Friday, July 11, 2014

Pre Farnborough 777X Emirates Order Signing For 150 Was The Order Show

Why did Emirates announce the signing for 150 of the Boeing 777X types just few weeks before the show? This is a pondering blog today, the why's are hoped to be answered in a speculative fashion. First, let's set the table for this speculation. Normally an order of this stature is set for a big airshows, like Farnborough's biannual event. The other being the Paris expose. Hence every year there is an opportunity for bragging rights for either Boeing or Airbus.  This long sought order by Boeing was announced at the Dubai announcement party when it rolled out the 777X as a launch.  250 orders and commitments sprung forth as a rebuttal to Airbus. The commercial verdict was supremely positive, and Boeing has been moving quietly and swiftly towards those commitments announced at Dubai. Emirates could have waited another two weeks to announce the consummation of its order with Boeing at Farnborough, but did not. This triggers speculation and anticipation for the show itself since that cat is out of the bag.

The second observation, is the single aisle market, which has had a robust three years of stacking both Boeing and Airbus orders upon the market place. What remains to be ordered or committed is at  Farborough this year, which will be not be an eye brow raising event, when maybe 200-300 single aisle, in combined sales, are announced for both Mega builders.

The wide body account is  going through a Sea Change moment as customers re calibrate its needs for twin aisle by type and size. What will be important is where that sea change will drift. The twin aisle is in transition, has entered into uncharted territory as each customer is watching the other. A signal by Emirates with its cancellation of 70 Airbus A350-900, is a troubling signal for Airbus as it sees the Boeing 777X order finalized prior to the show. The preshow order signing is kindness given to Airbus, as it now will not suffer as much humiliation during the show, since the 150 777X order is not the topic of discussion. The Farnborough show does have room for another shoe to drop on Airbus, as it could have another Middle East Customer emerge with Boeing with a change of heart order for the 777X's. That remains to be seen, which makes this Farnborough worth paying attention to, during the next two weeks are the "what ifs"  in play, and follow-up analysis will give many writer an occupation of blogging afterwards. Finally, duo aisle contemplation. Are there anymore 777X orders springing forth in the form of commitments? Twin aisle plastic will have some announcements, but not in the "Sea Change Category". I would think one more major order for the 777X is a "hanging chad" for Boeing that can be announced, as it falls into place during the show. The sway of what others are doing (Emirates) will call that chad to fall. They (regional competition) needs to compete, and stay on the order book heals of its competitors! This would be a call for action in the Middle East or the in Far East as the Arabic states expand into the Orient at a rapid pace.

Concluding Farnborough thoughts. This years show will be defined as the sum of its parts. It will conclude with a slight tip towards a gradual "Sea Change" event during the announcement segment of the show. Boeing is back into the game and is no longer in Airbus' wake. The show will have a few surprises but not a lot of surprises. Take those surprises and analyze against the bigger picture from the last two years.
Airbus banked up a few announcements in its showman style, it brings to the table every year. Boeing let its customer run the pacing of the announcements at the show, and continue its extended march to the top of aviation's pile of orders.