Sunday, March 12, 2017

Boeing Must Formulate The 797 As An Added Value For Its Famliy of Aircraft Before Announcing.

"Udvar-Hazy isn't convinced that Boeing has figured out the magic blend of price, performance and production costs that will make the 797 a best-seller".

He has something in mind but doubts Boeing's resolve for such a project. However, United Airlines begs to differ as it smugly acknowledges Boeing's sales pitch honed in San Diego recently. 

"What we've seen so far is very, very interesting to us," Andrew Levy, United's chief financial officer, said in an interview. "We certainly hope Boeing launches the airplane. We think there is a need for it."

Two leasing companies and one major later there is talk for which makes Airbus anxious as it has more production dragons to slay in the mean time. Boeing is looking for a three customers announcement for the 797. It will go deep into the 787 play book when forming this aircraft. It will only offer a 797 if it can drain the Boeing money pit it built up from the 787 program by using the bag of tricks Udvar Hazy was looking for in his statement.

Udvar-Hazey is crafty purveyor of aircraft and when he sees a gold nugget on the ground he will fail to mention its existence while United airline is an over anxious prospector liking the assay report beyond expectations. There are others who could use this version of a 797 and many are the ones who make a living over the Atlantic. Could this be the Ryan Air Silver bullet , or the Norwegian Air Saturday Night Special? Winging It thinks so and Boeing has a grasp of what its customer will do in this case. Udvar-Hazey is a middle man of leasing and his customers are full of wide bodies ordered. Boeing would need to make a business case directly to Udvar-Hazey's customers before he will show his hand in favor of a Boeing concept. When the announcement shoe drops for the 797 there will be a robust list of customers sweeping in for this latest gold rush of airplane purchasing.

The A321-NEO taught Boeing a severe lesson on airplane gamesmanship. Boeing was stalled over the 787 program by billions spent.  Airbus stuck it to Boeing with its largest single aisle making so many orders. Boeing has not recovered since that NEO play. It is looking for redemption in the market place and the 797 could be that counter as the 787-8 or 737 Max family doesn't slam the A321 NEO out its airspace. The market place is rapidly moving towards the Middle of The Market (MOM) without even Boeing sitting at the MOM table. A Boeing MOM would put Airbus in a bind as it wrestles for market dominance in the Wide Bodied realm. The A-380 is a sunk cost and a lost leader. The A-350 family failed to over-take the 787 family of aircraft. In fact there is little room remaining in this market since an Airbus passing lane has merged into the main traffic lane.

Boeing, after-all, will pull the MOM trigger under its airshow smirk in 2017. It is competing in a market place dog fight with Airbus. Out of spite it will announce this A321 NEO beater, and Boeing has already the customers who will support this offering. China, an emerging market, and is geographically situated for a five thousand mile duo aisle circle. The 787-300 was dropped because Boeing did not have a Chinese foot print at that time. Another decade later, China needs a higher density requirement where a single aisle is not well suited. Now there are at least three more 797 customers in the mix coming from China. People like the "Scoot" people need a MOM for its region flying in a 5,000 mile circle from Singapore. 

Without even going to the Middle Eastern airline giants, a keen market for the region's Euro-traveler has a definite use for a 797 MOM. India to Paris is within its range as an example. Then Haikou (Hainan) to Sydney Australia is also under 5,000 miles. A picture is unfolding for the airlines in a quest for a MOM having 240 seats going 5,000 miles while fitting in every terminal gate.

The driver stopping Boeing at this time is the list price or deal price for such an aircraft. Boeing knows the production and R & D costs of this paper example and it thinks it has it dialed-in costing to within several million per copy. If and only if Boeing can find five hundred orders in the initial market, it will be go time. This will be no moon shot as Udvar-Hazey fears. It will be a high flying off the rack melding of everything already spent building The Max, 787, and the 777X. The work is already set in Boeing's concrete and it’s a matter of airplane execution at this point. In less than six more months something greater will be said other than the United quote of "looking very interesting".