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Max Q
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C17 Line Closing Prematurely?

Fri Aug 15, 2014 7:15 am

Although there are a few extra frames being built as 'White tails' these are being snapped up pretty quickly with the RAAF being a recent example.



This superb aircraft has become indispensable to all its operators worldwide and I think Boeing could sell another couple of dozen with repeat orders alone.


I predict this will be the '757' of the military world in that many operators will wish they could still buy more not too long after the line closes.
The best contribution to safety is a competent Pilot.


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Legs
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RE: C17 Line Closing Prematurely?

Fri Aug 15, 2014 7:57 am

Like the 757, if the demand was present right now, or even probably shortly into the future, Boeing would have kept the line open. I have no doubt that the C-17 sales department has put feelers to out to any country that might be interested, and the answer was obviously in the negative, so it makes prudent business sense to shut the line down.

There would also be a lot of pressure from within the US to keep the line running, I've seen articles that estimate the impact of the closure to cover 44 states in the US and some 50,000 employees, no Congressman or Senator wants to see those sort of job losses without it being absolutely necessary. However, that isn't enough either.

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Max Q
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RE: C17 Line Closing Prematurely?

Fri Aug 15, 2014 9:24 am

Quoting legs (Reply 1):
Like the 757, if the demand was present right now, or even probably shortly into the future, Boeing would have kept the line open.

Precisely my point, it wasn't long after the 757 line was closed that the demand for this aircraft picked back up and it's use on TATL routes skyrocketed. It had created a whole new market and a new lease on life but no more were being made.


A NG version would have done very well and still be in production today like its big brother the 767.


Delta's CEO has stated consistently what a hole in the market that has left, how invaluable the 757 is and he would buy more today if they were still made.


Boeing is making the same mistake with the C17
The best contribution to safety is a competent Pilot.


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scbriml
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RE: C17 Line Closing Prematurely?

Fri Aug 15, 2014 9:49 pm

Quoting Max Q (Reply 2):
Boeing is making the same mistake with the C17

My understanding is that they've built 10 white-tails. How much has that cost Boeing? Even if the RAAF takes one or two as expected, that would still leave eight or nine just sitting on the inventory costing money every single day.

The fact is, without the speculative building of those ten, the line would have closed about 18 months ago. It happens to every plane.
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LAXintl
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RE: C17 Line Closing Prematurely?

Fri Aug 15, 2014 10:36 pm

USAF has not wanted another C-17 since 2007, but Congress has forced them to purchase 43 more through the 2012 Budget year.

As is Boeing has slowed production to mere 10 frames annually which has put tremendous pressure on trying to maintain unit cost.

Without underlying demand in the U.S, its foolish for Boeing to keep the line open on its own dime. Trying to market 10-frames a year is a very big and risky task when the global market is barely a handful of potential clients.
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bunumuring
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RE: C17 Line Closing Prematurely?

Sat Aug 16, 2014 4:44 am

I agree that Boeing had little choice.
But I think it was very wise of Boeing to build ten 'white tails'. I hear speculation about the UK and NATO wanting more C-17s but budgetary constraints ATM prevent either from ordering. I have heard that Sweden would like at least one and that the various Gulf countries could top up their orders. Turkey and South Korea have also been mentioned, and (a long shot admittedly) Japan supposedly looked at them after the tsunami.
Even New Zealand was rumored to have been interested in doing some kind of deal with Australia to jointly purchase and 'share' an additional C-17.
These ten, now eight, 'white tails' will find homes fairly easily, I predict. But Boeing couldn't have continued long-term funding of additional planes without definite orders.
By the way, has there ever been any talk of stretched version of the C-17, or for that matter any need for a stretched version? Large volume, low mass cargo?
And I guess we can kiss the BC-17 goodbye ... At least as a new build. Though talk of Safair contemplating an order for 10 x C-130Js show new build military planes can be purchased for civilian use still...
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Max Q
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RE: C17 Line Closing Prematurely?

Sat Aug 16, 2014 9:50 am

Quoting bunumuring (Reply 5):
These ten, now eight, 'white tails' will find homes fairly easily, I predict. But Boeing couldn't have continued long-term funding of additional planes without definite orders.

Agree and i think they could easily sell another 20-30 worldwide. The USAF has enough but the rest of the world is very impressed with the C17 as they should be, they just need a little more time to pay for them.


Shame Boeing won't give that to them, just like the B757 I think they'll regret shutting the line down prematurely.

Quoting bunumuring (Reply 5):
By the way, has there ever been any talk of stretched version of the C-17, or for that matter any need for a stretched version? Large volume, low mass cargo?

Good point, it always looked like it was made to be stretched.
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Mortyman
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RE: C17 Line Closing Prematurely?

Sat Aug 16, 2014 10:23 am

I'm surprised they are closing down the line for good, especially considering that there is'nt any new design on the horizon.
 
bunumuring
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RE: C17 Line Closing Prematurely?

Sat Aug 16, 2014 2:00 pm

Quoting Max Q (Reply 6):
Good point, it always looked like it was made to be stretched.

Hi mate,
Yes, just like the Starlifter. I could see Australia and the UK (at least) wanting a few each of a stretched model.

An update... Apparently Singapore is interested as well in a few C-17s. Speculation passed on to me today from an avgeek mate overseas...

Cheers,
Bunumuring.
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Revelation
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RE: C17 Line Closing Prematurely?

Sat Aug 16, 2014 2:31 pm

Quoting Max Q (Reply 2):

Precisely my point, it wasn't long after the 757 line was closed that the demand for this aircraft picked back up and it's use on TATL routes skyrocketed.

That's one point of view. Another is that as 737NGs came out in force and A320s improved the 757s were replaced on 90% of their routes so they had to find a new mission. The overall cut in flying after 9/11/2001 and the wave of industry bankruptcies thereafter certainly didn't help. The last 757 was produced in 2004 so RA saying he'd buy new frames in 2014 isn't at all helpful. There's no way the supply chain was going to freeze itself in place for a decade just so DL could pick up a dozen or two new frames a decade later.

Quoting LAXintl (Reply 4):
USAF has not wanted another C-17 since 2007, but Congress has forced them to purchase 43 more through the 2012 Budget year.

Which suggests to me that once Boeing has shut things down for a year or two, USAF would be more than willing to shift a few frames to an ally who needs them. We've seen USAF shift frames from its inventory before, so there is a precedent.
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Stitch
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RE: C17 Line Closing Prematurely?

Sat Aug 16, 2014 6:01 pm

Quoting Max Q (Reply 2):
Precisely my point, it wasn't long after the 757 line was closed that the demand for this aircraft picked back up and it's use on TATL routes skyrocketed. It had created a whole new market and a new lease on life but no more were being made.

They went on those routes because they were paid for (so operating costs were lower) and there was no competition (so fares could be higher).




Quoting Max Q (Reply 6):
Agree and i think they could easily sell another 20-30 worldwide. The USAF has enough but the rest of the world is very impressed with the C17 as they should be, they just need a little more time to pay for them.

Shame Boeing won't give that to them, just like the B757 I think they'll regret shutting the line down prematurely.

The longer those frames sit, the more Boeing has to charge to make a profit on them.

If foreign air forces are having difficulty paying the current price, paying even more should be that much more difficult.
 
Kiwirob
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RE: C17 Line Closing Prematurely?

Sat Aug 16, 2014 6:37 pm

Quoting Max Q (Reply 6):
Agree and i think they could easily sell another 20-30 worldwide.

If they could the question is why haven't they? Current operators and potential buyers have known the line was closing for a long time, no orders have been forthcoming, apart from the 2 from Australia.
 
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kanban
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RE: C17 Line Closing Prematurely?

Sat Aug 16, 2014 8:51 pm

Boeing is generally very conservative, so they wouldn't have speculated on ten potential sales unless they had some very strong assurances for future sales.. who to beats the heck out of me.. but they are as good as sold already
 
Max Q
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RE: C17 Line Closing Prematurely?

Sun Aug 17, 2014 5:42 am

Quoting Stitch (Reply 10):

They went on those routes because they were paid for (so operating costs were lower) and there was no competition (so fares could be higher).

Incorrect, they went on those routes and are still on them because of their unmatched performance in a unique capacity range.
The best contribution to safety is a competent Pilot.


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scbriml
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RE: C17 Line Closing Prematurely?

Sun Aug 17, 2014 7:59 am

Quoting kanban (Reply 12):
Boeing is generally very conservative, so they wouldn't have speculated on ten potential sales unless they had some very strong assurances for future sales.. who to beats the heck out of me.. but they are as good as sold already

Sorry, this just doesn't make sense to me as Boeing is more than happy to book UFO orders. Either they're sold or they're not. Without an LOI or MOU in place, "as good as sold" isn't worth the paper it's written on - and there's no paper involved!   
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kanban
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RE: C17 Line Closing Prematurely?

Sun Aug 17, 2014 5:37 pm

Quoting scbriml (Reply 14):
Sorry, this just doesn't make sense to me as Boeing is more than happy to book UFO orders. Either they're sold or they're not. Without an LOI or MOU in place, "as good as sold" isn't worth the paper it's written on - and there's no paper involved!

Sorry, there is too much cost involved to build "white-tails" and hope.. The board would never approve it. I've been through build "white tails" and the sales will happen scenario and we lost our shirts. There are reasons why nothing is public.. and part of that is the military export process and governmental financing/guarantees.. Some countries would not fare well getting congressional approval these days.
 
ThePointblank
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RE: C17 Line Closing Prematurely?

Mon Aug 18, 2014 12:39 am

Quoting kanban (Reply 15):
Sorry, there is too much cost involved to build "white-tails" and hope.. The board would never approve it. I've been through build "white tails" and the sales will happen scenario and we lost our shirts. There are reasons why nothing is public.. and part of that is the military export process and governmental financing/guarantees.. Some countries would not fare well getting congressional approval these days.

And military aircraft are the worst sort to build white tails. It isn't like the civilian market where if airline A decides down the line they don't want to take the aircraft, the manufacturer can quickly reassign and sell the airframe to airline B, C or D. There's a limited number of customers that can afford to buy one in the first place and is capable of setting the money aside to do so, and that number will be cut down by whom actually need the piece of hardware, and has approval to buy that piece of hardware from the OEM's country. Pretty much, for a white-tail C-17, you are looking at a fairly wealthy US-friendly nation that actually has a need for something like a C-17. That is a fairly short list.
 
Flighty
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RE: C17 Line Closing Prematurely?

Mon Aug 18, 2014 5:26 am

It's one thing to find a job for a depreciated old airplane. Cutting a check for $100m++ for a new airplane is a whole different thing. Who among you is willing to sign that check?

Oh, and rumors of a guy willing to sign the check can't be taken to the bank and cashed. Sorry.

Sure, there may be a few customers rattling around but it's not worthwhile for Boeing to wait for them.
 
FrmrKSEngr
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RE: C17 Line Closing Prematurely?

Tue Aug 19, 2014 4:37 am

Quoting Flighty (Reply 17):
Sure, there may be a few customers rattling around but it's not worthwhile for Boeing to wait for them.

Especially when you add in that after the C-17 is gone, that SoCAL real estate can be disposed of.

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