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Thursday, December 6, 2018

Boeing Says,"Meat of the Market"

It's has taken a while, but I think I know and I get it. The long thin routes are not where the money is found but its the best advertising focal point money can buy. The other philosophy is for passenger demand. Boeing has built two aircraft for an answer. One for passenger density, the other for distance traveled. The 777-8X mashes miles, not passengers and the 777-9X is the inverse of that proposition. Therefore as the Australian Aviation has published about "the resurgence of the 777-8X order book".

Does it make sense to haul 250 of your "best" friends for eighteen hours in a tube? How about 400+ friends going 7,000 miles for 16 hours. Boeing has explored the market and came up with the 777-9X and 777-8X configuration destined for 2020-2022 entry into service respectively. So the 777-8X sales surge is not expected until later as its 777-300ER's are of age to retire.

The 777-9X, the Boeing advertising giant, will come out in 2020, as the first lever for retiring the A380 completely according to data and customer preferences. The A-380 is a white elephant that cost Airbus more than its pride. Then the true market crusher arrives, the 777-8X. It will do more with less, an "old" industrial buzzword from the millennial generation. The do more with less crowd is buying the airline tickets today. They want comfort and space and not necessarily 18 hrs of flight time, but it wants Fiji islands instead, from anywhere in North America. Sounds like a millennial concept to me! Or Boeing centric ner-do-wells prefer the 777-8X for another gap filler.

Flying far and stuffing the tube is an Airbus dream. The A-380 was that bridge which became too far from its profit engine. Stockholders for Airbus will scramble when the NEW 777-X's comes forward. Airbus sycophants will just have to buy the A-350-1000's as its traditions require. The 777-8X is a design which only a computer data program can churn out when finding the meat of the market. 

The efficiency graph line starts high at take-off and then downward for about 5,000 miles reaching a point every mile flown at this point is at its highest efficiency and lowest costs and then at 6,000 miles it slightly nudges upwards until it runs out of the market. The Caveat is most seats are filled because it can satisfy the meatier part of the market. It's easier to fill 350 seats in the densest part of the market than 400 seats going halfway around the world from point A-B. The world's half is about 18 hrs one way or another and an airplane doesn't need to travel farther than its half. This is where the airline industry is today. 

However, the other data says 95% of the market lies in the 777-8X's reach. That sounds pretty meaty to me. Boeing algorithms say so too. Hence, the 777-8X pops out on the graph somewhere between LA and Tokyo. The low flatten line of efficiency falls within the "Middle of the Meat". Most restaurants call it Prime Rib on the menu. Boeing calls it the 777-8X. Who wants to fly west going 8,000 miles to Australia and who wants to fly east going 8,000 miles to Australia. Now you see how graphs can work. Either way, the 777-8X fills that market. Who wants a bigger load (777-9X) flying west to Australia from LA and who wants a bigger load flying East to Australia from New York? Gosh, this is getting serious and airlines remain behind to figure this out.

Even though the 777-9X has a bloated order book compared with the 777-8X. Emirates, a big one airline, is the reason. It has ordered 156 777-9X and is the World's largest A-380's holder which is destined to a boneyard closest to Tucson, AZ.  

Therefore, the Boeing graph chart has identified aviation's sweet spot. Twelve hours anywhere on a 777-9X and 14 hours everywhere on a 777-8X. More 777-8X sales are on the way once the first tests of the 777-9X succeed.

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