planemaker
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777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 4:18 am

Interesting Seattle Times article about how the 777 costs too much and how Boeing is working to cut costs on its 777 program so it can sell the plane at a lower price, especially because recently the 777 has lost market share to Airbus. Boeing hopes to shrink the time it takes to assemble each 777 from 26 days to just eight.

Some article extracts:

"This is the premier twin-aisle airplane in the world," Dan Becker, the man in charge of all the airplane programs in Everett, told a group of employees last summer at a private presentation.

Then he added: "It has only one problem. It costs too much."

"This morning we lost a big one," Becker told the employees. "We have been competing for that contract for a year, and the reason that we didn't get the 777 in there is because, even going lower than we've ever gone before, we couldn't compete on price."

"If we choose to not reduce the cost, we seal our fate at two or three a month," he said. "If we can figure out how to reduce the cost, we have the possibility of building seven a month again."

"The 777 is Boeing's one true killer app," said Richard Aboulafia, an industry analyst with the Teal Group. He describes the basic 777-200 as the "single best plane in its class."

http://seattletimes.nwsource.com/html/businesstechnology/2002108087_777boeing03.html
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ConcordeBoy
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 6:23 am

The 777 is always going to sell for a premium (even relevant to its costs) over their counterpart A330/A340s.... mostly based on simple performance superiority in nearly all cases, varying in severity from model to model.

It is however, good to see Boeing trim fat around the edges... they can't afford to lug it around in this market.
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MidnightMike
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 6:38 am

The 777 will cost you less over the long term.....
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blsbls99
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 6:56 am

Making the 777 more affordable to the world's airlines is exactly what Boeing needs to do. It does seem that Airbus has an advantage in cost lately. And purchase price is playing a much bigger role (or seems to be) lately in aircraft acquisitions.
And not to knock the competition, but the 777 does seem to be the leader in performance levels.
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DfwRevolution
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 7:03 am

Does anyone see this as a sign that the 777 is starting to show its age? Most of the major demand for 300 seat B-market aircraft has been fulfilled, and I doubt there will be any mega orders for the 772ER anytime soon. The best Boeing can hope for are add-on orders... lowering prices can help these orders trickle in.

Also... taking a thorough look at the 777 production might open some opportunities to incorperate more efficent technology.
 
AA54Heavy
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 7:03 am

"The 777 will cost you less over the long term....."

Not that I'm an expert by any stretch of the word, but according to the post regarding NWA (maybe there's like 2 of them now) and the 777 vs. A330, it mentioned that NWA determined that even the performance of the 777 wouldn't out weigh the initial costs, etc., so that's why they went with the A330.....I don't know, up for debate
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scbriml
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 7:33 am

The 777 will cost you less over the long term.....

Not true in all cases. See the in-depth NW analysis of the A333 vs 772ER in this thread - http://www.airliners.net/discussions/general_aviation/read.main/1845487/

Horses for courses. If you can't fill the extra seats in the 772, then it costs you big time.
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A350
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 7:47 am

The best patry finishes. The 777 is a great aircraft and maybe the best flying, no doubt, however it is more than 10 years old. What Boeing really needs is to speed up the 7e7-9. THIS is the new killer in the 300 seat class Boeing so urgently needs. Furthermore, together with the 7e7-8, it offers one aircraft family doing both the jobs of the 777 and the job of the 767. Theoretically, north amercian carriers need, due to their fleet structure, no other widerbody than the 7e7 AT ALL.

A350
 
DfwRevolution
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 7:52 am

What Boeing really needs is to speed up the 7e7-9. THIS is the new killer in the 300 seat class Boeing so urgently needs.

The 7E7-9 would only seat 260 in a 777-like configuration, it's much too small to fulfill the bulk of 772ER functions.

Furthermore, together with the 7e7-8, it offers one aircraft family doing both the jobs of the 777 and the job of the 767.

Never! the 7E7 doesn't come remotly close to the MTOW/payload of the 772ER, 772LR, 773A, 773ER.... the 7E7 and 777 complement each other. The 7E7 can't displace the 777 anymore than the 737NG can displace the A330.

It is plausable that a few airlines might simplify to just the 7E7, but the bulk of 777 carriers wouldn't even considering replacing the 772ER with 7E7-9....

Theoretically, north amercian carriers need, due to their fleet structure, no other widerbody than the 7e7 AT ALL.

The 777 is a profit machine for CO and AA... placing an aircraft with fewer premium seats or less payload would be a grave mistake just to save some bucks on maintenance.
 
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N328KF
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 7:56 am

A350:

For the second time...you are on crack. The 7E7-9 does not come anywhere near the capacity of the 777, particularly the -300ER, nor the range of the -200LR. The 777 is also not "old technology." The airframe is just as current as anything Airbus is currently selling, and the engine technology (particularly the GE90-11xBs) is thoroughly modern.
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ConcordeBoy
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 8:00 am

it mentioned that NWA determined that even the performance of the 777 wouldn't out weigh the initial costs, etc

You're leaving out some important information here, relative to that analysis, though...


First off-- NW said that the PW-powered 772A was out of the question because it couldn't op Transpacs and offer limited payload on some of their longer AMS runs. Then, the performance of the PW-powered 772ER was paltry on Transpacs, but overkill on TransATL. Add to that the fact that maintenance on non-PW powered birds would skyrocket the longterm costs, and a combo order of 772A and 772ER wasn't price competitive.
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atmx2000
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 8:26 am

The problems for the 777-200 family seem to lie at the midrange end of the market. The 777-200ER is strong in the longer range market where it competes with the A343, but it is weak in middle range market where the 772A and ER compete with the A333. Either Boeing finds a way to cut the operating costs to justify a higher price, or it should cut find ways of cutting the purchase cost of the aircraft.

Boeing could improve operating costs are by getting more efficient engines on the 772A and by cutting the weight. Maybe it is time for Boeing to consider modifying the 772 airframe by incorporating more composites. If Boeing could get the weight down maybe the highest thrust variants of 7e7 engines would be suitable for a new short range 772. Or alternatively, Boeing should target the A333 market with a stretch of 7E7-9. Would the 7e7-8 and 9 wing be suitable for a further stretch? Boeing would of course cannibalize 772 sales if the range came too close, or if the price was much better. But Boeing should be worried about what the A333/A343 and A350-900 means to the 772 series.
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zvezda
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 8:27 am

The B777 is as modern as any airliner other than the B7E7, with the arguable exception of yoke vs. joystick.
 
planemaker
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 9:04 am

The 777 is always going to sell for a premium...

Boeing doesn't have any other choice -- for the moment at least...

"We have been competing for that contract for a year, and the reason that we didn't get the 777 in there is because, even going lower than we've ever gone before, we couldn't compete on price."

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Aither
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 9:19 am

This guy they mention in the article, Richard Aboulafia, i don't know who he is except he's an "independant expert". But i've read many articles mentioning Aboulafia and he's always bashing Airbus or saying how great is Boeing. I wonder who he really is...
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N1120A
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 9:25 am

>Not true in all cases. See the in-depth NW analysis of the A333 vs 772ER in this thread - <

The A333 and 772ER are there to fill completely different missions. The 772ER can fly almost twice as far while carrying more passengers and cargo.

>The B777 is as modern as any airliner other than the B7E7, with the arguable exception of yoke vs. joystick.<

The yoke v. sidestick is not a question of modernity, or else the C152 would be a very modern airliner. This is a question of choice, some people like one and some the other
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planemaker
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 9:50 am

Richard Aboulafia, i don't know who he is except he's an "independant expert". I wonder who he really is...

You can go to http://www.tealgroup.com to find out. BTW, he also writes all the the "Outlooks" for the AW&ST Annual Aerospace Source Book.
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N328KF
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 10:01 am

Aboulafia is in lots of stuff. He's been in the WSJ, too. I personally think he's full of it much of the time, but he's definitely widespread.
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A350
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 10:09 am


The 7E7-9 would only seat 260 in a 777-like configuration, it's much too small to fulfill the bulk of 772ER functions.

Of course, it's not the same size, but I think these 40 seats are normally not that issue. It's 15%.


Never! the 7E7 doesn't come remotly close to the MTOW/payload of the 772ER, 772LR, 773A, 773ER.... the 7E7 and 777 complement each other.

Well, I had the 772ER in mind, not the NGs.

MTOW!=payload since the 7e7 is lighter. The 7e7 has 500nm more range than the 77ER, so it will carry approx. as much freight.


It is plausable that a few airlines might simplify to just the 7E7, but the bulk of 777 carriers wouldn't even considering replacing the 772ER with 7E7-9....
...
The 777 is a profit machine for CO and AA... placing an aircraft with fewer premium seats or less payload would be a grave mistake just to save some bucks on maintenance.


The 7e7-9 will become the new profit machine with 15% less seats, compareable payload and unbeatable effeciency.

They will not suddenly give the 777s away, but I can imagine DL selling their 8 if they get a good offer and I can imagine AA changing the shifted orders to 7e7s

BTW: interesting situation for me here to advertise the 7e7, but I think Boeing has well looked at the needs of carriers, especially the american ones.

A350
 
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 10:52 am

Does anyone see this as a sign that the 777 is starting to show its age?

The 777 is a great aircraft and maybe the best flying, no doubt, however it is more than 10 years old.


Am I the only one sick and tired of this age bullshit? My God people get over it. Check your sources and see what the age of other "modern" airliners are.  Yeah sure
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A350
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 11:07 am

Am I the only one sick and tired of this age bullshit? My God people get over it. Check your sources and see what the age of other "modern" airliners are.


Isn't there a Chicago-based company which claims that technology has advanced in such a revolutionary way in the last decade that only a clean sheet design can get the full advantages of it  Confused

A350
 
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 11:19 am

A350:

The point that has been explained to you (and that you seem to be missing) is that the 7E7 and 777 serve different markets. The top end of one airliner's market butts up against the bottom end of the other.
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PPVRA
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 11:23 am

Of course, it's not the same size, but I think these 40 seats are normally not that issue. It's 15%.

That is indeed a very interesting point, 15% more economy PAX does not make up for 20% overall better efficiency...

MTOW!=payload since the 7e7 is lighter. The 7e7 has 500nm more range than the 77ER, so it will carry approx. as much freight.

Not the same volume, but I guess it could carry heavier cargo.

Isn't there a Chicago-based company which claims that technology has advanced in such a revolutionary way in the last decade that only a clean sheet design can get the full advantages of it

Not the point. No matter how much makeover you give the 767, it will not match the efficiency of the A330...it can come pretty close, but it's still not the same. Same thing happens with the "old" A330 and the new 7e7.

PPVRA
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A350
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 11:25 am

The point that has been explained to you (and that you seem to be missing) is that the 7E7 and 777 serve different markets. The top end of one airliner's market butts up against the bottom end of the other.


I'm not speaking about the size. I simply state that it is not logical to say on one hand that technology has advanced so fast that only an entire new design can get the all the benfits bout of it and on the other hand that a 15 year old design is still state of the art and nothing has improved since then.

A350
 
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N328KF
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 11:32 am

That's the other point. This is not your father's (or at least, older brother's) 777.
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tu154m
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 11:45 am

The only way it will ever get as cheap as Airbus is if it were to get subsidised. Since Boeing is a private company, ain't gonna happen...............Boeing will never be able to compete with Airbus on this level. The common cockpit Airbus has doesn't really persuade airlines to get an expensive airplane which also would require a totally different cockpit crew(another pay scale), and more training.
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PPVRA
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 11:48 am

Tu154m,

Please don't go there...

PPVRA
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mdsh00
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 11:53 am

Isn't there a Chicago-based company which claims that technology has advanced in such a revolutionary way in the last decade that only a clean sheet design can get the full advantages of it.

So then why isn't the A350 going to be a clean sheet design?
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greaser
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 1:03 pm

I'm not speaking about the size. I simply state that it is not logical to say on one hand that technology has advanced so fast that only an entire new design can get the all the benfits bout of it and on the other hand that a 15 year old design is still state of the art and nothing has improved since then.

I'm telling you if Boeing or Airbus were to operate like they way you want them to they would be bankrupt. THIS IS NOT THE CAR INDUSTRY. WE DO NOT CHANGE PLANE-LINES WHEN YOU FEEL IT'S NO LONGER 'NEW'.
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ConcordeBoy
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 1:26 pm

Boeing could improve operating costs are by getting more efficient engines on the 772A

Newer 772As already carry [derations of] the most modern engines available




and by cutting the weight.

The 772A is the base model of the family line.

It's very difficult to shrink the weight/dimensions of a base model widebody and create a sales success.... in fact, the A332 is the only example thereof that I can recall; and that took more than a half-decade to produce.
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fspilot747
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 2:06 pm

I feel old. I remember when the 777 rolled out like it was yesterday. It's still a brand new plane to me.
 
Thrust
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 2:09 pm

The 777 may not be new, but it ain't going away anytime soon either. Technically, it is still new, only 10 years in service, one of the newest aircraft types. Is the 773LR still going to be launched? Or does it all depend on the 772LR selling well first?
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DfwRevolution
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 3:45 pm

Technically, it is still new, only 10 years in service, one of the newest aircraft types. Is the 773LR still going to be launched? Or does it all depend on the 772LR selling well first?

There are no plans for a 773LR. The 773ER could sustain further MTOW boosts, but it will never enter the C-market that the "LR" suffix denotes.

Am I the only one sick and tired of this age bullshit? My God people get over it. Check your sources and see what the age of other "modern" airliners are.

Ten years of commercial service means the technology under the skin is pushing 15. It is aging mind you, it is not brand-new anymore, and just because other "modern" aircraft aren't as advanced doesn't mean Boeing can't raise the bar.

By taking a thorough look at the production stage of the aircraft, they can make many cost cutting improvements to the assembly process. Shaving a few hours off a certain task or using the input of customers to lighten the OEW in certain places lowers price and only helps the 777 sell more... and I thought that was the point....

THIS IS NOT THE CAR INDUSTRY. WE DO NOT CHANGE PLANE-LINES WHEN YOU FEEL IT'S NO LONGER 'NEW'.

True... but they make small tweaks to the line all the time. It would be foolish to say "oh well... this new tech would be great and easy to integrate, but we'll just wait to the next new product." Boeing is just looking to see what can be improved now that the 777 has been around the block a few times.

Of course, it's not the same size, but I think these 40 seats are normally not that issue. It's 15%.

The 777 are flagships for most airlines. This means they fly with as many premium seats as possible. For example, AA only seats 240 in their 772ER and simmilar configurations are not rare. Premium seats require more floor area but they bring in much more revenue. The 7E7-9 would seat less than 200 people in a configuration with that many premium seats, and would be an utter waste on trunk routes to LHR/SAO/NRT.

That is indeed a very interesting point, 15% more economy PAX does not make up for 20% overall better efficiency...

No... but 15% more premium passengers does make up for 20% overall fuel burn.
 
N1120A
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 3:54 pm

>That is indeed a very interesting point, 15% more economy PAX does not make up for 20% overall better efficiency...<

The 7E7 is not 20% more efficient than the 777, it is 20% more efficient than the 767 (a bit more than that on the A330). The 7E9 would likely have seat-mile costs roughly equivilant to the 772ER, but the 772ER would hold more passengers, which means more revenue.

>Ten years of commercial service means the technology under the skin is pushing 15. It is aging mind you, it is not brand-new anymore, and just because other "modern" aircraft aren't as advanced doesn't mean Boeing can't raise the bar.<

If that is the case, then the A330/A340 is almost 20 years old and the A320 25.
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atmx2000
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 4:25 pm

The 7E7 is not 20% more efficient than the 777, it is 20% more efficient than the 767 (a bit more than that on the A330). The 7E9 would likely have seat-mile costs roughly equivilant to the 772ER, but the 772ER would hold more passengers, which means more revenue

But the upfront cost of the 7e9 will likely be a lot lower per seat. There will be less debt burning a hole in the balance sheets of airlines as a result.
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777ER
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 5:38 pm

"This morning we lost a big one," Becker told the employees. "We have been competing for that contract for a year, and the reason that we didn't get the 777 in there is because, even going lower than we've ever gone before, we couldn't compete on price." Does anyone have any idea on what this lost bid was for?
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ConcordeBoy
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 5:40 pm

For example, AA only seats 240

...as little as 223 as some




Premium seats require more floor area but they bring in much more revenue

...as the segments increase in length that is.
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scbriml
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 6:12 pm

"This morning we lost a big one," Becker told the employees. "We have been competing for that contract for a year, and the reason that we didn't get the 777 in there is because, even going lower than we've ever gone before, we couldn't compete on price." Does anyone have any idea on what this lost bid was for?

777ER, read the article! It was an old quote from Farnborough talking about the loss of the competition for Etihad's order at that time (A330s, A340s & A380s). Obvioulsy, Etihad has subsequently placed a small order for 777s.
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baw716
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 6:37 pm

Hi everyone,
Is it me, or are the statistics and statements being made on this thread coming from any sources that are REAL? We know the 777 costs more than the A340. This is a function of two things: 1) Airbus has a lower cost base than Boeing (I'm not talking about subsidies...however, subsidies ARE an issue). 2) The 777 airframe is much larger than the A340. If we compare operating weights (which I haven't checked, so this is conjecture only), I would guess that the 777 has a base empty weight higher than the A340. Add to that engines that are massive, both in size and in thrust capacity and you get an expensive bird.

I need to read the NWA analysis of the A330 v. 777 to opine on the choice NW made to go with the Airbus v. the Boeing aircraft. One serious factor driving the NW decision is that they already had Airbus aircraft in their fleet. The only wide body Boeing they have is the 744. If you factor in training costs plus pilot costs based on aircraft weight (which is less on the 330), I would imagine that the 330 would cost less to operate than the 777 for Northwest and given their current concern regarding costs, I can see why NW would have chosen the 330 over the 777.

I just heard tonight that the head of Boeing Aircraft Sales was just fired. There is a great deal of conjecture as to why that happened; I suspect it had something to do with this subject.

I don't think that it is realistically possible to bring the cost of the 777 down to be competitive with Airbus without a redesign of the aircraft. That would mean additional costs and that does not make an aircraft cost less. From a sales perspective, what Boeing should be doing is continuing to help airlines make FLEET decisions, in which the family concept can be brought to bear on how an airline can position its fleet in such a way that the Boeing product can be more competitive with Airbus. The 7E7, depending upon how things shake out, will have a great deal to do with Boeing's wide body future. However, it also appears that it now is going to be delayed another year, so it won't be until 2009 potentially before that aircraft goes into service. This is not good news, especially with the closure of both the 757 and 767 lines.

In another five to seven years, airlines who currently have both Boeing and Airbus aircraft are going to start having to replace aircraft. It is this time that Boeing needs to prepare for. If it can regain the leadership in the "family" concept (which Airbus has effectively taken from them), then Boeing can cut deals on various sizes of aircraft for fleet replacement, taking in the old aircraft and reselling them on the used market (which it does now).

Boeing has had a tremendous history of building "leader" aircraft. The 707, 727, 737, 747, 757, 767 and the new 777 are that legacy. With the third generation of 737 on the books, the 787 (now called E7) and the 777s will form the backbone of the family for the next 20 years. The 747 will be the A380 equivalent (if you can actually say that...), if they redesign it for more pax and higher gross weights and larger engines and a redesigned wing, then the 747 concept could go on easily another 20 years, without having to redesign another jumbo.

However, I rather think that the 777, with its capacity to be a high density short range aircraft, a medium range 300 seat aircraft, a ultra long range 300 seat aircraft, a ER range 400 seat aircraft, and potentially a LR 400 seat aircraft, there are enough derivatives of that airframe that the flexibility it offers would be vastly superior to that of Airbus.

Lastly, lets remember one thing: Airbus tends to overpromise and under deliver (they are having that problem now with both the A340-500 and 600). Boeing has consistently been conservative in its estimates and let the bird do the talking. If Boeing can revise the fleet sales concept, get the 87 built and solidify the 777, then with creative financing, there should be some way to get this aircraft to be less upfront cost for the carriers.

The price of anything is based on how you can structure the deal to work for both sides. In this regard, hopefully Boeing will find someone creative enough to make that happen. Airlines should not be turning down the 777 simply because it is too expensive.

David L. Lamb, fmr Area Mgr Alitalia SFO 1998-2002, fmr Regional Analyst SFO-UAL 1992-1998
 
ConcordeBoy
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 7:08 pm

If we compare operating weights (which I haven't checked, so this is conjecture only), I would guess that the 777 has a base empty weight higher than the A340.

Wrong.

The A345/A346 are SIGNIFICANTLY heavier (in empty weight and MTOW) than their 777 counterparts, yet the twins are listed for SIGNIFICANTLY higher prices.

Performance does indeed play a role in that premium, as much as production cost.
Faire du ciel le plus bel endroit de la terre c'est impossible sans Concorde!
 
scotron11
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 8:55 pm

I know a $20M price difference works favor of Airbus, but what about the recent slide in the dollar?

According to recent reports, the dollar is currently down approx 35% against the euro, so wouldn't that give a slight advantage if not parity? Or does Airbus price their products in dollars thereby negating the advantage? Even if they do price in dollars, there has to be a conversion to the euro somewhere.
 
ConcordeBoy
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 9:01 pm

Or does Airbus price their products in dollars

Bingo
Faire du ciel le plus bel endroit de la terre c'est impossible sans Concorde!
 
scotron11
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 9:09 pm

Thanks for that. Which means, any sale that Airbus is currently making is costing them money, yes? If that is the case, I can see why Boeing is pissed!
 
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glideslope
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 9:52 pm


The conversion to Euros is assisted by the EU taxpayer. But then again the US is letting the dollar drop to secretly try and write off some of our debt.

A dangerous game on both sides of the pond.  Smile
To know your Enemy, you must become your Enemy.” Sun Tzu
 
StickShaker
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RE: 777 Has Just One Problem: It Costs Too Much

Sat Dec 04, 2004 11:25 pm

it is not logical to say on one hand that technology has advanced so fast that only an entire new design can get the all the benfits bout of it and on the other hand that a 15 year old design is still state of the art and nothing has improved since then

Any assessment of ageing of a particular aircraft or its technology is always based on what the competition is offering. While the 777 has been around for a while it is still very competitive against Airbus equivalents in performance terms. On the other hand the relatively young A332 suddenly seems aged when placed alongside the 7e7. The 777 has yet to have its first makeover - contrast this to the 737/747 which have had several.
Boeings problems with the 777 are not related to technology or performance but to the cost of manufacturing the aircraft. The 777 is likely to exist in its present form for some time - any revamp is in the queue behind the 7e7/747Adv/737. This order is unlikely to change unless the B777 starts to lose market share to Airbus products.

It is interesting to speculate just how the 777 would be revamped when the time comes - new wing and engines or perhaps some major composite structures as with the 7e7. Again - the level of technology employed and expense will depend on what the competition is offering.

Cheers,
StickShaker
 
phollingsworth
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RE: 777 Has Just One Problem: It Costs Too Much

Sun Dec 05, 2004 1:07 am

A few of observations:

1. From everything I have seen it currently costs Boeing more per airframe, fully amortized, to produce and aircraft than it does for Airbus.

2. Airbus has a higher structural minimum production level than Boeing does. This stems from labor market inflexibilities in the EU. Note, Boeing's ability to change production levels on a whim is part of what leads to its higher cost structure.

3. Airbus can borrow money at a lower interest rate than Boeing. This is partially driven by the government backing of Airbus's R&D loans, which effectively eliminate all risk and remove them from the open market.

This means that Airbus has to fill more delivery slots than Boeing does. It also means that the cost of filling those slots over letting them sit idle is also significantly lower at Airbus. This means they can discount their airframes even more significantly, i.e., as long as the selling price is higher than the marginal cost increase to fill a previously open slot a profit will be made. This is the same reason that filling the last 30 seats on a 777 at a loss is better than leaving them open.

Airbus's ability to borrow money cheaper helps them market their already lower priced aircraft more effectively.

Because of this Boeing needs to significantly reduce the production cost of their aircraft to match where Airbus is. In fact they have to produce their aircraft a fair bit cheaper than Airbus to even the marketing playing field where price matters and marginal cost is king. This produces a significant conundrum for Boeing because it costs a fair bit of money to lower your production costs, which cuts into profits or increases your debt.

On the airline side, airlines have proven remarkably incompetent at predicting which aircraft and operations model makes the best economic sense. In the case of Northwest's purchase of the A330 over the B777 in
>
These decisions were made looking forward, and therefore, cannot really be used to prove that the A330 is better for Northwest than the 777 would be. If as one poster in that thread states Northwest is leaving profit making cargo on the ground to fly the pacific routes with their A332s then it would make sense to reevaluate their original decision.

Further, one of the comments that NW made with respect to the 772ER on the Pacific routes shows that they had significantly downscoped their region of investigation by pre-choosing the PW powerplants.
"- The range capability of the PW4090 powered 777-20ER is insufficient to be considered as a suitable replacement for the Pacific"

As for the technology on the 772LR/3ER, the GE90-11XB engines are in almost all respects the most technically advanced non-military propulsion systems every developed (Though the Rolls Trent 500s on the A345/6 are also up there). These two engines will only be surpassed by the GP7000 and the RR Trent 900s. Of course the Trent 1000 and the GENX are going to push the envelope even further.
 
Boeing Nut
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RE: 777 Has Just One Problem: It Costs Too Much

Sun Dec 05, 2004 6:12 am

Mdsh00, welcome to my respected users list. Nice reply.
I'm not a real aeronautical engineer, I just play one on Airliners.net.
 
mdsh00
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RE: 777 Has Just One Problem: It Costs Too Much

Sun Dec 05, 2004 9:22 am

Thanks Boeing Nut! I'm not an Airbus hater but a hypocritical statement needs to get called on.
"Look Lois, the two symbols of the Republican Party: an elephant, and a big fat white guy who is threatened by change."
 
Boeing Nut
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RE: 777 Has Just One Problem: It Costs Too Much

Sun Dec 05, 2004 10:00 am

I'm not an Airbus hater but a hypocritical statement needs to get called on.

Ditto for me.
I'm not a real aeronautical engineer, I just play one on Airliners.net.
 
roseflyer
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RE: 777 Has Just One Problem: It Costs Too Much

Sun Dec 05, 2004 11:21 am

Going back to the original topic of reducing production time from 24 to 8 days. That is a huge jump. Boeing production hasn't evolved that much since the 747 began production in Everett 35 years ago. I know the Seattle Times is in Boeing's backyard, but that is still quite a statement. Cutting production time by 2/3 would be a huge accomplishment. Boeing is trying to use the cost saving strategies developed by Toyota of just in time delivery while maintaining minimal stock and reserves. The cost savings of such a move would have a profound impact on the industry.

Airplane production is no where near as competitive as the automobile industry, but still that does not allow for complacency. Anticipating demands with new products coming out before they are needed could be really helpful. Although the cost of designing a new plane is extremely high, efficiencies in production can help lower the cost per plane, which will make Boeing more competitive.

The worst thing Boeing can do is to act like Douglas. Douglas produced the best airplanes in the 30s-50s, but were behind in the jet age. They got burned by a long development period on the DC-8 and lost orders to the 707. They tried to fight back 25 years later by rushing the MD-90 and MD-11 through production in a move to beat its competition, but they also lost. McDonnell Douglas found that fresh designs were too costly, so they just modified old designs. On the other hand Boeing has a good history, but by cutting costs in airplane development, they will lost like McDonnell Douglas did. New revolutionary designs are needed in addition to evolutionary designs. McDonnell Douglas only modified the DC-9 and DC-10 designs for their last 20 years in business. They didn't design new planes, and got burned. They tried to cut costs on development rather then on production. If Boeing can produce a 777 for less, then they will be able to direct the saved funds towards lower prices in poor economic times, or towards more development in better economic times.

Toyota has proven that you always want to save money in production, but not be afraid to spend money on development. Hopefully Boeing will put that motto to good use in redesigning the 777, 7E7 and the production of other planes as well.
If you have never designed an airplane part before, let the real designers do the work!