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