travellin'man
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Le Bourget Lessons For Boeing

Sat Jun 23, 2007 9:48 am

The usual Airbus fanfare of saving the announcements of orders for airshows aside, I was struck by how many orders they racked up nonetheless (a record for any airshow?), and specifically for the A320 family, both for the overall number, and the number of carriers who ordered. In another thread Der Spiegel is quoted as playing this fact down, but I think it is significant.

Boeing commented during the show that market demand will dictate how quickly they proceed with Y1, and whether Y1 comes ahead of Y3. While the growing market momentum around the A350 does turn the heat up on a 777 replacement, I wonder if the immediate lesson to be drawn from this airshow is that Y1 presses now more than ever if Boeing wants to maintain the edge it has created with the 787. At what point does Airbus's robustly growing share of this segment start to overshadow concerns regarding prematurely cannibalizing the 737 line? Crazy as this sounds, to what extent do carriers actually NOT want a new plane just yet because they don't want the value of the relatively new planes (in this case 737NG's) to be excessively diminished, and thus, actually ask a manufacturer to hold off?

I am interested in the different forces at work here between the manufacturers wanting to compete but preserve their profitability, and at the same time airlines wanting greater operational efficiency, and then again, perhaps wanting the resale value of their current fleets to stay up.

Opinions, thoughts?
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keesje
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RE: Le Bourget Lessons For Boeing

Thu Jul 05, 2007 5:16 pm

I think it's a trade of for any manufacturer. A you state the announcement of a new type of aircraft has a negative impact on the resale value of the current aircraft type.

What I see is manufacturers keeping silent / downplaying devlopment work on their new project in order to no delute the current market prospects.

The case of the 787 was different however. The 787 predecessor, the 767, had already been decimated sales wise by the A330, giving Boeing the opportunity to go full power with their communications / PR regarding the new aircraft from it's early devlopment stages. Which they did very well, like never before IMO.



With regards to a successor of the 737 / 320 / MD80 series I think Airbus, Boeing, CFM, RR/PW are very carefull not to hurt their cash cows. They will only come out with new ideas if they see there is no way back, they have commitments from big airlines and a good idea where the market / competition is going.

The stakes are high Boeing expect a market for more then 17.000 new narrowbodies in the next 20 years.

http://www.boeing.com/commercial/cmo/images/lg_highlights_cmo07.gif

Until then they will be very carefull communicating what going on in their product development offices & rumor mills / thousands of eyes combined like a.net are not their best friends..
"Never mistake motion for action." Ernest Hemingway
 
WINGS
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RE: Le Bourget Lessons For Boeing

Thu Jul 05, 2007 5:37 pm

Quote:
The usual Airbus fanfare of saving the announcements of orders for airshows aside, I was struck by how many orders they racked up nonetheless (a record for any airshow?), and specifically for the A320 family, both for the overall number, and the number of carriers who ordered

I'm not sure if you are aware, but Airbus did not manage to save the following orders for the show.  Wink All of them have been announced since the event.

Uzbekistan x 6 A320
Air Asia x 25 x A320
Easyjet x 35 x A319
Volaris x 14 A319
Qatar x 2 A319 (ACJ)

Total: 82 frames.

Regards,
Wings
Aviation Is A Passion.
 
Burkhard
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RE: Le Bourget Lessons For Boeing

Thu Jul 05, 2007 5:41 pm

The crucial questions is the engines. Most of the advantage of the 787 compared to 767 comes from GENX versus CF6. A CF6 powered 787 wouldn't be much better than a CF6 powered stretched 767.

So unless there are new engines, and these are available to one of the competitors only, they cannot have more than a nose length between each others.

So assume A or B decide to throw a lot of money into a new narrow body, and after a lot of hype come out with 5% fuel reduction, and three years later the new engines bring an 8 or 10 % advantage for free for them - would that make sense?
 
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zeke
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RE: Le Bourget Lessons For Boeing

Thu Jul 05, 2007 7:30 pm

"The usual Airbus fanfare of saving the announcements of orders for airshows aside"

I think everyone is expecting Boeing to have saved a number of announcements for the 787 rollout, it will be their PR day for 2007.
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Stitch
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RE: Le Bourget Lessons For Boeing

Thu Jul 05, 2007 7:34 pm

Quoting Travellin'man (Thread starter):
I was struck by how many orders they racked up nonetheless (a record for any airshow?), and specifically for the A320 family, both for the overall number, and the number of carriers who ordered. In another thread Der Spiegel is quoted as playing this fact down, but I think it is significant.

Boeing commented during the show that market demand will dictate how quickly they proceed with Y1, and whether Y1 comes ahead of Y3. I wonder if the immediate lesson to be drawn from this airshow is that Y1 presses now more than ever if Boeing wants to maintain the edge it has created with the 787. At what point does Airbus's robustly growing share of this segment start to overshadow concerns regarding prematurely cannibalizing the 737 line?

I'm hearing through the industry grapevine that Airbus was offering significant incentives for large A320 orders. For the record, this is is not "loss-leader pricing" or "dumping" or any of that "buy one get one free" nonsense. More like "buy four, get one free" which still allows Airbus to come out ahead (especially when you add in the ancillaries required for such large orders), but is going to squeeze the margins on the line a bit.

However, between needing cash to support the A350 development program as well as fund operations and ramping up production to 40 planes a month, Airbus needed to greatly increase their A320 backlog so such deals strike me as a reasonable thing for Airbus to do. Narrowbody sales were amazingly strong for both carriers in 2005 and 2006, so if Boeing does sell 600-700 737NGs this year it could be that the narrowbody replacement and expansion market remains strong and Airbus just wanted to secure their orders in time for Paris so they sweetened the pot a bit, where Boeing will do whatever they do to secure another 400-500 orders by year's end.

So I don't really see Airbus squeezing out Boeing, for even if Boeing ends up with significantly less 737 sales this year, possibly indicating the narrowbody order boom is ending, Airbus' strong 2007 run, even with accelerated deliveries, will give Boeing earlier delivery positions for both the 737NG and the 737RS which should help support orders for both models.

Quoting Keesje (Reply 1):
What I see is manufacturers keeping silent / downplaying devlopment work on their new project in order to no delute the current market prospects.

Agreed.

Quote:
The case of the 787 was different however. The 787 predecessor, the 767, had already been decimated sales wise by the A330, giving Boeing the opportunity to go full power with their communications / PR regarding the new aircraft from it's early devlopment stages. Which they did very well, like never before IMO.

If selling two 767s for every three A330s means the 767 was "decimated sales wise", then you must agree that the A350 has been totally, unequivocally, irrecoverably, and completely destroyed sales wise by the 787.

And I don't think you would...  Wink
 
WINGS
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RE: Le Bourget Lessons For Boeing

Thu Jul 05, 2007 7:42 pm

Quoting Stitch (Reply 5):

If selling two 767s for every three A330s means the 767 was "decimated sales wise", then you must agree that the A350 has been totally, unequivocally, irrecoverably, and completely destroyed sales wise by the 787.

And I don't think you would...

Yet one is to start deliveries in 2008 and the other in 2013, which makes a big difference. We also have to consider that the A350 will not only be an A330 replacement but an an A330/A340 family replacement right from the low end A330-200/F up to the A340-600 size, which traditionally sells less frames then the lower end.

Regards,
Wings
Aviation Is A Passion.
 
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Stitch
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RE: Le Bourget Lessons For Boeing

Thu Jul 05, 2007 7:52 pm

Quoting WINGS (Reply 6):
Yet one is to start deliveries in 2008 and the other in 2013, which makes a big difference.

Well the same could be said for the 767-300ER, since I did not add in the 334 sold prior to the first order of the A330-200 when I calculated the 3:2 sales ratio for the A332. And if I add in all other 767s variants, that would be an additional 692 orders, which is more then the A330-200 (and almost A330-300, as well) has sold, period.  Smile

Quote:
We also have to consider that the A350 will not only be an A330 replacement but an an A330/A340 family replacement right from the low end A330-200/F up to the A340-600 size, which traditionally sells less frames then the lower end.

True, but since the original argument was that the A332 had "decimated" the 767 since entering service, I just wanted to clarify how we were defining "decimated". The 787-8 has sold 426 frames through May 2007. The A350-800 has sold 64 through June 2007. That is a 7:1 sales ratio for the 787-8. If a 3:2 ratio is "decimation", what is a 7:1 ratio?  Wink
 
EI321
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RE: Le Bourget Lessons For Boeing

Thu Jul 05, 2007 8:04 pm

Quoting WINGS (Reply 6):
We also have to consider that the A350 will not only be an A330 replacement but an an A330/A340 family replacement right from the low end A330-200/F up to the A340-600 size, which traditionally sells less frames then the lower end.

I think that the last aircraft to roll off the A330/A340 line will be an A330F, unless Northrop/EADS win the USAF contract.
 
WINGS
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RE: Le Bourget Lessons For Boeing

Thu Jul 05, 2007 8:07 pm

Quoting Stitch (Reply 7):

Well the same could be said for the 767-300ER, since I did not add in the 334 sold prior to the first order of the A330-200 when I calculated the 3:2 sales ratio for the A332. And if I add in all other 767s variants, that would be an additional 692 orders, which is more then the A330-200 (and almost A330-300, as well) has sold, period.

Stitch, I understand your point perfectly well. Its a rather hard task if not impossible to achieve a conclusion.  Smile

To be fair the 767 sales (767-200/ER/300/ER/F/400) should be compared to the A300/F/A310 and the A332. But many will easily dismiss this fact.

Quoting Stitch (Reply 7):
True, but since the original argument was that the A332 had "decimated" the 767 since entering service, I just wanted to clarify how we were defining "decimated". The 787-8 has sold 426 frames through May 2007. The A350-800 has sold 64 through June 2007. That is a 7:1 sales ratio for the 787-8. If a 3:2 ratio is "decimation", what is a 7:1 ratio?

Its strange that you compared the 787-8 to the A350-800 when we are constantly being told on A.net that these two models don't compete directly.

How do the numbers look if we compare the 787-9 to the A350-800.

Regards,
Wings
Aviation Is A Passion.
 
WINGS
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RE: Le Bourget Lessons For Boeing

Thu Jul 05, 2007 8:09 pm

Quoting EI321 (Reply 8):

I think that the last aircraft to roll off the A330/A340 line will be an A330F, unless Northrop/EADS win the USAF contract.

I also believe that the A330-200F will be the last model to roll of the line. When this happens I'm sure that the A350F will do a good job taking over  Wink

Regards,
Wings
Aviation Is A Passion.
 
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N328KF
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RE: Le Bourget Lessons For Boeing

Thu Jul 05, 2007 8:34 pm

Quoting WINGS (Reply 9):
Its strange that you compared the 787-8 to the A350-800 when we are constantly being told on A.net that these two models don't compete directly.

This is nonsense. Most compare the 787-9 to the A350-800. You dreamt the 787-8 comparison, or derived it from isolated circumstances.
When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' -Theodore Roosevelt
 
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Stitch
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RE: Le Bourget Lessons For Boeing

Thu Jul 05, 2007 8:42 pm

Quoting WINGS (Reply 9):
To be fair the 767 sales (767-200/ER/300/ER/F/400) should be compared to the A300/F/A310 and the A332. But many will easily dismiss this fact.

Aye. Which is why I find the comparisons, and especially the claims of "dominance" by one line or the other, to be a bit silly. The A300B2 (especially) and A300B4 had less range then the base 767-200, so do we only count 762s that flew domestic US transcons to keep things even?  Smile

Quoting WINGS (Reply 9):
Its strange that you compared the 787-8 to the A350-800 when we are constantly being told on A.net that these two models don't compete directly.

That is because people look at raw seat counts and do not realize (or choose to ignore) that Airbus has a greater Economy to premium cabin ratio then Boeing so if you had two planes with identical space, the Airbus config would have more seats then the Boeing.  Smile

Quoting WINGS (Reply 9):
How do the numbers look if we compare the 787-9 to the A350-800.

115 to 64 in favor of the 787-9 as of May (for Boeing) and June (for Airbus).
 
slz396
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RE: Le Bourget Lessons For Boeing

Thu Jul 05, 2007 9:21 pm

Quoting WINGS (Reply 2):
Airbus did not save the following orders for the show.
Uzbekistan x 6 A320
Air Asia x 25 x A320
Easyjet x 35 x A319
Volaris x 14 A319
Qatar x 2 A319 (ACJ)
All of them have been announced since the event.
Total: 82 frames.

...you forgot 22 x A350XWB and 4 x A332 (how could you?  Wink) for TAM!

This makes a whopping 108 'post airshow orders' for Airbus...
 
WINGS
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RE: Le Bourget Lessons For Boeing

Thu Jul 05, 2007 10:13 pm

Quoting N328KF (Reply 11):
This is nonsense. Most compare the 787-9 to the A350-800. You dreamt the 787-8 comparison, or derived it from isolated circumstances.

I suggest that you go back and see what models Stitch was comparing.  Silly

I clearly noted that it would have been a better comparing the 787-9 vs A350-800.

Quoting Stitch (Reply 12):

Quoting WINGS (Reply 9):
How do the numbers look if we compare the 787-9 to the A350-800.

115 to 64 in favor of the 787-9 as of May (for Boeing) and June (for Airbus).

Airbus numbers for June? They haven't updated their order spread sheet. Maybe you meant May (Airbus) and June for (Boeing)?

Quoting Slz396 (Reply 13):

...you forgot 22 x A350XWB and 4 x A332 (how could you? Wink) for TAM!

This makes a whopping 108 'post airshow orders' for Airbus...

Actually lets be fair and say that it was 12 A350XWB (other 10 are just conversions) + 4 A330's.

Thats a total of 98 frames.  Wink

Regards,
Wings
Aviation Is A Passion.
 
ChiGB1973
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RE: Le Bourget Lessons For Boeing

Thu Jul 05, 2007 10:33 pm

Except how many planes that were sold, nothing really leads me to believe there were Le Bourget Lessons for Boeing. Whether or not go with a narrowbody or 777 replacement has been an ongoing debate among a.nutters, Boeing and Airbus, separately of course?

Quoting Burkhard (Reply 3):
The crucial questions is the engines. Most of the advantage of the 787 compared to 767 comes from GENX versus CF6. A CF6 powered 787 wouldn't be much better than a CF6 powered stretched 767.

If this were the case, the original A-350 would have been perfectly ok and both manufacturers could have saved a fortune on development costs. I'm sure that's a new thread, but since this thread has become an argument on the number of 330/767 sold, I guess it's OK.

M
 
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Stitch
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RE: Le Bourget Lessons For Boeing

Thu Jul 05, 2007 11:26 pm

Quoting WINGS (Reply 14):
Airbus numbers for June? They haven't updated their order spread sheet. Maybe you meant May (Airbus) and June for (Boeing)?

Neither has Boeing. I am using Wiki for Airbus' A350 orders since they do include all the Paris orders. Once both companies release their formal June numbers, we can get an accurate count.

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