Saturday, October 8, 2016

Does Qatar Know Something We All Don't Know About The Max

Al Baker: “For us to mitigate the risk, we had no alternative but to order the reliable 737 family of aircraft.”

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Al Baker is a shrewd and wise business man who does not make knee jerk retaliatory moves towards manufacturers for whom he has great needs towards the fortunes of Qatar Airlines. The recent Letter Of Intent (LOI) for 60 Max aircraft was more than a warning shot over the Airbus bow. It was an unleashing of an offensive effort coming from Al Baker's hip pocket after his former true intentions of making Airbus his premier supplier of Qatar's aircraft. A LOI is a gentleman's agreement with an "if" statement somewhere in that letter. 

Al Baker got Airbus' attention and can salvage something for Boeing if he does view things directed towards doubts with Airbus' capabilities. 

He has expressed the heart of the Airbus disappointment in a not so cryptic terminology. He is not happy with the failure of the A-320's GTF engine from its start-up. The GTF engine theory did not live up to its promise and needed extensive re-work. The A-350 market performance displayed a 90% reliability numbers with its first four Qatar deliveries.

What was not said and is held close the Al Baker’s vest, “what are the A-350 actual efficiency numbers in operation from the desert region?” It can be speculated those numbers too have stunned Al Baker's love of Airbus product. 

Boeing is coming out with an error free 737 Max with a proven engine having a 14% efficiency improvement over former models. Al Baker said so, mentioning what's behind Qatar's intent. They can get the "Max" sooner rather than later with an operationally sound engine for Qatar's desert region. It's kind of a big deal. Boeing can still lose the market battle if they drop "ball" on the goal line. 

But Boeing must prove itself under a single aisle LOI after which Qatar has already ordered 50 confirmed A-320 NEO’s, while waiting for its Airbus deliveries. But... they canceled four A-320's already. Another sign Boeing has a chance and is positioned well to step-in, and steal the charge away from Airbus, which it seems they have already done that little thing.

The spear is pointed towards the customer's operational heart using commonality. Watch the 737 Max-8 test pilot comments, "This avionics display on the Max looks just like the 787,747-8i and 777X displays". Therefore, when a Boeing customer orders across types they are buying pretty much the same commonality for which its pilots, maintenance and passengers will depend on while having a high valued experience both on the bottom line, and just the bottom in the seat.

Qatar has just ordered 40 Boeing wide bodies with intent on 60 737 Max after the first capstone order for 60 777X when it was first announced. In there, somewhere, should be equal opportunity for Airbus, but you can't find it only when reading about four NEO cancellations with Qatar.

When the Boeing's 60 LOI are finalized, then Boeing must deliver on its promise as it has learned a lesson from the Airbus debacle. Al Baker has already read and validated the tests reporting for the Max before it pivoted towards Boeing. He really bought the whole family of aircraft for Qatar as a common aircraft line from Boeing. When locking in on the Boeing wide bodies, Qatar also locked in on the Max. When the Max order is finalized, then look at the Qatar booking options, which would point the way for its future plans. After-all they optioned for 30 787's when they bought the first thirty 787. Now they have just purchased those 30 options because the aircraft just "plane" works well.