· Market Conception 2004-2011: The market learned about the 787 on January 23, 2003. Boeing announced the 7E7 and the world paused, analyzed and placed orders in great numbers from 2004-2011. At the end of 2011, its widebody order book stood at 752 ordered.
· Market Experience 2012-2015: The second period starts after first delivery to ANA on September 23, 2011, and ended with 368 additional orders from 2012 while delivering 363 of its 787. All lessons are learned during this period.
· Market Saturation 2015-2016: The third period is the critical market saturation period where potential widebody routes for this type saturates the playing field, thus squeezing any competition into taking left-over orders remaining. The delivery pace fills the market with 272 delivered 787’s and tapering of orders for another 157 of the 787’s.
· Market Pause 2017-2018: The market saturation had reached a climax and ordering pace drops only having orders coming from customers who are expanding fleets and not replacing fleets. The first three stages are completed and the ordering binge is over as the 787 matured in operation with its customers who learn of its value through its operations on a daily basis.
· Market Renewal 2018-~: The last segment starts in 2018 as some fleets already have been flying the 787 for five years and the lower fuel price glut is over. Time to drop old frames flying under low fuel prices and trade-in for new wide-body aircraft. Some 787’s may be traded for newer 787-9’s or expanding fleets with 787-10’s. The used 787 market emerges as a continuous flow as long as the 787 stays relevant.
As in all airplane histories, there is a beginning, middle, and end (BME). The timeline lengthens for the BME’s as aircraft evolution become more effective for its purpose. The Wright Brothers, “Wright Flyer” 1903 (prototype-four flights) until the British WWI Sopwith Camel which demonstrated its expanded evolutionary shelf life from 1917 through 1919.
Starting with Boeing 707, 727 and 737 progressions: (~) signify counting continues
· 707 Built from 1958-1979 Years: 21
· 727 Built from 1963-1984 Years: 21
· 737 Built from 1967 ~ Years: 50~
· 747 Built from 1969 ~ Years: 48~
· 757 Built from 1981-2004 Years: 23...in service for 36 years
· 767 Built from 1982 ~ Years: 35~
· 777 Built from 1995 ~ Years: 22~
· 787 Built from 2011 ~ Years: 6~
From the above listing of Boeing aircraft, there appears a life cycle which suggests as technology and engineers improve aircraft so does the operational life span increase further. The 757 is an anomaly but it was built for a longer period of time than both the Boeing 707 and 727. A Boeing decision was to cease production as the 787-300 was in a concept production schedule at that time. It could have been produced for another fifteen years had the 787-300 never been considered. Currently, a 797 is under consideration which would straddle the gap coming from single-aisle 737 to duo aisle 787.
If Boeing had not designed the 787-300 during the 2004 time frame the 757 would continue its building to date and competing against the A-321 NEO. It most certainly would have been re-engined and had a complete 787 avionics suite added. Using winglets and other advances the 757 would remain an order item for customers until a 797 emerges by 2020. That would make the 757 an almost forty-year build cycle and thus supporting the theory of advancements increase life cycle for every succession of airplane type.
The only consideration halting this theory is a dramatic market change and an emerging technology that would cancel building a model. The (~) sign is representative of an ongoing duration of a build timeline. The 757 has two other models in production dating from before its own inception into the market, the 737 and the 747. The 747 is reaching an end and will close-off soon and probably with a presidential aircraft as its opus.
The four-engine concept has become a market place “White Elephant”. Even the very efficient A-380 is losing interest faster than Airbus can build it. It too should stop production by 2024, with or without a NEO package hung on it. Airbus doesn’t want to spend more investor money required only to build fifty more A-380s. The 777X masterstroke has caught Airbus flat-footed in a limited widebody market. That observation ties into the current order cycle lull that the mega makers are now experiencing. During 2017 Boeing will have a hard time generating significant mid to larger widebody order. Both the 787 and 777 families of aircraft will dip in orders as has it often done on a periodic basis. Looking back on the 787 programs.
Fig. 1 The historical Order and delivery chart since 2004 -2017 YTD
This brings us to the point of what will happen in the widebody order market for 2017. The players are the 787, 777X and 747-8. The 747-8 is a scratch out as it fades gracefully into the horizon. The 777X has had a quiet period for some time and it will burst out 20 Singapore Airline orders with the 777-9X and then save Boeing's 787 widebody order year another of its 19 787-10's before years end. This is already written into a Letter of Commitments from customers. Only the final contract language remains to be completed with signatures included. Boeing should go plus fifty 787 orders in 2017 and then another 25 777 orders during the year. This does not even count on the Emirates order that could be completed at year's end. If it isn't confirmed during 2017, the Emirates status will be most definitely solved in 2018.
One thing holding Emirates back is the aforementioned market place. It is stalled on widebodies at this time. The Market has filled its long-range routes with delivered 787's and the just delivering A-350's. The market is waiting before jumping on new orders until fuel prices rise and old aircraft are retired as the fuel price changes make it more expensive. Cheap fuel has saturated the widebody market as carriers can fly old equipment and make money doing so. The widebody demand has shrunk from this condition alone.
The long-range route exploitation from superior aircraft has limited slots available while the Single-aisle market is in a continuous churning mode for new orders. It takes a huge fleet to operate regional single aisles under 4,000 miles. It takes a continuous replacement regimen keeping businesses fresh within the single-aisle market. Southwest Airline, a Boeing exclusive customer, is an example for this blog. It will need to replace and advance its fleet over the next ten years and beyond in a continuous churning of out with the old, and in with the new. Factor in growth and the Boeing single-aisle order machine will not pause beyond 2017.
In fact large Boeing single-aisle orders are not yet booked but signed off with LOI's. Boeing will post more orders in its blog before quarters end.
The 2017 order outlook once again becomes more of a mystery than an industry-wide slump. There is some low hanging fruit to be plucked for airline geek pallets. This order fruit may show-up in 2018 so Winging It splits the difference between dismal and ordinary with a few surprises waiting until year's end as always. My unofficial prediction for Boeing is 450 single-aisle ordered and another 150 wide-bodied aircraft of all types making a 600 Boeing order year.
The year 2013 jumps out as the year the 787-10's were offered for sale. However glancing at the year by year tally, it is quick to notice the ebb and flow of the program orders while the deliveries built up to its current high of 137 built 787's in one year.
The analysis becomes a straight line when throwing out the 787-10 orders during 2013. Boeing typically has taken in an order tally from 40-99 after its entry into service. In 2015, Boeing received 99 orders for its 787. This largely due to a new customer ordering up 19 Norwegian air 787's and the unidentified group had 23. Without those two orders, Boeing would have only booked 57 of its aircraft which would put it right in line for the years entry into service in 2011.
This does not even count on the Emirates order that could be completed at year's end. If it isn't confirmed during 2017, the Emirates status will be definitely solved in 2018. In order to reach 150 wide-bodies, Boeing must secure 70 additional widebody orders not yet identified as possibilities.
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