Friday, October 7, 2016

Boeing, Order-up! Not 30 But 40 Wide Bodies and a Side of Single Aisles Super-Sized

Yes, Boeing has turned the tide for 2016 with 30 787-9, 10 777-300-ER and 60 more 737 Max as the LOI side dish. Some say it’s a $18 billion dollar promise from Qatar. It’s much more than market share and dominance. Qatar originally ordered a vast numbers of Boeing 787's (30/30) and A-350's (43 +37). Boeing has delivered all its initial 30 787 and Airbus, well Airbus has dithered the Qatar patience since it went into a hole when coming to this day's announcement. Qatar has now positioned itself to cancel some A-350 orders as Boeing now has 787, 777-300 and 777X added to the Books where Qatar ordered initially 43 A350-900's and 37 A-350-1000 which the first delivery A350-900 now resides under a cloud of under performing operational metrics.

This Qatar order pressures the Middle East as it seeks wide bodies in earnest. The Emirates order has come full circle after it cancelled its 70 A-350's several years back, and now news circulates about with a new order placement for wide bodies fulfilling its fleet replacement and expansion designs. Boeing is the leading candidate even though Airbus is in the order fight with Emirates, who is now more open towards any Boeing offers than any Airbus apology for biffing its original 70 A-350's.

Now Qatar, who built its fleet around the A-350 as its feature fleet wide body airplane, has turned 180 degrees with this mega billion order for thirty 787-9's and ten 777-300-ER . Then comes another 60 Max it wants as it’s under LOI soft negotiations at this time. 

The importance of the Qatar/Boeing order should not be overlooked in the wide body and single aisle market place. Competition in the Middle East is something where every nation in the region watches, and each with keen interest towards one another, causing Mid-East competitors to react. The Qatar order signals, names have been taken and they will soon kick "others" fleet's sterns.

Ouch, really Airbus, you lost this order after you where the company (Qatar) favorite with having Qatar’s 43 A350-900 and 37 A-350-1000 orders placed not so long ago. Then Airbus started delivering the A-350 first aircraft in a lumpy stream of stop and go for Qatar's displeasure. They were unhappy with the lumpy trial and error production technique where Airbus delivery schedules were uncertain.

Boeing's production efficiency help win today’s order and saved Boeing's 2016 order book. Having thirty 787-9's added is a near term solution. Let's not forget the ten 777-300-ER's as critical to the 777X production transition (not yet there but strengthening).

I can't imagine what price Boeing offered for both models as they desperately needed production slots filled during the upcoming 777 Year. It may have diverted Boeing away from a monthly production reduction in the next year. 

The sixty LOI 737 Max caught my breath as it catches the program back on fire with future customers. Qatar becomes a sales talking point for future Boeing 737 Max sales pitch. Future customers will wonder why the Max? while they get sound Boeing answers for the customer’s own operations. Part of the 737 Max LOI, is coming from receiving a Airbus “burn”. Perhaps Airbus wasn’t careful for what they wished for as they experience "Boeing like" supply chain issues of too much too soon supply strain. Qatar is not happy as thy fell behind its own expansion models from Airbus' dithering in the factory. Emirates and now Qatar, who’s next? The A-320 engine wasn’t ready and it was flawed, hence the Max order.

Boeing can capitalize with the Airbus production quandary only if they keep its promise with Middle East customer for delivery. It must keep on time with Qatar fleet plans. The Boeing product must beat the Airbus product on the ground and not in air since flying parity is so close between the two producers.

The ease of ground maintenance, information systems and longevity between service cycles makes the Boeing business case. If a Airbus delivery promise can’t be met, those NEO's on the ground becomes a moot point. "So what", if an airplane travels 100 miles further on a tank of fuel and your point is??? An airline can save millions with operation expenses and timely delivery of promises. Qatar Air gave Airbus a burn today as does Emirates when it canceled its huge A-350 order several years back. It sent Airbus spiraling with those cancellations. Now Boeing gets 40 more wide body orders and 60 LOI Max's when it desperately needs it. Airbus team meeting time, 6:00:AM Paris time tomorrow.