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Thursday, February 28, 2019

Project Sunrise A Boeing Necessity

Boeing is hoping Qantas Company will buy the 777-8X for its Project Sunrise selection for its Qantas Airlines. A win here for Boeing would be for bragging rights which it would relish having over Airbus. The potential deal is advertising money on the table so prices on a fleet order will plunge per unit ordered by Qantas at the end of its. project. The 777-8X is about 375 million as is but the price could plunge as this is a high profile deal for this type of widebody. Airbus, on the other hand, is modifying its A350 proposal to go the distance with passengers near 300. But Boeing has the wings and that GE9X engine.

The 777-8X is configured for about 353 seats, but distances and hours should give passengers more space and airlines more distance it requires. Both makers have formidable offers but since BA just ordered 18/24 777Xs the emotional momentum has shifted to Boeing's winning the Project Sunrise offering.

The 777-8x will drop off about 75 passenger seats, down to a sensible 275 passenger "load". It will have the folding 235-foot wing which Airbus will not match unless it wants its A350-1000 to fit into abandoned A-380 terminal slots found in about 60 airports around the world. The 777X wing will fit anywhere the 787 flies. Qantas is keen on Airbus at this time just for pricing advantages over Boeing's offer. Remember the advertising account and what a Boeing 777X selection would do for future sales?

Price will drop to about 200 million per unit making Alan Joyce a little more comfortable with big ideas backed by investors. The next question is how many orders. That discussing has already happened with the two big makers in the running. Nothing less than 20 units ordered would do for any manufacturer. I would guess the orders would flow as follows for the winner. Qantas must order 20 with a 20 option in place for ten years. Or in other words about 17 billion at list prices before discounts.

Aviation wars are a funny business and it's hard to predict how things will work out for any maker. But Boeing is more able to drop price than Airbus. It's more able to morph the 777-8X into a globe trotter as it will have slightly more range than the A-350-1000 configured for Project Sunrise. Boeing knows Alan Joyce wants 300 seats for this venture but "close" to 300 seats is what either maker will offer. A Boeing deal will be made because Boeing has the Wings and the Engines. Both makers can do the internal amenities for passengers, including a boudoir for most. Boeing can and will go 9,000 miles easily where Airbus will have to trick out an offering with more fuel and fewer seats to make that range.

Airbus will have to go 250 seats with its A-350-1000 and some extra fuel tanks to boot. Allan Joyce may think 250 seats is not profitable and what he had in mind. He wants those 300 seats! Ticket prices need to fall to fill 300 seats to go 9,000 miles each time. Going from Sydney Australia to London, westward, against the wind on most days is difficult and dangerous when the weather changes mid-flight. The aircraft may have to fly around a bit and burn more fuel and serve more amenities when it stays aloft for 21 hours instead of 20 hours. Egads!

The time on board will necessitate space and kiosks for the passengers and crews as well. People need to move around, sleep and browse about the cabin for 20 hours of duration. A seat can only stay so long at the movies or on the web. The amenity offering will be an interesting proposition most air travel people only think of after 12 hours in the air. Sleep is one part of that equation as is seat time. The open variable is plan B. Browsing the cabin.

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