Saturday, June 18, 2016

Follow On To Motley Fools 787-10 Question

Motley fool has taken a questioned approach to the viability for the 787-10 program. After selling only 153 of its type during its first offering, Boeing has managed a niche allotment of orders having few follow on orders in the last few years. The well of orders seemed to dry up very fast. The next hope for the 787-10 will come from the "show me phase" of delivery.

An argument can be made via Motley Fools analysis, there are replacement slots for future 787-10 sales coming from the Boeing 777-200 aging fleet. The 787-10 is just as capable as the 777-200 only with a reduced fuel consumption. Rising fuel prices will save the 787-10 future program. Future orders can surprise program managers as oil prices go northward it will press the Boeing order book another 150 of its type ordered during the next decade.

The answer for the 787-10 program comes from several intrinsic conditions. One being the 787 achieves the industry standard for aircraft over the Airbus offering. The 787-10 will gain greater acceptance from this evolving condition as more 787 flood the market place.

The second condition illustrates how effective the 787-10 can be in higher density markets such found in Asia. The 787-10 can haul more passenger for less within a five thousand mile circle of any airport. Customer application of the aircraft will show the market how to make a profit from its place in the industry.

Having a third pillar supports the whole notion for the 787-10. The 777X program compliments the 787-10 as the market leaves the 777-200 behind and while the 787-10 will easily complete the mission already established by the 777 family and it will be a more advanced aircraft as a family member of the 787's already in service. 

That becomes the intrinsic value and inherent attribute for the 787 family. A familiar movie quote of "you complete me", becomes the 787-10 new theme of having value for any airline building its fleet around the Boeing family of aircraft. Having a mixed fleet approach of two manufacturers becomes a fools errand in the market. Having a family plan for any airline is a stronger position towards profitability for that airline's marketing  objectives.

Airlines who rearrange its own inventory towards a mono sourced inventory of aircraft reach a higher efficiency state greater than manipulating the manufacturer through its leverage of manufacturing duality of a purchase. Having faith in your own plan while not serving two manufacturing masters is the optimal condition for airline efficiency. The 787 is all about its efficiency.