Boeing may have some buyers they are talking with about that. Also airlines might not be willing to consider an improved version if the delivery dates are too far out.

No doubt the A330 has benefited from the delays in getting the 787 delivered, perhaps Boeing is now looking to do the same thing with the 777 and the A350.


User currently offlineBongodog1964 From United Kingdom, joined Oct 2006, 3572 posts, RR: 3
Reply 9, posted (4 years 5 months 2 weeks 22 hours ago) and read 13987 times:

Quoting manfredj (Reply 6):
Boeing is in a good position coming into 2010. They have cash in the bank, the write off's from 787/748 are in the past and they could effectively consume their competition if they position themselves correctly in coming years.

Airbus, consquently, is short of cash, in the middle of building a completely new aircraft and is "stuck" working out how they will pay for all this. Boeing sees this and will become more aggressive.

It is good news for aviation as a whole that Boeing are confident enough to increase production, it must however be borne in mind that this equates to a total increase of 30 frames per year, with the majority of it only making up for a cut which is at present being implemented.

To present it as a major coup for Boeing, and potentially leading to "they could effectively consume their competition" is pure fantasy.

Why do some people take every Airbus of Boeing press release as an opportunity to predict doom for the other ?

As to the financial predictions, once the 787 and 748 are being delivered to schedule and being paid for, we can all safely predict that the write offs are in the past. Just remember that we thought the A380 was sailing through its test programme at one point.
Meanwhile how can Airbus be "stuck" working out how to pay for the A350, when every US expert knows that they have an EU chequebook in the desk drawer with the cheques already signed and just the amount to fill in ?


User currently offlinekanban From United States of America, joined Jan 2008, 3507 posts, RR: 27
Reply 10, posted (4 years 5 months 2 weeks 20 hours ago) and read 13607 times:
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748 increase is expected as the a/c enter flight test... the rate was held low to preclude large numbers of a/c that could not be delivered until cert was complete. Everett may be big however with both the 748 and 788 lines pumping out a/c needing to wait for delivery they will run out of ramp space

777 increase probably is to open positions earlier to accomodate potential sales, however they may be wanting to reduce the backlog to begin work on significant upgrades like the bigger wing and be able to slot in those test a/c.

Boeing is very cautious on rate changes because they no longer have parts inventories everything is Just-In-Time.. and when landing gear manufacture/assembly flowtime takes in excess of 2 1/2 years you don't throw the switch either way at a whim.


User currently offlineseabosdca From United States of America, joined Sep 2007, 5410 posts, RR: 4
Reply 11, posted (4 years 5 months 2 weeks 19 hours ago) and read 13401 times:

Quoting PM (Reply 7):
Thereafter, Airbus have the A380 and Boeing have the 767 and 747, none of which makes a huge difference to anyone's bottom line.

I agree with most of your analysis, but don't forget that whatever 767 deliveries occur today are pure profit. The 767 is a bigger short-term moneymaker for Boeing than you might think, and will make a material difference if the tanker drama ever gets resolved in Boeing's favor.


User currently offlineBongodog1964 From United Kingdom, joined Oct 2006, 3572 posts, RR: 3
Reply 12, posted (4 years 5 months 2 weeks 18 hours ago) and read 13254 times:

Quoting seabosdca (Reply 11):
I agree with most of your analysis, but don't forget that whatever 767 deliveries occur today are pure profit. The 767 is a bigger short-term moneymaker for Boeing than you might think, and will make a material difference if the tanker drama ever gets resolved in Boeing's favor.

Nothing in manufacturing is ever "pure profit", as materials and labour are involved. The 767 may well have reached the stage where its low production rate increases costs, as it not only takes up a lot of factory space, the staff lose their efficiency, materials cost more due to the low volume, and due to the lengthy time since tooling up, the jigs and tools start to wear out


User currently offlineoykie From Norway, joined Jan 2006, 2732 posts, RR: 4
Reply 13, posted (4 years 5 months 2 weeks 18 hours ago) and read 13053 times:

Quoting Stitch (Reply 4):
Part of the 747-8 program's recent write-off was due to the planned production drop to 1.5 a month from 2. Now that Boeing is returning to 2 per month, I wonder how that will (positively) affect future quarters?

As others have noted, do we see a larger order coming soon? Anyway interesting.

Quoting PM (Reply 5):
We shouldn't be surprised. The 777, even without any makeover, still has a lot of life in it.

   I must say it was interesting to see the interview with Tim Clark in the latest ATW issue in regards of the 777. He hopes Boeing can get more than 4% in better fuel economy. He hopes the 777-200LR will be stretched to a 777-250 sized between the current -200 and 300, and then stretch the -300ER to a -400 machine. He used the term 777-250 and 777-400ER to show how he would like the future 777 to be sized relative to the current models.



Dream no small dream; it lacks magic. Dream large, then go make that dream real - Donald Douglas
User currently offlineEA772LR From United States of America, joined Mar 2007, 2836 posts, RR: 10
Reply 14, posted (4 years 5 months 2 weeks 17 hours ago) and read 12078 times:

Quoting oykie (Reply 13):
I must say it was interesting to see the interview with Tim Clark in the latest ATW issue in regards of the 777. He hopes Boeing can get more than 4% in better fuel economy. He hopes the 777-200LR will be stretched to a 777-250 sized between the current -200 and 300, and then stretch the -300ER to a -400 machine. He used the term 777-250 and 777-400ER to show how he would like the future 777 to be sized relative to the current models.

I'd guess that EK would be a launch customer for the 777EW. I wonder if we'll see BA or QF show any interest in the 777EW. As far as the production rates go, I'm glad to see that Boeing is increasing both. A we all know, production and availability go hand in hand and can work to Boeing's favor.



We often judge others by their actions, but ourselves by our intentions.
User currently offlineBrouAviation From Netherlands, joined Jun 2009, 985 posts, RR: 1
Reply 15, posted (4 years 5 months 2 weeks 17 hours ago) and read 12001 times:

Quoting PM (Reply 7):

No. Airbus is in the early stages of building a completely new aircraft. Boeing is closer to being "in the middle of building a completely new aircraft". Neither has yet delivered a single one.

I agreed with you on your whole post, but don't agree with you here. Could you please elaborate more on why you think this? Because when I look at how much time building a completely new aircraft takes, and then add to that the starting points of both aircraft, the 787 is quite close to the end, while the A350 being in the middle of the process.

Quoting PM (Reply 7):
Boeing have two big money-making lines - the 737 and 777.

With the 787 soon to be added.

Quoting PM (Reply 7):
Why would anyone who has coughed up $25 to post here want to see either Boeing or Airbus go bust? It's bizarre.

Indeed it is. The world would be extremely boring with only B or A around, especially all the nice airshows at Farnborough, Dubai, Le Bourget, Berlin and so forth. Luckily, we also have Embraer, Sukhoi, Mitsubishi, Bombardier, Dassault and the likes around, so a world with one big aircraft builder is far away. If only Lockheed and Douglas were still around..  



Never ask somebody if he's a pilot. If he is, he will let you know soon enough!
User currently offlinefrmrCapCadet From United States of America, joined May 2008, 1714 posts, RR: 1
Reply 16, posted (4 years 5 months 2 weeks 15 hours ago) and read 10876 times:

Aren't both A and B at this point generally at the point of not being able to sell more products in the next five years because of prior committments?


Buffet: the airline business...has eaten up capital...like..no other (business)
User currently offlineVC10er From United States of America, joined Feb 2007, 2887 posts, RR: 10
Reply 17, posted (4 years 5 months 2 weeks 14 hours ago) and read 10231 times:
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In Boeings release they mention 747-8. Does that mean they expect more of the pax version being ordered or are these most cargo?


The world is missing love, let's use our flights to spread it!
User currently offlineJacobin777 From United States of America, joined Sep 2004, 14968 posts, RR: 60
Reply 18, posted (4 years 5 months 2 weeks 14 hours ago) and read 10229 times:

Quoting kanban (Reply 10):
748 increase is expected as the a/c enter flight test... the rate was held low to preclude large numbers of a/c that could not be delivered until cert was complete. Everett may be big however with both the 748 and 788 lines pumping out a/c needing to wait for delivery they will run out of ramp space

777 increase probably is to open positions earlier to accomodate potential sales, however they may be wanting to reduce the backlog to begin work on significant upgrades like the bigger wing and be able to slot in those test a/c.

Boeing is very cautious on rate changes because they no longer have parts inventories everything is Just-In-Time.. and when landing gear manufacture/assembly flowtime takes in excess of 2 1/2 years you don't throw the switch either way at a whim.

....interesting thoughts...  



"Up the Irons!"
User currently offlineStitch From United States of America, joined Jul 2005, 30908 posts, RR: 87
Reply 19, posted (4 years 5 months 2 weeks 14 hours ago) and read 10147 times:
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Quoting VC10er (Reply 17):
In Boeings release they mention 747-8. Does that mean they expect more of the pax version being ordered or are these most cargo?

Boeing has been hinting at a third 747-8 customer preparing to place an order.

Though frankly if it was just 747-8Fs, that would still be a good sign considering the current state of the cargo market.

[Edited 2010-03-19 16:58:36]

User currently offline7673mech From United States of America, joined Mar 2004, 721 posts, RR: 0
Reply 20, posted (4 years 5 months 2 weeks 13 hours ago) and read 9577 times:
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This was a Boeing story, why did Airbus have to be drawn in PM?
Seriously, it's stuff like this, that makes this website intolerable for those of us who work and enjoy the industry.

Good for Boeing and their customers. Can we not leave it at that?

I am so not renewing next month, these childish arguments ruin this site.


User currently offlinePM From Germany, joined Feb 2005, 6889 posts, RR: 63
Reply 21, posted (4 years 5 months 2 weeks 12 hours ago) and read 9249 times:

Quoting 7673mech (Reply 20):
This was a Boeing story, why did Airbus have to be drawn in PM?

I dunno. Why don't you ask the guy in post #6 who did it?  


User currently offlinealwaysontherun From Netherlands Antilles, joined Jan 2010, 464 posts, RR: 0
Reply 22, posted (4 years 5 months 2 weeks 11 hours ago) and read 8801 times:

Quoting 7673mech (Reply 20):
This was a Boeing story, why did Airbus have to be drawn in PM?

That would be ManfredJ, the Airbus basher……….he´s well known for it.

Quoting PM (Reply 7):
Why would anyone who has coughed up $25 to post here want to see either Boeing or Airbus go bust? It's bizarre.

Yep………….

Quoting 7673mech (Reply 20):

I am so not renewing next month, these childish arguments ruin this site.

Don´t let people like that spoil your fun, please mate!
The majority of the posts are genuine and informative, I find.

### "I am always on the Run"###



"Failure is not an option, it comes standard in any Windows product" - an anonymous MAC owner.
User currently offlineBongodog1964 From United Kingdom, joined Oct 2006, 3572 posts, RR: 3
Reply 23, posted (4 years 5 months 2 weeks 8 hours ago) and read 8031 times:

Quoting Jacobin777 (Reply 18):
Boeing is very cautious on rate changes because they no longer have parts inventories everything is Just-In-Time.. and when landing gear manufacture/assembly flowtime takes in excess of 2 1/2 years you don't throw the switch either way at a whim.

....interesting thoughts...

The airframe manufacturers are of course far more adept now at "just in time" procurement as is almost all of industry. It would however be wrong to imply that they once held inventories of parts such that they could make quicker changes to production rates. To the best of my knowledge the expense and complexity and custom design of aircraft has always resulted in most parts being ordered either to meet known production, or in defined batch quantities with a "call off rate"
Of course lead times tended to be lower, as things were once less complex.


User currently offlinePM From Germany, joined Feb 2005, 6889 posts, RR: 63
Reply 24, posted (4 years 5 months 2 weeks 3 hours ago) and read 6867 times:

Quoting seabosdca (Reply 11):
The 767 is a bigger short-term moneymaker for Boeing than you might think

I don't doubt that it has paid for itself long ago but I struggle to think of it as major money-maker now. Output has been just one a month for several years and it isn't going to go up. Moreover, at least some of the recent orders (I'm thinking of ANA and JAL) are in part compensation for late delivery of 787s. That must wipe out some of the profit.

Quoting BrouAviation (Reply 15):
Could you please elaborate more on why you think this?

Well, Boeing have four 787s flying now and have a fighting chance of delivering a few this year and that's well ahead of the A350 but I can't subscribe to the argument that their journey is nearly over whereas Airbus are only half-way. After the -8, Boeing must turn their attention to the -9 and then decide if and how they'll do a -10. And that's just the three main models that have so far been talked about. And no doubt they'll be working for years on improving the basic design. Airbus have a similar road ahead. Get the first planes built and flying. Then work on versions #2 and #3. Then develop the whole concept further. Both companies still have years of developmental work ahead of them and will need to pay for it.

(But I could be wrong.)  
Quoting BrouAviation (Reply 15):
With the 787 soon to be added.

Indeed. Hence...

Quoting PM (Reply 7):
Deliveries of 787s from late this year (we hope!) will give Boeing a leg-up for a couple of years


25 Post contains images astuteman : My understanding from the article is that this is an advancement of increases that have already been planned - the 777 ramp-up being advanced by 6 mo
26 Post contains images CharlieNoble : I agree with this 100% PM. Neither of these companies could be as great as they are without competition from the other! In fact I believe that withou
27 Post contains images Jacobin777 : ...true, but I'm not so sure that's what the poster was leading us to believe.....regardless, I'm happy to see more B777's being cranked out.. ......
28 manfredj : Perhaps everyone could explain why Boeing is ramping up production? Harrod's is thinking of coming out with a new line of 300 passenger airplanes and
29 PM : I'm guessing because they believe there is a market to sell and deliver more planes than at current rates. What's your theory? But you (YOU) did ment
30 Post contains images astuteman : I know full well what ignorance is, my friend. Ignorance is stating three blatant falsehoods (inflamatory ones too IMO) in one paragraph and then ped
31 AirNZ : But the thread title relates specifically to Boeing increasing production. I don't see where you were discussing this aspect without bringing your us
32 kanban : When I was first with Boeing we were building white 727's no customer allocation. they had about 10 different customer variable options in kit form s
33 Bongodog1964 : Hpw could keeping 6 - 10 sets of high value parts in stock enable a meaningful change to production rates, particularly when you state that this woul
34 kanban : the inventory made increasing the rates easier and storage space made slowing down easier. the engine manufacturers usually could match rates fairly
35 Post contains images astuteman : And for me, at least, that is clearly spelt out in the article. This announcement advances already planned production rate changes. From your comment
36 BMI727 : Neither manufacturer can dominate the market without the other's permission. In a market like this, what one player does is either affected by or aff
37 osteogenesis : No need for that. You have been providing a lot of it.
38 alwaysontherun : Touché! Like you attack Airbus in this thread for no reason? Count me in Astute! ### "I am always on the Run"###
39 kanban : like what? when members with ACTUAL experience the process post that this is a normal well planned exercise that (at least for the 747-8) was planned
40 tdscanuck : Now that they're almost assured to get the tanker contract, the 767 rate will go up. Because of the way program accounting works, it doesn't actually
41 travelhound : I got the impression from the Dominic Gates / Jim Albaugh interview that Boeing are going to be a little bit more aggressive on the sales front. I am
42 Bongodog1964 : I will fully agree with you on that, in my previous industrial experience, I was often on the messy end of salesmans promises/demands. We had a produ
43 PM : I understand that. Bottom line, it won't greatly affect the bottom line. Which was my point.
44 SEPilot : The problem I see is that aircraft orders have to be several years in advance, especially with the backlogs that exist for both manufacturers, while e
45 BMI727 : Because neither manufacturer exists in a vacuum. Anything one does affects the other. It is certainly acceptable todiscuss how any decision from one
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