Wednesday, January 28, 2015

The Bridge to The 777X Is on Solid Ground

Jim McNerney is confident about spanning time with the 777-300-ER order book. At least through 2018 and beyond during its transition to the 777X family of aircraft. Why, is a reasonable question anyone who doesn't believe anything coming out of Boeing? Sixty-three 777-300ER were ordered in 2014 because there is no comparable aircraft existing for its range, capacity and passenger comfort. This is a legacy aircraft worthy of another advanced protege. Referred to as the 777X project. It will reach fruition by 2020. Boeing simply needs a 300 unit backlog between now and 2020 for its current model 777-300ER. It now stands at only 237 orders to go since starting the count-down at the beginning of 2014. Watch 2015 and each succeeding year for 777-300ER orders or current customer reorders.

What an Airline would consider is its own transition period to the 777X from the 777-300ER. The classic model (777-300ER) is very efficient and has a proven capability that is unrivaled in today's airspace.

What about the A350-1000? Once built it may be optimistically equal to the older 777-300ER from its brochure pitch. That is what is driving the classic orders today. The A350-1000 has received about half as much ordered in five years than what the 777X received in one year. Once airlines factor in a new 777-300ER, they will see a bridge order from Boeing which will beat a new order from Airbus' largest A350. Boeing intends on about 407 seats on the 777-9X and 350 seats on the 777-8X. It's a Market crusher attacking both the A350 and A380 at the same time. The Boeing Aircraft tool kit will have more sizes in aircraft than Airbus. Each will exceed or meet airline expectation, when they structure its routes and services tuned to market demands. Or it will have the right equipment for piloting in a new or expanding routes with many Boeing airplanes available.

There is only one area Boeing needs to address in the next five years. It is either with the bottom end of the the twin aisle or the top end of the single aisle. The 737 200c is a consideration for trans continental or announcing a roomier twin aisle  787-300 seater for trans-oceanic travel of 5,000 miles. Boeing is already committed with Ryan Air on an order for 737-200C's for about 199 seats, but no more than 199 passengers. Many competitors are looking at its metrics and are waiting to see if Ryan Air clobbers them in Europe with this particular MAX. If they do, many more 737-200C's will follow. Probably in the Indonesia region. Boeing has not yet zeroed in on the low end of the twin aisle 787 until after the 787-10 is in delivery mode. It will be a easier effort to do so after the -10 moves through testing as the -9 had completed its testing with a no mishap in process. A four type 787 is Boeing's ultimate goals for this family of aircraft.

Now for Business meeting quotes from:

Boeing Identifies Order Bridge to 777X

McNerney about the 777 current orders:

We expect demand for the [current] 777 to remain healthy through the end of this decade,” said McNerney. “With the new airplanes scheduled to entere final assembly in the 2018 time frame, this transition will leverage new manufacturing processes and technologies being proven on the current 777 to optimize the 777X production system.” Boeing’s backlog for the current 777 stands at 217 airplanes, enough to cover more than two years' worth of production. Boeing delivered ninety-nine 777s last year."

I think it is a sign that the capability is an enduring capability and the competition is…I hate to say it this way, but there is not much competition with capability,” added McNerney. “So we’re in a fortunate position here, and it’s one we’ll shamelessly take advantage of.” 

The company saw further positive developments in the widebody sector with deliveries last year of 114 Dreamliners, setting a new record for any twin-aisle airplane. Company CFO Greg Smith reported that unit costs for the 787-8 dropped by 30 percent over the span of time it took to deliver the last 175 airplanes, and that he expected the program to turn “cash positive” this year, ahead of a production rate increase from 10 airplanes a month to 12 in 2016.
The commentary by McNerney and Smith came as Boeing announced an increase in fourth quarter profits of 23 percent on record deliveries of 195 airplanes, and $12 billion worth of orders driven mainly by strong demand for 737s. Boeing Commercial Airplanes saw a 15-percent increase in revenues to a record $16.8 billion during the period.