Monday, July 21, 2014

Copy Paste The Emirates Deal In Cogent Language

Below is a great representation of what is out side the Farnborough orders extravaganza, and what it means to the Airplane market. Airbus scrambled once again to show up the Boeing order book, during the Farnborough affair. They pulled it off with 77 billion of paper sales over Boeing's 63 billion of like mannered sales. What missed the show is more important than the show itself. What's the order book at mid-year and what's the order book at year end, makes more sense than an Airshow order count. Finally, someone has written a solid presentation from this concept illustrating the big picture is more important than a four day blow out sale.

I would like to go on and on about the 787-9 because I'm actually the most excited than I have been about an aircraft since the the 787-8 flew from Paine Field, WA, around the world. 
  • Only landing in India ounce for a refuel (19hrs later) 
  • and then back across to Paine Field flying heading easterly 
  • completing all the way around the world after another 18 hours flying during the second leg.  (caution run-on sentence structure bullet points added)
That was fun to watch on Flight Aware charting.

Here below is a significant observation from Motley Fool publication as it deepens its understanding of the Boeing big game strategy. It breaks into the Boeing Psychic

Please click on headline below as Motley Fool has important advertising on its link, I don't. 

Below the link is the complete "copy/past edition", for lazy inebriated types.
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    What The Boeing Company's Historic Order Win Means for Aviation Stalwarts

    Boeing (NYSE: BA  ) recorded its biggest 777X order win of 150 jets from Emirates after the latter finalized the $56 billion deal last week. Emirates' firm commitment to the American aerospace major comes as another big blow to Airbus (NASDAQOTH: EADSY  ) . The Gulf airline cancelled an Airbus order for 70 A350s worth $21 billion at list price in June. Does this signal a deeper relationship between Boeing and Emirates, and a heightened rivalry between the American jet maker and the European major?

    Boeing 777-9X, Source: Flickr
    Boeing-Emirates relationship deepensThe Dubai-based carrier placed the order at the Dubai Airshow last November where the 777X program was unveiled, making it one of the best-ever launches in aviation history. The confirmation came in July. In addition to the 150 jets, Emirates has reserved purchase rights to order for 50 more. After cancelling its A350 order, chances are strong that Emirates will exercise the option.
    The airline would be purchasing both the 777X variants -- 115 of 777-9Xs and 35 of 777-8Xs. The 777-9X, which can haul 400 passengers, is the costlier version with a list price of $377.2 million, while the 350-seater 777-8X would cost $349.8 million at list price. The deal's value will increase to $75 billion if Emirates exercises its purchase right. However, plane valuation firmAvitas says that as there are massive discounts for big orders, the true price of the 150-jet deal should be around $31 billion. 
    The order makes Emirates one of the first airlines to be flying the GE-powered twin-aisle jet capable of carrying the same load as a jumbo. Emirates president Tim Clark said that with the 150 777X order, Boeing now has total orders for 208 777s that are yet to be delivered to the airline operator. Presently, the Gulf operator flies 138 777s. 

    Boeing 777, Source: Flickr
    The 777 edgeThe 777 family, dubbed as the mini-jumbo, has been Boeing's best-selling wide-body aircraft. With the next-generation 777X, the plane maker expects to usher in a new wave of growth.
    Boeing will start production of the 777X in 2017 and begin delivering the aircraft in 2020. This version is being developed on the tried and tested technology of the 777 and 787 Dreamliner that will not only help to integrate cutting-edge technology in the jet, but will also minimize development cost. Boeing claims that the 777-9X's engine is 12% more efficient than competing jets in this segment, while 777-8X offers 5% higher efficiency over contending aircraft.
    The Boeing-Airbus contest continuesDubai is an important air link, connecting Europe and Asia. This makes Emirates demand larger jets. It's the largest international airline operator by traffic and the biggest operator of Airbus' A380 and Boeing's 777. As Emirates operates in some of the busiest long-haul routes, it finds the ultra-long haul 777-8 and the 777-9 aircraft -- larger than A350-900 and the A350-1000, respectively -- to be better fits. 
    Emirates wants Airbus to overhaul the 500-seater A380s with the new Rolls Royce fuel-efficient engines by 2020, but the aero major has not committed so far. With Boeing's 400-seater 777-9X gaining traction with the airline, Airbus could be feeling the heat.

    Emirates A380, Source: Flickr
    However, Airbus can take heart from the fact that Emirates' move is part of the airliner's strategy of structuring its fleet. An analyst at Edison Investment Research says that Emirates is trying to organize its fleet, placing the A380 as its mainstay jumbo jet, followed by the 777X, and finally the 787 that will cater to routes that have less passenger traffic. The airliner is aggressively expanding to cater to increasing traffic, meaning that there is a huge avenue of growth for both Boeing and Airbus.
    The order cancellation has definitely spoiled Airbus' mood, but it isn't something new in the aviation industry. We've seen the 787 Dreamliner experience cancellations of 200 units. The fact that the A380 is central to Emirates' fleet strategy also ensures order flows in the future.
    Foolish takeawayThe competition between Boeing and Airbus to win higher wide-body orders is in full swing. Since most of the demand for these planes is coming from the Persian Gulf, carriers like Emirates, Etihad, and Qatar Airways are going to play a key role in the duo's wide-body backlog. Though Airbus saw Emirates withdrawing orders, it's not the be all and end all of the European plane maker's business. For Boeing, the huge order win is an unbelievable opportunity.
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