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kaitak744
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Boeing's Bad Miscalculations

Wed Oct 12, 2005 9:28 am

Over the past few years, Boeing has done some serious miscalculating on their aircraft. For example, they greatly underestimated the range and payload of the 777-300ER/200LR. This lead to significant order losses to Airbus. In addition, the similar thing happened to the 717. On the other hand, Airbus has in some casses over stated their aircraft specifications. If all these false advertisements were correct and where the should be, wouldn't Boeing have never lost their lead as the #1 plane maker?

[Edited 2005-10-12 02:28:43]
 
MarshalN
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 9:34 am

I'm rather confused about your post.... so you're saying that Boeing, by understating their aircraft's specifications, lost orders to Airbus and that's the primary reason why they lost their lead as the #1 airliner maker in the world?

I find that rather unlikely to be the case -- if Boeing's products are truly so superior and the only reason they lost out was because they underestimated their own aircrafts' performance, then customers would have quickly been able to identify that and Airbus planes that have been taking the lead would see their sales quickly evaporated. I don't think that has been the case exactly.
 
ContnlEliteCMH
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 9:35 am

Let me see if I grasp this odd line of reasoning:

Boeing develops a set of specifications for a plane's performance. Those specifications are presented to customers, who buy the plane believing it will deliver on those promises.

It turns out that Boeing's engineers have outdone themselves, and the plane actually exceeds the promised performance. But in your mind, this is a problem?

And then, you think that overdelivering on an airplane that (a) works better than anticipated, and (b) clearly leads its market segment, is the reason they are no longer #1? Doesn't this seem backward to you?

Friend, I can tell you've never done any kind of engineering work. Ever. "Underpromise and overdeliver" is practically scripture for most engineers. Beating expectations is always good; falling short is always bad.
 
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BlueSky1976
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 9:57 am

Boeing did not lose the lead. We have a duopoly on the commercial airline market and what you're seeing is just the beginning of the swinging pendulum effect. There will be years when Airbus will be number one, and there will be years where Boeing will be number one.
The reason why Boeing lagged behind Airbus wad due to some bad managerial decisions and not pursuing customer interests in few cases (jetBlue and Spirit come to mind here). They wasted too much time with 767-400 instead of jumping right on with what we now know as 787, while A330 was snatching potential 767 customers. As far as underestimation of the 777 range, that was never underestimated - the C-Market variant was on the drawing boards at the same time as the base A- and B-Market models, it's just that there was no engine powerful enough to give -200LR and -300ER enough uplift. To top it of, Boeing lost TONS of customer confidence after they cancelled 747-500X/-600X development programs. While Airbus was "sticking to their balls" with A3XX, Boeing was wasting time with combination of "nobody will buy it" agenda and the ill-fated 747X and 747-400XQLR studies. I'm glad that finally they have gotten their act together, that 777-200LR and -300ER became rock solid planes, which will enjoy quite healthy production run. I can't wait for 787 and for the new Y3 big twin.
 
atmx2000
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 9:59 am

Quoting ContnlEliteCMH (Reply 2):
Friend, I can tell you've never done any kind of engineering work. Ever. "Underpromise and overdeliver" is practically scripture for most engineers. Beating expectations is always good; falling short is always bad.

Especially if you have to pay penalties if you fall short.
 
MarshalN
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 10:00 am

Quoting BlueSky1976 (Reply 3):
They wasted too much time with 767-400 instead of jumping right on with what we now know as 787, while A330 was snatching potential 767 customers. As far as underestimation of the 777 range, that was never underestimated - the C-Market variant was on the drawing boards at the same time as the base A- and B-Market models, it's just that there was no engine powerful enough to give -200LR and -300ER enough uplift. To top it of, Boeing lost TONS of customer confidence after they cancelled 747-500X/-600X development programs. While Airbus was "sticking to their balls" with A3XX, Boeing was wasting time with combination of "nobody will buy it" agenda and the ill-fated 747X and 747-400XQLR studies.

I think this pretty much sums up why and how Airbus was able to catch up and become the player in the market that it is nowadays. Boeing was a pretty poorly managed company in the 90s, really.
 
boeingbus
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 10:21 am

Look folks, the only reason Airbus got to be number 1 was that they sold tons of A320's to LCC and the A330 was a star. At the end, the majority of orders were for the A320. It just happened that airlines that felt the A320 was best for them during this period of time in the last 2 to 3 year span. This swayed orders and delivers to Airbus' favor. It's no different to what is currently happening this year. Boeing is doing extremely well. Bluesky said it well - its a duopoly.

Let me go further and say just like how the A330 dragged 767 sales to almost nil the same can be said for 773ER, & 772LR affecting the future of A340. Airbus will have to abandon the A340 line and think of something new (A350??) - just like how Boeing has with the 767.

Surprising, the old bird 747, that many on here predict its demise, has sold more copies than than the A380 this year.
 
kaitak744
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 10:33 am

Well, let me clarify things. For example, if the 777-300ER was advertised as it performed, (which is obviously not a bad thing), then Emirates would have ordered the 777-300ER (instead of A340-600). If the 777-200LR was advertised as performed, Singapore Airlines would have ordered it (instead of A340-500). And the list goes on. What I am saying is, correct advertising could have brought some orders in different directions.

[Edited 2005-10-12 03:35:47]
 
BCAInfoSys
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 10:42 am

Quoting Kaitak744 (Reply 7):
Well, let me clarify things. For example, if the 777-300ER was advertised as it performed, (which is obviously not a bad thing), then Emirates would have ordered the 777-300ER (instead of A340-600). If the 777-200LR was advertised as performed, Singapore Airlines would have ordered it (instead of A340-500). And the list goes on. What I am saying is, correct advertising could have brought some orders in different directions.

Do me a favor and look at when those models were introduced. The A346 was available before the 773ER, and that's why it was purchased. Ditto for the SQ A345 order. Notice how EK is buying loads of 773ERs and SQ is on the verge of announcing a large 772LR to replace the A345? Because the 777 has become a BETTER airplane then the A340. It outperforms, even better then we expected. Get a clue.. we (Boeing) understate our projections so that we can only improve upon them. We consistently one-up ourselves. While Airbus historically misses its targets by a country mile and has to backpedal. The other posters have hit it on the head. And you haven't gotten it.. think about it. Would you rather be promised something that failed to deliver, or would you rather order something that is projected to be fantastic, and then goes another step or two beyond that? Means Boeing customers get more performance then they paid for. They're ecstatic. Much better then paying penalties for failing to deliver...  Yeah sure
 
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sunrisevalley
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 10:52 am

Quoting Kaitak744 (Reply 7):
What I am saying is, correct advertising could have brought some orders in different directions.

No, No, No....
Advertising is directed at the likes of A.netters. I doubt if it ever sold one aircraft to the best managed airlines. Airlines like SQ buy based on the performance guarantees that the manufacturer gives normally with stiff penalties
if they fall short. Boeing tends to be conservative, perhaps they don't like the idea of paying for this sort of thing.
I do think that for a period gross margin became their God and that cost them many sales. It is great to have a nice gross margin but that disappears quickly if the production line drops to or below break even.
 
atmx2000
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 10:54 am

Quoting BlueSky1976 (Reply 3):
They wasted too much time with 767-400 instead of jumping right on with what we now know as 787, while A330 was snatching potential 767 customers

This is a false proposition. The technology needed for the 787 would not necessarily have been mature at that time, and engine makers would not have a offering ready to make a aircraft viable. Boeing might have instead screwed itself by jumping onto a full 767 replacement program. They would have not have been able to take advantage of a new generation of engines, they wouldn't have the benefit of advances in materials and manufacturing technology for using those materials, and they would have been spending large amounts of money on product development during the post 9/11 downturn.
 
boeingbus
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 10:55 am

Also, on a final note... Boeing did Airbus a favor by removing MDD from this equation. It helped them a lot on pricing aspects with less competition in play.

Boeing got sidetracked with this merger... Integrating the defense groups and closing down the MD11, layoffs, among others tasks.

WE can debate this all we want... but Boeing losing the top spot wasn't from your theory of performance recalculations... it was bad corporate management and arrogance. Customers took notice.
 
lincoln
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 11:03 am

Quoting ContnlEliteCMH (Reply 2):
Beating expectations is always good; falling short is always bad.

Since you beat me to the "Under promise and over deliver" mantra, let me add that overdelivering your underpromise is much less likely to lead to ill will or a lawsuit than overpromising and underdelivering.

While I haven't been paying much attention to the A380 from what I have skimmed it sounds like Airbus is wracking up loads of goodwill with delayed deliveries being (reportedly) overweight, etc. If this is true, there will be at least some customers who will be less likely, at some level, to make Airbus the first choice in the future. On the otherhand, if Boeing provides an aircraft that outperforms what they've promised...

On a very (if not overly) simplistic level, imagine you've purchased a car and Company A tells you that it gets 40 miles to the gallon and can do 0-60 in 4 seconds.

You purchase a 2nd car from Company B and they tell you that it gets 25 MPG and does 0-60 in 10 seconds.

In reality, both cars get something like 30 MPG and do 0-60 in 8 seconds.

Who are you going to be happier with? Who are you more likely to purchase your next car from? Who are you least likely to sue? Who are you less likely to badmouth to all of your friends purchasing cars?

Lincoln
 
DfwRevolution
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 11:13 am

Quoting Kaitak744 (Thread starter):
For example, they greatly underestimated the range and payload of the 777-300ER/200LR.

They were (1) conservative with their initial estimations, and (2) inremental boosts of capability were introduced at various points along the development. GE produced an engine PIP, Boeing tweaked final MTOW, etc. They didn't just go down to Edwards AFB one day and "find" 400 nautical miles of range.

Quoting Kaitak744 (Reply 7):
If the 777-200LR was advertised as performed, Singapore Airlines would have ordered it (instead of A340-500).

Like BCA said, SQ ordered the A345 because it was available much sooner than the 772LR. At the time, Boeing hadn't even launched the 772LR.

Quoting MarshalN (Reply 5):
I think this pretty much sums up why and how Airbus was able to catch up and become the player in the market that it is nowadays

Airbus was able to overtake Boeing because they rapidly introduced an entirely new product line in a short period of time, disrupting the product cycles and stability of Boeing's line. Airbus was the A300 in 1982, they had an entire product line by 1992. No one could move any faster than Boeing did.

In retrospect, Boeing has made a lot of smart moves that allowed them to rebound in a timely matter.

Quoting MarshalN (Reply 5):
Boeing was a pretty poorly managed company in the 90s, really.

They also developed the 777 and 737NG in the 1990s, the bread and butter of the company today. Research begun during the 1990s is what gave Boeing the basis for the 787.

Boeing gets a bad rap: they were stunned when hit by an entirely new product line developed from 1988-1993. Even during this time, Boeing wasn't overtaken in deliveries during the 1990s!

The classic example of why everyone thought Boeing had their heads up their ass was the A332. The A332 virtually halted new sales of the 763ER when it debut. Still, Boeing deliveried twice as many 763ER as Airbus has backlog for A332, and the 787 launch customers have already exceeded the A332 sales. If you keep it in perspective, Boeing didn't do too bad.

Quoting BlueSky1976 (Reply 3):
To top it of, Boeing lost TONS of customer confidence after they cancelled 747-500X/-600X development programs.

False: customers rejected the 747-500X/600X (on the basis of unit cost), Boeing did not yank the carpet out from wanting customers. Important detail.

Quoting Kaitak744 (Thread starter):
In addition, the similar thing happened to the 717

The 717 was killed by lack of market demand. The 717 was designed for short-haul, truly regional, flying. Todady's customers desired not a regional aircraft, but a mainline-like aircraft for thin routes. Enter Embraer E170/E190 family.
 
TinkerBelle
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 11:17 am

Quoting BCAInfoSys (Reply 8):
And you haven't gotten it.. think about it.

Give the poor guy a break. Stop for a minute and think about what he's asking which I think is a good question by the way. All Kaitak744 is asking is suppose Boeing advertised the B773ER to be what it is (a better plane than advertised)?? Could we have seen more orders for the plane than we have today? I think the guy is right. It's more like thinking of buying a BMW as compared to a Mercedes but your main determinant here is fuel mileage. Mercedes tell you you'll get 18 miles/gallon whereas BMW tells you you'll get 20 miles/gallon in your new 530. You end up buying the Bimmer not necessarily coz you like it better but coz you're getting 2 miles/gallon better than the Benz. You later find out the Benz is actually getting 22 miles per gallon. Wouldn't you be disappointed that maybe you should have bought the benz? Now you start thinking 'damn, the benz even looks better but you're stuck with the bimmer... Ok, I know this is nowhere close to a comparison but think logically about the guys question before discrediting his thinking. He never said Boeing exceeding expectations was a bad thing for them but maybe it cost them a couple of orders to Airbus which could very well be true. In the long run, it'll pay off for Boeing but who knows, maybe they could have had 2 more 773ER orders before it actually hit the market if potential customers knew how good the bird would be.
 
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BlueSky1976
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 11:40 am

Quoting BoeingBus (Reply 6):
Surprising, the old bird 747, that many on here predict its demise, has sold more copies than than the A380 this year.

...but most of them (if not all of them) are freighters, while Airbus sold 5 A380s to Kingfisher.

Quoting Atmx2000 (Reply 10):
This is a false proposition. The technology needed for the 787 would not necessarily have been mature at that time, and engine makers would not have a offering ready to make a aircraft viable. Boeing might have instead screwed itself by jumping onto a full 767 replacement program.

The composites were well matured in late 90s. Look at all the newly designed airplanes, sailplanes in the '80s and '90s - they are all composite. Just because Boeing did not have a know-how about the technology, doesn't mean it wasn't there. All they had to do is jump right on it. And they did, it's just that they screwed it up really bad at their first shot and it cost them their bid for the JSF fighter.
As far as the engines go, wasn't it Rolls Royce that was proposing bleedless engines to Airbus and Boeing as early as 1998? I'll have to do some digging on that issue...
Bottom line is, the technology was there, Boeing just didn't jump right on it.
 
DfwRevolution
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 11:47 am

>> As far as the engines go, wasn't it Rolls Royce that was proposing bleedless engines to Airbus and Boeing as early as 1998? I'll have to do some digging on that issue...

The engine manufactures always wanted to go to lower-bleed air engines. The problem was, Boeing had been making their aircraft more and more dependent on bleed-air, the 777 demanding a crazy amount of air.

>> The composites were well matured in late 90s. Look at all the newly designed airplanes, sailplanes in the '80s and '90s - they are all composite

I wouldn't compare specialized consumer goods to high-tech industrial goods that must last 25+ years. Boeing made two attempts at compsite technology before the Sonic Cruiser/7E7/787, (1) the 7J7 propfan in 1988, and (2) a composite wing for the 737NG program in the 1990s.

The technology for mass production and long-term durability simply weren't available until Boeing invested heavily in the X-32 and Yellowstone project.
 
kaitak744
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 11:51 am

Well, I do agree that I over looked that they were launced at different times. Nevertheless, the 777-300ER/200LR was delayed because of the lack of orders.
 
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Stitch
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 11:53 am

SQ bought A343s(?) because the 772ER wasn't ready. As soon as the 777 was ready, SQ sold their A343s to Boeing and bought 772ERs. Now that the 772LR is ready, I fully expect them to get rid of their A345s, just as EK is doing and AC will do (now that the order has been revived).

So yes, the 772LR is selling poorly, but it is selling to existing A345 customers, who are replacing that model.

The 777 family is more efficient and has a better dispatch reliability rate (even if it is a few percentage points) then the A340 family. Neither is enough enough to make the 777 an obvious choice, but it does enjoy a 6:4 sales advantage. The A345 is an especially "troubled" design in terms of meeting it's performance targets, which is why as the 772LR exceeds it's targets, airlines that need a ULA product (even if it forever remains a small niche) are going for the 772LR. And since the 772 Freighter is showing life, and it is based on the 772LR, even if the ULA market remains small, Boeing can recover the project costs with the freighter.

The A320 is a heck of a plane. I prefer it to the 737NG by a wide margin. And the A332 certainly swept the 763ER thanks to it's better cargo capacity (something the 777 enjoys over the A340 - and especially the 772LR over the A345). Airbus is right to be proud of their accomplishments and their entire product line is a good one.

But to imply they have buried Boeing is about as accurate as Kruschev's comments about burying the US.  Wink
 
Ken777
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 11:57 am

I believe it is more of an issue of airlines now believing that Boeing will work hard to exceed their expectations. This can only work in Boeing's favor when it comes to selling the 787 and 747ADV. Airbus has some work to do to catch up and they need to exceed customer expectations on both the 350 and 380 in order to catch up.
 
NAV20
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 12:05 pm

Kaitak744, traditionally, in the first stages of designing anything, you normally build in 'tolerances'; allow for everything to be say 5-10% heavier, less powerful, or more costly than you actually think it will be. That way you avoid nasty surprises down the track.

My impression is that Boeing have largely 'plugged on' in that traditional way - which is why they usually turn out delivering more in practice than they have promised on the basis of theory. But that Airbus, on the other hand, have quoted theoretical 'best figures' from the start, and risked disappointing both themselves and the customers in the end.

Remains to be seen which approach will achieve the best commercial results, over the next few years.
 
atmx2000
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 1:06 pm

Quoting BlueSky1976 (Reply 15):
The composites were well matured in late 90s. Look at all the newly designed airplanes, sailplanes in the '80s and '90s - they are all composite. Just because Boeing did not have a know-how about the technology, doesn't mean it wasn't there. All they had to do is jump right on it. And they did, it's just that they screwed it up really bad at their first shot and it cost them their bid for the JSF fighter.

If you hadn't noticed, the 777 tail section is made out of carbon fiber primarily. Boeing knows plenty about the technology. They also knew that they needed to develop reliable manufacturing methods to manufacture entirely composite large aircraft at a high production rate. They and their suppliers have had to develop tools such as robotic carbon fiber tape layers to make composite fuselages possible. Robotics have come a long way in the last few years, and makes reliable automation of many complex processes possible, reducing costs and manufacturing errors and defects. The improvement in robotics has been enabled by the continous improvement of sensors and precision mechanical components needed for robotics as well as by the exponential rate of increase in available computing power in off the shelf microprocessors and computers, which allows for control and monitoring of sophisticated robots.

Quote:
As far as the engines go, wasn't it Rolls Royce that was proposing bleedless engines to Airbus and Boeing as early as 1998? I'll have to do some digging on that issue...
Bottom line is, the technology was there, Boeing just didn't jump right on it.

The issue isn't simply bleedless, its the overall improvement in engine efficiency, which is takes bigger leaps when engine manufacturers come out with newer cores. That's why the A380 engines which are in a similar thrust class as the 787/A350 engines aren't as efficient. If Boeing had a 767 replacement already, they would likely be using something in the same technology generation as the A380 engines.
 
PlaneDane
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 1:39 pm

Quoting Kaitak744 (Thread starter):
Over the past few years, Boeing has done some serious miscalculating on their aircraft. For example, they greatly underestimated the range and payload of the 777-300ER/200LR. This lead to significant order losses to Airbus. In addition, the similar thing happened to the 717. On the other hand, Airbus has in some casses over stated their aircraft specifications. If all these false advertisements were correct and where the should be, wouldn't Boeing have never lost their lead as the #1 plane maker?

Kaitak744,
Thank you for posting an intriguing question that obviously stimulated a lot of us and led to some interesting points being made, so far. It is a refreshing change.
 
kaitak744
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 1:43 pm

Quoting PlaneDane (Reply 22):
Thank you for posting an intriguing question that obviously stimulated a lot of us and led to some interesting points being made, so far. It is a refreshing change.

No problem. This forum needs some variation from time to time.  Smile
 
mrcomet
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 1:48 pm

I think Kaitak744 makes some good points. A plane is often sold on theoretical numbers. Boeing has proven to be conservative and Airbus overly optimistic. That may have swayed a couple less careful buyers but the differences are relatively small.

More important for a long-term market is credibility. Boeing is an old fashioned engineering company and as an engineer I respect the fact they are conservative. It builds credibility with customers and avoids disappointment when the plane is delivered. Maybe this is actually working in their favor. Many companies have tried one generation of Airbus airplanes and then went back and bought from Boeing. I am not saying they did it because Boeing is better but that they felt no compunction to stick with Airbus.

Most sales are made because a plane meets the needs of the customers. A minority of airplanes stick with one manufacturer. I think Airbus had a better mix of products during the 90s and that beat Boeing. Airbus kicked Boeings ass in responding to customer needs and in marketing their products. I think we are seeing that Boeing has responded to that.

What you hypothesize played a role but probably a small one. And even if it meant losing a few sales to stupid airlines, I wouldn't change if I was Boeing and i would reconsider my strategy if I was Airbus or find some new engineers to actually build what Leahy is peddling.
 
Amy
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 9:45 pm

It's safer to underestimate than overestimate. If you underestimate the resulting aircraft is 'better than expeceted' which looks good. If you overestimate then the resulting product and the company look bad.

Simple.
 
JetMaster
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 10:00 pm

Quoting BoeingBus (Reply 6):
At the end, the majority of orders were for the A320. It just happened that airlines that felt the A320 was best for them during this period of time in the last 2 to 3 year span.

We shouldn't forget one of Airbus' main advantages was lower production costs. Boeing reacted quite late to that.

Quoting Stitch (Reply 18):
just as EK is doing

EK is replacing the A345 already? How's that possible without any B772LRs on order?


Regards,
JM
 
B707321C
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 10:00 pm

Quoting BoeingBus (Reply 6):
Look folks, the only reason Airbus got to be number 1 was that they sold tons of A320's to LCC and the A330 was a star. At the end, the majority of orders were for the A320. It just happened that airlines that felt the A320 was best for them during this period of time in the last 2 to 3 year span. This swayed orders and delivers to Airbus' favor. It's no different to what is currently happening this year. Boeing is doing extremely well

And the reason why boeing is doing better the last year, is probably mostly due to the foreign exchange rate. A weakened dollar really helped US and Boeings export. The last couple of year the dollar has dropped in value by more than 40%. Which in turn gives non-us airline the possibility to by Boeing products much cheaper in local currency than expected. I am will say most of Boeings improved sales the last year is due to this effect, rather than change in management or improvement in product range.
 
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zeke
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 10:17 pm

Quoting Stitch (Reply 18):
SQ bought A343s(?) because the 772ER wasn't ready. As soon as the 777 was ready, SQ sold their A343s to Boeing and bought 772ERs. Now that the 772LR is ready, I fully expect them to get rid of their A345s, just as EK is doing and AC will do (now that the order has been revived).

So yes, the 772LR is selling poorly, but it is selling to existing A345 customers, who are replacing that model.

This is what the SIA Chief Executive Chew Choon Seng said recently

"Singapore Airlines Ltd., which flies the world's youngest aircraft fleet, said it will pick from the newest models of Airbus SAS and Boeing Co. by as early as the year's end to add more routes to countries like China and India.

Singapore Airlines is considering Boeing's 787 and 747 Advanced models, as well as the A350 aircraft made by Airbus, said company Chief Executive Chew Choon Seng, in a Sept. 7 interview. The airline, Asia's most profitable, needs an aircraft that can fly more than 250 passengers on so-called medium-haul flights of less than 7 hours.

"We will be looking to place orders for additional aircraft, partly to renew the fleet because we have a policy of operating a young and modern fleet,'' Chew said. ``We will be looking at providing for expansion of our network.''

Singapore Airlines in August last year placed a $3.6 billion order for 18 Boeing 777-300ER planes and decided not to buy the 787 because it didn't meet "financial criteria'' then. Singapore Airlines has the option to buy 13 more 777-300ER."

No mention of 772LR...note the price of the 773ER, they have discounted them 25% for SQ.
 
Geo772
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 10:33 pm

The 717 wasn't a Boeing product it was a McDonnel Douglas product. Just look at the Flightdeck it's the same as the MD-11. It was merely released after Boeing took them over.

As for getting the specifications wrong, Boeing have been conservative in their estimates. This means that they don't have to end up paying compensation to airlines when the final product can't do what it said on the tin.
 
Dougloid
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 10:40 pm

Quoting BoeingBus (Reply 11):
Also, on a final note... Boeing did Airbus a favor by removing MDD from this equation. It helped them a lot on pricing aspects with less competition in play.

Boeing got sidetracked with this merger... Integrating the defense groups and closing down the MD11, layoffs, among others tasks.

Truer words were never spoken. Consider the position Airbus could be in today if they had bought McD-D commercial lines. Boeing singlehandedly removed the only legitimate competitor in the widebody field...perhaps they did it to keep Airbus out? Who knows? A huge opportunity was missed by someone.

Quoting B707321C (Reply 27):
And the reason why boeing is doing better the last year, is probably mostly due to the foreign exchange rate. A weakened dollar really helped US and Boeings export. The last couple of year the dollar has dropped in value by more than 40%. Which in turn gives non-us airline the possibility to by Boeing products much cheaper in local currency than expected. I am will say most of Boeings improved sales the last year is due to this effect, rather than change in management or improvement in product range.

That's only part of the equation, although it has certainly not hurt. I would be really surprised if the contracts for sale do not contain some sort of parity clause to even out the currency exchange rates, or maybe they use a basket of currencies approach. Another thing is that the dollar has declined relative to the Euro....how so against other currencies such as the yen and the Canadian dollar?
 
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sebolino
Posts: 3605
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 10:56 pm

Quoting BoeingBus (Reply 6):
Look folks, the only reason Airbus got to be number 1 was that they sold tons of A320's to LCC and the A330 was a star. At the end, the majority of orders were for the A320. [...] Boeing is doing extremely well. Bluesky said it well - its a duopoly.

Then you agree that Boeing has lost the lead. You know the time were people at Boeing were laughing about Airbus, this small company which would never take more than a few percents of the market and only in western Europe ... This time is gone.


BTW, this thread is ridiculous ...
 
Slarty
Posts: 302
Joined: Fri Sep 16, 2005 5:23 am

RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 11:13 pm

A side note:

As to why Airbus is currently #1, surely this has to do with decisions made many many years ago ... perhaps as long ago as a decade. The decisions being made today will determine who'll be #1 several years from now ...
 
B707321C
Posts: 168
Joined: Tue Sep 27, 2005 11:42 pm

RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 11:13 pm

Quoting Dougloid (Reply 30):
That's only part of the equation, although it has certainly not hurt. I would be really surprised if the contracts for sale do not contain some sort of parity clause to even out the currency exchange rates, or maybe they use a basket of currencies approach. Another thing is that the dollar has declined relative to the Euro....how so against other currencies such as the yen and the Canadian dollar?

I think the majority of airlines does not hegde themselves or have clauses about currencies. Airbus however offer both. USD have followed roughly the same pattern against Canadian,Yen & Euro
 
Thorben
Posts: 2713
Joined: Fri Sep 09, 2005 10:29 pm

RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 11:19 pm

Quoting BoeingBus (Reply 6):
Surprising, the old bird 747, that many on here predict its demise, has sold more copies than than the A380 this year.

I count for the 747

2 for China Eastern
6 for Guggenheim
8 for UPS
6 for Jade Cargo

Makes 24, all freighters.

I count for the A380

10 for UPS (freighters)
5 for China Southern
5 for Kingfisher

Makes 20.

So your statement is true, but it's only for more. And all cargo. When was the last time Boeing sold a pax 747? The F version sells, because it is smaller than the A380, (not everybody needs the big plane), it's a lot cheaper, it has proven itself and it will be delivered a lot earlier.
 
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keesje
Posts: 14533
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 11:24 pm

Quoting BCAInfoSys (Reply 8):
Do me a favor and look at when those models were introduced. The A346 was available before the 773ER, and that's why it was purchased.

Do you actually still believe this? EK's A346's were ordered on the same day they leased the 777-300ER's, Virgin Atlantic ordered 26 A346's a year later in 2004. http://www.expresstravelandtourism.com/20030715/airwaves1.shtml

Another a.net urban legend that will never die.. no matter how many times it gets defused..
 
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RayChuang
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 11:25 pm

Boeing's biggest blunder was not to develop a true A320 competitor until the arrival of the Next-Generation 737 in the 1997. If Boeing had just developed the 727 powered by two PW2037 or RB.211-535C engines in the early 1980's it would have effectively cut off A320 sales almost on the spot.
 
boeingbus
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 11:32 pm

Quoting B707321C (Reply 27):
A weakened dollar really helped US and Boeings export. The last couple of year the dollar has dropped in value by more than 40%.

False, Airbus prices their aircraft in dollars not Euros. Airbus was just fortunate to have currency hedges, like most multinational companies. Value of the dollar had NO effect on sales. As both Airbus and Boeing sell their aircraft in dollars.

Quoting Sebolino (Reply 31):
Then you agree that Boeing has lost the lead

I never disagreed that Airbus sold more and had more deliveries in the past 3 or 4 years. But the pendulum is coming back to Boeing. Don't you agree?

Quoting Sebolino (Reply 31):
You know the time were people at Boeing were laughing about Airbus, this small company which would never take more than a few percents of the market and only in western Europe ... This time is gone.

Yes, this is the after effect of what happens when governments heavily subsidize their industries? it distorts the marketplace. Now, I personally or we can't blame Airbus for this. They had every right to get the government loans as this was an agreement made by the US and EU. Airbus has an amazing product, it sells, and employs many in Europe as well as in the US. All on the shoulder of EU taxpayers - excellent! Many here on A.net can get so bitter with Airbus but last time I checked 40 to 50% of the A380 is made with US components. It's a win-win situation.

But now that the playing field is level, let Airbus get their own financing like most companies do... at a bank and not governments.
 
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sebolino
Posts: 3605
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 11:43 pm

Quoting BoeingBus (Reply 37):
Yes, this is the after effect of what happens when governments heavily subsidize their industries? it distorts the marketplace.

Sure , it's so easy. If the EU wants to be number 1 in all sectors it just have to subsidize everything. Very easy.

Now on a serious note, are you implying that the loans repaid by Airbus are lowering the prices of the planes so Boeing can't compete ?
For a strange reason, Boeing has subsidies and doesn't pay them back, but you don't talk about it.
 
B707321C
Posts: 168
Joined: Tue Sep 27, 2005 11:42 pm

RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 11:45 pm

Quoting BoeingBus (Reply 37):
False, Airbus prices their aircraft in dollars not Euros. Airbus was just fortunate to have currency hedges, like most multinational companies. Value of the dollar had NO effect on sales. As both Airbus and Boeing sell their aircraft in dollars

Airbus's functional currency is EURO. Currency hedging is always done as as risk management tool, has nothing to do with fortune or luck. Do you really think that major international carriers like Air France, Lufthansa etc. are having contracts in USD with Airbus ? I don't think so! If they do, I should offer them a Risk Management seminar!
 
redflyer
Posts: 3910
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 11:49 pm

Quoting BlueSky1976 (Reply 3):
The reason why Boeing lagged behind Airbus wad due to some bad managerial decisions



Quoting MarshalN (Reply 5):
Boeing was a pretty poorly managed company in the 90s, really.

Boeing lagged because of the incompetent leadership of Phil Condit. Period.

Quoting Sebolino (Reply 31):
Then you agree that Boeing has lost the lead. You know the time were people at Boeing were laughing about Airbus, this small company which would never take more than a few percents of the market and only in western Europe ... This time is gone.

Very true. This is a classic case study in business schools - how an upstart is able to clean out the clocl of an established business because the established business doesn't take the upstart seriously. Very valuable lesson to be learned by studying the Boeing/Airbus rivalry.

Quoting RayChuang (Reply 36):
If Boeing had just developed the 727 powered by two PW2037 or RB.211-535C engines in the early 1980's it would have effectively cut off A320 sales almost on the spot.

You really think a re-engined 727 would have kept the 320 off the market? Personally, I find that hard to believe. First of all, because no matter what was on the market, Airbus was determined to become a big player so they would have developed the 320 anyway. Second, I can't imagine slapping new engines (albeit a lesser number of them) on a 727 would have improved its performance and economics enough to compete with the 320. Boeing re-engined the classic 737 and it still couldn't compete with the 320 until they engined and re-winged the 737 to create the NG.
 
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BlueSky1976
Posts: 1893
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RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 11:54 pm

Quoting Zeke (Reply 28):
The airline, Asia's most profitable, needs an aircraft that can fly more than 250 passengers on so-called medium-haul flights of less than 7 hours.

Why the hell they haven't ordered 787-3 yet is beyond me...
 
boeingbus
Posts: 1545
Joined: Sat May 29, 2004 12:37 am

RE: Boeing's Bad Miscalculations

Wed Oct 12, 2005 11:59 pm

Quoting Sebolino (Reply 38):
Now on a serious note, are you implying that the loans repaid by Airbus are lowering the prices of the planes so Boeing can't compete ?

Well, loans are paid if planes are sold. That is my understanding? Am I correct? Just imagine you get a loan on a BMW, and you only pay if you drive??? So if you lose your job.... and you don't drive to work. Well, I guess you don't have to pay your car loan. It's one less bill to think about. I would love those type of loans. Wouldn't you?

This allows Airbus to take on higher risks as the company has less risk exposure. I hope this analogy is clear.

Quoting B707321C (Reply 39):
Airbus's functional currency is EURO.

Yes, but when EK looks for new planes, both bids are in dollars... well, what advantage does the airline have? Are you saying that Airbus' bid is priced higher? Now, we know that is not true as both A and B are extremely competitive.

How does Airbus do it??? As I said before the company is protected from dollar fluctuations due to hedging practices. Simple as that. Airlines will not buy Boeing because the currency favors the dollar.
 
jacobin777
Posts: 12262
Joined: Sat Sep 11, 2004 6:29 pm

RE: Boeing's Bad Miscalculations

Thu Oct 13, 2005 12:06 am

Quoting Sebolino (Reply 31):
BTW, this thread is ridiculous ...



Quoting Sebolino (Reply 38):

Sure , it's so easy. If the EU wants to be number 1 in all sectors it just have to subsidize everything. Very easy.

Now on a serious note, are you implying that the loans repaid by Airbus are lowering the prices of the planes so Boeing can't compete ?
For a strange reason, Boeing has subsidies and doesn't pay them back, but you don't talk about it.

then why do you consistently respond to this thread?  confused  crazy 
 
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RayChuang
Posts: 8139
Joined: Sat Jun 24, 2000 7:43 am

RE: Boeing's Bad Miscalculations

Thu Oct 13, 2005 12:09 am

Quoting RedFlyer (Reply 40):
Second, I can't imagine slapping new engines (albeit a lesser number of them) on a 727 would have improved its performance and economics enough to compete with the 320.

The 727 powered by two PW2037 or RB.211-535C engines would not only be substantially more fuel efficient but vastly quieter than the 727-200 powered by three JT8D turbofans. Just these two factors would have kept many airlines in the 727 camp (remember, many European airlines were major operators of the 727-200 models), and the plane would have been available earlier than the A320.
 
B707321C
Posts: 168
Joined: Tue Sep 27, 2005 11:42 pm

RE: Boeing's Bad Miscalculations

Thu Oct 13, 2005 12:17 am

Quoting BoeingBus (Reply 42):
Yes, but when EK looks for new planes, both bids are in dollars... well, what advantage does the airline have? Are you saying that Airbus' bid is priced higher? Now, we know that is not true as both A and B are extremely competitive.

How does Airbus do it??? As I said before the company is protected from dollar fluctuations due to hedging practices. Simple as that. Airlines will not buy Boeing because the currency favors the dollar.

Airbus has much higher risk than Boeing, due to currency fluctuations. If airplanes are priced in USD. Well, Boeing has all its cost in USD, which means no risk. Airbus have a lot of its cost base in EURO and by law have to pay taxes etc in EURO. Loans are in EURO etc. So, when USD falls, Boeing becomes more competitive, Airbus become less competitive. The degree of this can be discussed, based on level of hedging etc. This is a risk that Boeing (and a lot of other US companies) can ignore. The opposite happened 3-5 years ago.

If you track the currency movements against relative sales performance for A & B and adjust for some time lag you will statistically get a good correlation.
 
manni
Posts: 4049
Joined: Thu Nov 08, 2001 1:48 am

RE: Boeing's Bad Miscalculations

Thu Oct 13, 2005 12:19 am

Quoting DfwRevolution (Reply 13):
Still, Boeing deliveried twice as many 763ER as Airbus has backlog for A332, and the 787 launch customers have already exceeded the A332 sales

The A330-200 is just over 7 years in service, while the 767-300ER is just under 19 years in service. Airbus accumulated orders for 302 A330-200 aircraft, while Boeing has firm orders for 176 787 aircraft in ALL versions. Boeings real competitor (atleast they tried) to the A332 was the 767-400 wich must have been the worst selling commercial aircraft ever, after the concorde.
 
Glom
Posts: 2056
Joined: Sat Apr 23, 2005 2:38 am

RE: Boeing's Bad Miscalculations

Thu Oct 13, 2005 12:38 am

Quoting Manni (Reply 46):
Boeings real competitor (atleast they tried) to the A332 was the 767-400 wich must have been the worst selling commercial aircraft ever, after the concorde.

And after the A345, which has sold 26 compared to 37 764ERs.
 
manni
Posts: 4049
Joined: Thu Nov 08, 2001 1:48 am

RE: Boeing's Bad Miscalculations

Thu Oct 13, 2005 1:03 am

Quoting Glom (Reply 47):
And after the A345, which has sold 26 compared to 37 764ERs.

Yes, you're right, I overlooked that one, aswell as the 5 777-200LR aircraft.  Wink
 
boeingbus
Posts: 1545
Joined: Sat May 29, 2004 12:37 am

RE: Boeing's Bad Miscalculations

Thu Oct 13, 2005 1:10 am

Quoting Manni (Reply 48):
, aswell as the 5 777-200LR aircraft.

Ok Manni.. what are you smokin??? eh 772LR hasnt been delivered yet. There IS lots of interest from many all parts of Asia as well as AC. Don't forget the cargo version of the 772LR. So let the bird prove herself first. geesh... stop trying to find something wrong when there isn't anything wrong. you doom and gloom people! 772LR is the most capable plane out there. Give it a rest.

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