Jetport wrote:Naincompetent wrote:Also, about all those who believe that Boeing will cancel the program, one has to understand that most of the cost is behind them.
That means that as long as the future revenue is enough to offset the ongoing development costs, it is worth continuing the development.
Money which went out of the pocket last year is already a sunken cost and totally irrelevant for present decisions.
You are absolutely correct. It is amazing how many folks out there just can't seem to grasp the sunk development cost concept. All the 777X needs is a reasonable prospect of profitability from today forward, all of the past development money is gone and now irrelevant, you can't go back in time. The future freighter version is just one more reason that there is no doubt that the 777X program will continue forward.
Sunk development cost is why the A380 and 747-8 went on for years on life support, the cost of keeping the lines running was relatively low and worth the risk of getting future orders. The A330NEO is now in a similar situation, which barring a huge upturn in widebody demand in the near future will likely end like the A380 and 747-8 did.
Excellent point! The sunk costs must be ignored. But now that a frame has little cost to enter service, what can be done to make a profit off future spending (ignoring everything spent before, because that is a sunk cost).
More to others:
I believe just a freighter alone will make a profit ion *future* 777x spending. As a bonus, it improves the economy of scale of the 777x and gives a chance that the passenger plane will find a market.
Unfortunately, in my opinion, I think long haul demand, in particular the front cabin will be reduced. Partially as front cabin passengers will want to minimize exposure and are likely to fly private. Partially as business flying will be reduced. This hurts all widebodies, in particular larger widebodies (the market really needs a MoM, IMHO).
Airbus needs a freighter too. More than the A330P2F which is for mid-package missions, IMHO. Long haul (TPAC or Pacific to EU) justifies new builds due to mission length.
QR is seizing a negotiating opportunity. I'm not sure if there will only be one large long haul freighter, so there is the risk. Boeing and Airbus had better sharpen the pencils as this shall be the most brutal negotiation.
It doesn't matter what we think of QR. This is a kingmaker sized order for the next large widebody freighter. AAB knows this.