For every wide body built and delivered there are two
single aisle going out Boeing’s door. This brings several questions to mind.
One, is how long can this pace be maintained? Two, how can Boeing “flip” strong
Airbus customers over to Boeing when building up of its backlog?
In answering these questions, a key Boeing strategy must evolve. It is hard to flip a customer because of “fleet commonality” advantages. Otherwise known as having a fleet consisting of only one type of manufacturer with all types operating similarly. Having an all Airbus or Boeing fleet is the goal for each. It builds an almost impregnable wall around the customer, and keeps it from switching it inventory from one manufacturer to another.
There is another class of customer having two or more
fleet manufacturers in its inventory. These are usually mega operations fishing
for the best deal or the best fit for its operation. Anything goes when
replacing or expanding its inventory. This is an exception from the sole source
customers. The second question is wrapped up with the sole source customer of how to
break the customer strong hold for having only one manufacturer and only one. Airbus has
flooded the market in orders with its single aisle offering, Boeing must catch
them in the market place having limited opportunities as fleet holders decide
which manufacturer is best for its operations.
The Boeing answer is through commonality for all its
models. If flying the 737 then flying a 777 would be very similar as well as
maintaining various types of one product source. A common bond with its inventory makes a company
more efficient regardless of performance advantages within a one type of
aircraft such as a single aisle version. Boeing has its work cut out breaking
up Airbus sole source customers and flipping them into Boeing customers. Strategic
keys are the 787 and 737 programs.
If an Airbus customer makes a fleet expansion or renewal
then it will likely be an Airbus purchase over Boeing from convenience and
efficiency going forward. Boeing has to offer a remarkable alternative for
changing the sole source dynamic.
This opens up the third question. Does Boeing have the
remarkable alternatives to crack Airbus’ strongholds over its customers? Yes, the 787!
The short answer is found in certain areas where it does have that remarkable advantage. Even though Airbus has made a valiant wide body attempt, it still falls short of Boeing's long term proposal from its competitive 787 offering. In time the 787 will make a significant statement over the A-350 as those performance numbers make the 787 the wide body leader in its class.
The 777X is
completing this strategy as it will revolutionize the ultra-big concept away
from the 747 and the A-380 as a more sensible way to reach long range markets.
Both Boeing entries is taking time for fracturing the Airbus market and was also late
in the commonality game coming to the market. However, when this advantage is realized, then the
single aisle orders will open up from airlines seeking commonalty as an
efficiency metric for its operations regardless of its current fleet status of
having just one source for fleet operations. (see Juneyao order)
The Max may be argued better than the NEO, but the difference are too close for flipping an Airbus customer as they too hold a common fleet source.
The Max may be argued better than the NEO, but the difference are too close for flipping an Airbus customer as they too hold a common fleet source.
The 777X will be a remarkable change that Airbus is no
position to address it at this time or in the foreseeable future. It will change
fleets from top to bottom for the airlines. Duo fleet operation are
cumbersome and less efficient than having just one source for its fleet
inventory.
The 777X can and will start a gradual change toward having a complete and common fleet of aircraft from top to bottom. The 787 by large numbers is changing those who have since received its first 787’s in the last five years.
It is opening up customers who own the 787 with the convenience of owning both the Max and 777X, when a fleet needs those types through a planned fleet renewal or fleet expansion.
The Boeing goal it to flip Airbus customers into Boeing customers and it will come with the Boeing wide body family of aircraft.
Boeing needs another 1,000 single aisle orders to match the Airbus backlog. Boeing can keep its current production pace going for another five years with today's current backlog. It will need to fill many more orders before feeling confident about its long range plans against arch rival Airbus. Product commonality is the long term lynch pin going forward.
Hence, a need for market place analysis and strategic sales planning where sales for a 777X translates into multiple sales of its single aisle for the same customer as time moves forward. When that strategy will work, it will be over time and not have an immediate impact while questions one and two are answered. The current Boeing build pace is set up for the next five years.
The 777X can and will start a gradual change toward having a complete and common fleet of aircraft from top to bottom. The 787 by large numbers is changing those who have since received its first 787’s in the last five years.
It is opening up customers who own the 787 with the convenience of owning both the Max and 777X, when a fleet needs those types through a planned fleet renewal or fleet expansion.
The Boeing goal it to flip Airbus customers into Boeing customers and it will come with the Boeing wide body family of aircraft.
Boeing needs another 1,000 single aisle orders to match the Airbus backlog. Boeing can keep its current production pace going for another five years with today's current backlog. It will need to fill many more orders before feeling confident about its long range plans against arch rival Airbus. Product commonality is the long term lynch pin going forward.
Hence, a need for market place analysis and strategic sales planning where sales for a 777X translates into multiple sales of its single aisle for the same customer as time moves forward. When that strategy will work, it will be over time and not have an immediate impact while questions one and two are answered. The current Boeing build pace is set up for the next five years.