240 787 Delivered It's Reorder Time

Back in the day, about two years ago, "Winging It", predicted 2015 as a 787 reorder resurgence. One reason is for the extinction of glitches. A second reason is the reduction of the 787 order book. The 787-8 is 50% delivered in just three years. Another three years the 787-8 will be completely open for airline fleet expansions, within an airlines five year plan.. What Boeing has is production slots available for the 787-8 in reasonable fashion. One Airline who sits on its heals can option in rather quickly, when it identifies its fleet expansion opportunities. It sits just outside the China market. It is centered within the Asia region. The 787 design is a handmade design for the region. Who is it?

Better question:

Does Qantas have the nerve? If they do they need to convert its 787-8 options into a game changing order sooner rather than later, because Boeing has gone over the manufacturing hump. Boeing no longer has the supply chain uncertainty, nor does the errant battery problem come into any sales meeting conversations. Its main selling point is 20% better fuel, and it really works as advertised. You the buyer get to pick the colors. Qantas should not, or better stated, "will not" drop the ball unless they really want to remain an Icon of Australia's past, but it is not a standard in the world of travel. Unless Qantas has a big vision!

Qantas has:

Criky: 

Qantas versus Growth revives aviation-trade policy issues

"The key to that good news could be a decision to exercise some of the bargain priced options it has held since late 2005, when it first ordered or optioned up to 115 Boeing 787 Dreamliners."

"At the moment one of the key disadvantages for a “little” or “cautious” Qantas, no matter the quality of those arguments, is that Qantas is seen in trade and tourism quarters as attempting to stand in the way of this growth, saying “Not until I’m ready”."

The problem here is whether Qantas is a serious player in this moment of aviation history. Do they risk profits from lower fuel prices on a fleet full of the 787's? They obviously don't have those 115 on paper anymore, but do have a sizable chunk with Boeing's sales options. Just like a crime drama on TV its all about mode, means and opportunity before pulling the trigger on an order. Qantas has the means and the opportunity, but are they not motivated, or just scared to pick the phone up and ask for a meeting with Boeing sales department?

I "think" , they are ready during 2015 for making a move. The stars have aligned as risk on the 787 has abated. The performance numbers have been substantiated. Everybody says 20% less fuel needed for every NM flown. Qantas needs a mixed bag of tricks with the half and half order of 25 787-8s and 25 787-9 and maybe 10 more 787-10's. This will certainly make Qantas a force in the region. They can start receiving aircraft in five years. They actually need an order placement or they will slide further down the airline final approach slope in its history.

A change is in process for Qantas. Status quo doesn't work at this point. Even though they have the order placement reserved or "the means", and they have the opportunity of Boeing backlog shrinking. They just lack a motive or in this case the courage to join the Big Boys of the airline travel industry at a critical time. Waiting for any tailwind will have competitors landing in the region in numbers before Qantas can recover the market. If Qantas waits out on narrowing the risk and reward band they will become a Pan Am sentiment for National Geographic pictures. Qantas has the aircraft in view and it has the plan in hand, but it lacks the fortitude or a belief in its abilities and contains fears of failure. So will they cautiously consider more 787 without confidence in itself, as the world flies by and swoops in on another final approach, but with a different livery than Qantas?

Boeing Play Book, Turn The Page Please (Completed)

Back in the heady days of the 787 project I dreamed of an airplane built in just one week. That day was July 7, 2007. It was the 787-8 first roll out before adoring plant workers. It reminded me of the movie “Gung Ho”, with Michael Keaton. The last batch of cars were pushed out in order to meet the quota dictated by the Japanese owners, where they found a truly American manufacturing Culture.

Before the 787 on 7/7/07 came "Gung Ho":

Boeing has  turned the page and makes a great airplane: 

The onslaught is about to come not with the 787 but with the 747. It's a last ditch effort jump starting the 747 rebirth. Emirates is in the discussion, albeit by the third party channel, and through the head of the airplane state, and not Clark.  The Boeing bid, if they get one, will have a significant PIP installment. It's a not only engine improvement, but they must find a way towards 500 seats without sacrificing overall performance. The seats must fit the Emirates sensibility factors. If Boeing can improve the 747 by an additional 500 miles, and going up to 500 seat capacity it "may" trip Emirates sensibility of going long with the 747-8i "E" class. Of course "E" for Emirates becomes the prominent motif on the 747-8i tail insignia. Part of the "E" class designations comes the Boeing options with its 747-8i. It would be thrown in a special package with every 747-8i ordered by Emirates. A one for one order bonus. For every 747-8i ordered, Emirates receives a discounted price for one 787-9 or a 787-10 for up to a hundred, plus 100 more options on all three models at the same generous price discounts.

Airbus has dared Boeing to do it, Emirates is listening through the knot hole and scheming its pleasures out. The Airbus dare comes from not reacting to Tim Clark on a A380 NEO request. Tim, who is not for want of patience, exercises his patience, and turns over consultation on the matter with his bosses. Yes, Tim has a Boss. His Boss does not clasp the hand of Corporate America until money is exchanged and talks to its silent third party who can purvey the Boeing deed under certain conditions. Boeing wouldn't be trying unless they could sensibly meet Emirates benchmarks. Emirates would like nothing better than Airbus threatened or a desperate Boeing making a competitive package. Of course the third party is Michael Keaton in this movie "Gung Ho".

What will happened is an unfortunate undetermined condition. Therefore a blogger steps up and makes a ridiculous Walter Mitty presumption on the whole matter. This is for the readers of happy endings. Boeing will NEO ,its NEO 747-8i, on paper. Done! Emirates third party makes a paper "appeal" on a competitive cheaper and faster to fleet status that Airbus can possibly achieve within three model types. The proposal is handed down to Tim Clark with a make-it-so recommendation from his Boss, "but" the make-it-so caveat  has conditions to be met before any order is placed! Boeing must guarantee the following list of concerns... and so forth. Michael Keaton has his work cut out. 

Pondering The 747-8 After Five years Flying.

The 747-8i rushed into the Jumbo Breach in 2010 and sponged away orders from the A-380 in both the freight and passenger categories. It has booked 119 for both types and with  68 of its number in freight and 51 for passengers. Compare that with Airbus A-380 having a five year lead over Boeing going big. They started building in 2005 on the A380 and have booked about 317 of the giants making almost 2/3rds the order book at this time. Boeing has delivered 84 out of 119 ordered or 70%.
Boeing shows about 35 remain on the order book. Below is the link on the brief history of the 747-8 since 2010.

Flashback Friday: 5th Anniversary of First Boeing 747-8 Flight

By Luis Linares  February 13, 2015 AirWays News

Airways News quotes:

"Specifications and Performance

The Boeing 747-8 is the world’s longest commercial airliner, with a length of 250 feet, 2 inches (73.3 m) and a wingspan of 224 feet, 7 inches (68.5 m). The full payload of the -8F is 295,800 pounds (134,000 kg), while the -8I can seat 467 passengers in a three-class layout or 605 in a single class, which no airline has opted for to date.  At their current MTOW of 987,000 pounds (448,000 kg), a -8F can fly 4,390 nautical miles (8,130 km), while the -8I can cover 8,000 nautical miles (14,800 km), both at a cruising speed of Mach 0.855 (570 mph or 917 kmph).  Furthermore, each GEnx-2B67 engine produces 66,500 pounds (296 kiloNewtons) of thrust.

Six months after the EIS of the 747-8F, Boeing reported a 1 percent reduction in fuel burn over the design projection, while delivering a 16 percent lower ton-mile operating cost than the -400F with more range.  The -8I carries 51 more passengers and provides 26% more cargo volume than the -400.  The 747-8 has identical lengths on the cargo and passenger versions, the key difference being the longer upper deck on the latter.  Moreover, Boeing foresees -8I conversion to cargo in the future.  Furthermore, the -8I offers a 30 percent noise reduction, improved fuel efficiency of 16 percent, and 13 percent lower seat-mile, in comparison to the -400.

The 747-8 passenger cabin incorporates interior designs from the 787, such as a more spacious entrance and curved overhead bins.  In addition, it uses windows similar to those of the 777 that are 8 percent larger than those of the -400.  Finally, it incorporates the popular LED mood lighting to improve the passenger experience."

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The future for the 787-8 is now. It has had five years as an Airbus A380 alternative and now Airbus has run this dog as far as it can. Boeing needs to refocus the worth of the 787-8 and no longer shadow the A380. It can haul almost a battalion of military. Three of its type would land the regiment. Six goes the equipment and supplies. All the military needs is an enormous landing strip in place. Not practical until portable landing strip frames are invented for a tarmac. It has to land and  hold a million pounds on a hot day. 

Moving back to the topic of passenger service requires more innovation, capturing the imagination of paying passengers. The A380 has captured the imagination of airlines, but once again that dog doesn't hunt as much as it did back in 2006. The 747-8 must exceed passenger expectation in travel, price and amenities. The travel becomes part of the vacation itself as if in cruise ship fashion. The passenger must associate how nifty the 747-8 has become over anything else the air. Where today, The word "efficiency" translates into small spaces for the passenger.  

The 787-8 must now innovate inside the hull if it is to survive. Using  new concepts unique to the 747-8 configuration. Flying is a social event, it is a private indulgence, and most of all it is a 747 experience all coming from what a 747 has inside. The metrics for the 747-8i has been achieved from engineering and innovative flying upgrades. However, this next round for the 747 is reserved for a proprietary experience for the passenger. Boeing must set the seat count to no more than 450 consenting passengers. In that space is should reek of Boeing innovation exclusive only to the 747-8. This is the only way the 747-8i will survive, as a passenger carrier, using a proprietary suite of excellence. The goal should set the standard, "I want to fly on a 747-8i".

The 777X is being built for a packed house. The 747-8ix should be built for an exclusive house. 

 

Hey Boeing Do A 737-757 or 757-737 (Flash Update)

Update Link- Bolding:

UPDATE 1-Boeing says not studying reviving 757 with new engines

So the single aisle 757 is not on the docket. However a two aisle Goldenliner remains a consideration in the slot of the 757.

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Original Article

Boeing needs to audible the "Gap". It is the Single-Aisle to Double Aisle Gap. They have an off-the-shelve concept in the 737-900 or "the in the bag 757", people mover. It should be called the 737-757 "GL", standing for a bridge going very far. A "Ranger", or something more sophisticated sounding like the "Goldenliner"AKA GL. It will link continental drift with a 5,000 mile range. The gauntlet has been thrown down. with the A321. Boeing could probably wait until Airbus orders are locked-in for the A321, but they won't. Boeing can move rather quickly with a 220 seat twin aisle, borrowing motif from the 787 and the metal from the 737. Maybe stick on the newly engineered carbon plastic wings hanging the latest generation engines, utilizing a cross-over theme from the 777X playbook. Its not a 787 or a 737 but it is the best of Boeing, taking from every invested idea it has made since 2005. It's everything new, since about the time they stopped making the 757.

Note this concept will not be a too lengthy 737-900 or a too stubby 787-800 it will be the Goldilocks of aircraft, that is just right, filling a gap Airbus has gone after. Slightly wider than the 737 and slightly narrower than the 787 where it will do 7 across in style with 2-3-2. with 31 rows or 217 MAX seats. Don't think Boeing has not gone here before, because it has, and it has a carefully measured its idea of how to get there quickly after the Max delivers in all its sizes. The Goldenliner is in the special spot where Boeing has built, tested and pondered ever since retiring production of the 757. Boeing only has so much resources dedicated to new technology and building new designs. Out of the Max,  out of the 777X  and foremost out of the venerable 787 ,comes the Goldenliner. The true gap filler. It will not be a family member for either the 737 or 787 but will sit in its own class leaving the designs of customers to come out and play. Ryan Air will have the 737-200C, along with the other market tampering airline competitors. This airplane has a dedicated niche from shuttle to transcontinental ranges. It will take people on Junkets far enough away without breaking the bank going for it.

The Max is about 118 inches wide (9'8")
The 787-8 is 215 inches wide (17'11")
757 is  139 inches wide or (11'7")
Goldenliner 757X- could be about 179" wide or about (14'.11") (two aisles) or less with one aisle.
Goldenliner 737-757 single aisle  would retain the old 11'7" dimension or 139 inches.

Estimations:
179" across
18" wide seats X  7 each = 126"  and two 26.5" aisles equaling 179"

This of course would require some engineering pencil erasers, as more configuration sketching is needed.

However the 757-737 Goldenliner would fall right between the 787 and 737 and not be too long or too short and its not too narrow, while not going wide. It would be the Goldilocks Goldenliner. Just done right.

The Ethiopian Gamesmanship

Ethiopian Airlines to order 20 wide-body aircrafts

Boeing will sweat this order because its not for the 20 dangling out in front of them but its for the relationship they have cultivated over the years as they have helped Ethiopian build its business with better equipment. Timing is a critical part of the deal. Who can deliver when Ethiopian will need the aircraft. They are looking potentially two suitors, the Boeing 777X and the A350-1000. Both models have not flown as of yet without Ethiopian getting overly excited by its own prospects during the near term. 

However, they have dangled a 20 unit wide body intent out in the air in hopes of snagging a competitive deal from either maker, so they say. One thing Boeing has to do is approach the sales junket to Ethiopian Air with an all out effort. They have the high ground with talking points. But what Ethiopian wants is some Boeing attention in the form of Boeing sugar, because most certainly Airbus is going after this one order as the obvious interloper.

A categorical talking point book from Boeing should grace an Ethiopian Exec coffee table. Including high glossy pictures and Gold leaf trim on the pages. Print at least 100 hundred for the whole board room, family and friends. Next send some Harvard Graduates straight from accounting over to Ethiopian for  helping them remember how the 787 changed the bottom line. All these 787 pilots can fly the 777X in a few days, how convenient. All your 787 mechanics can service the 777X is even more cost effective.

Now Boeing wants to talk about who has the better aircraft under all scenarios for Ethiopian. Rather than talk about the A-350 at all, Boeing should talk about the missing piece Ethiopian has going forward. If they only had a 777X, where will they be in five years from now? Leading the world?

The 787 Effect

Rarely do I repost an airline article verbatim. But this one speaks volumes as illustrating the Boeing Intent for thee 787 and its success. Without further harm, I will repost the article below:

Top Listed Airlines Flying The Boeing 787 Dreamliner

• BY JESSIA YEOMAN
 
• •   FEBRUARY 6, 2015
• • "It won’t be wrong to claim that the Boeing Co(NYSE:BA) 787 Dreamliner, that initiated its first flight in 2011 for ANA,that commercial aviation margins are spreading wider and wider.
    The 787 aircraft is a smaller plane, which can carry enough fuel to fly to larger distances. On the basis of this, many routes have been opened, which were closed for access previously. Around 230 aircrafts have been shipped to 60 customers by Boeing.
    Aircraft 787 has a Goldilocks effect on routes where it has flown due to its just right size. In the past, Boeing 747 and 777,along with the Airbus A340, had been needed to fly longer routes, because of their fuel carrying capacity. The bigger aircrafts could seat more hundreds more passengers than the 787,but lacked sufficient demand to fill them.
    Let’s briefly look at the most innovative 787 routes that could not have been flown without this aircraft’s unique capabilities
    Top first: San Francisco-Chengdu
    The flight that was made by United San Francisco on 9^th June last year was the first ever to fly without any stops before departing from North America to China. It was because of the aircraft’s efficient usage of fuel and was a good start up for various frontiers in air travel. UA operates its 787-7 with 219 seats.
    Top second: London-Austin
    This began with a 5/week flight schedule. The flights that were operated by this airline comprised of approximately 96,973 passengers from March to December. This further encouraged the passenger count in airports for year 2014 rising at 7% with 10.7 million passengers.
    Top third: Shanghai-Boston
    Japan Air Lines, is a very early customer of 787, which launched the Tokyo Narita-Boston services, an approximately 6,719 mile flight.
    Top forth: Stockholm-Oakland
    There was a common belief amongst many that 787 is something of a luxury in being used for longer haul routes just to attract the elite class. But this certainly was not the case with Norwegian Air Shuttle, that packs the 787 with 291 seats/each – 9 seats across in coach and seven across in 32 premium economy seats.
    The airline began to start up its flights from Oakland International Airport to Stockholm in May, 2014 (a distance of 5,354 miles, and to Oslo, a distance of 5,207 miles). Around US$236 was an initial one way cost for both routes. The flights connect two Scandinavian capitals to the Bay Area without any layovers.
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  • The importance of these few statements represent the billions $US spent on the 787 family having this belief, if we build the aircraft targeting the Boeing Bulls Eye "we will be good". It has all new technology that has reams of paper printed out about the advantages of the 787 through the press. This raises a second question. Did Airbus shoot outside the Boeing's Bulls Eye with the A350? The answer will be made known after it flies for four years. If the A350 went too wide or too heavy, it may have missed the researched targets Boeing was aiming for. The handy size the 787 offers is compliance for airline sensibilities, and produces a phenomenal performance. It actually pays for itself in fuel savings in a few years. 
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Boeing Delivers January

Fifty Boeing airplanes found its way to customers in January 2015. The interesting side bar is that it delivered in each of its sibling models from 737 through the 777 with accounts as follows:

Boeing Production,/Delivery for January
737-35
747-1
767-2
777-5
787-7

Total= 50

Airbus made orders in January for five whole airplanes, one more than Boeing during January. However the assembly and delivery department came away with 36 more aircraft short of Boeing numbers by 14 whole airplanes.

Airbus Production/Delivery for January

A320- 3
A330- 5
A380-1

Total=36

+ Let's talk some money. Boeing cashed more checks by beating Airbus by billions.
+ Orders from Airbus takes an early lead in  number and also in potential Accounts Receivable booking 5 A330-200.

Boeing has reduced by one 787, thus erasing its potential Revenue/AR off the books while adding 5 737's, totaling a net number of  4 after the 5 737 are added. It also booked less value than the Airbus' 5 A-330-200's ordered. It is all very  close in the game of  Horseshoes and Grenades for both. It means very little, since January is a regrouping month after 2014. It does show Boeing remains more robust than Airbus when manufacturing airplanes. Boeing is setting a significant tone for the year's production forecasts as Boeing exceeds Airbus easily, with  production numbers during the first 30 days.

Boeing's First Hang-over for 2015 Has Arrived

The Start of each month a chart is made for your own view of Boeing's big picture from 787 production and delivery  pace. Its averaged over 90 days as a moving average. This 90 day per view captures any anomalies of customer readiness or production show stoppers. The average takes this all into account as a moving average and can be wrapped into a quarterly number every 90 days. Its a how did Boeing does for any given point in time at the first of every month, or looking back on a quarter just completed. Here is the 1st of February's moving average numbers including the January production and delivery hang -over.

Goal +/-                          *11/2014    **12/2014         Projecting    January-   (actual) Delta 

Month Deliveries               6            **18              10              7.0                     -11

3 M-M-avg                      9.0          11..67              10             10.33                   -1.33

Production Goal               10              10              10              10                         0

Delivery Trend (+/- )       - 4.           + 8.0                      . 0              +.33      /Target       >                

                                       *PM-Start      **M.A.P.                         PM-End

*Progression Months

**Moving Average Progression

Notes: The drop of a negative, -11,  number over December's production does not affect the 90 day picture for maintaining an average goal of ten a month as it is steadied with a 10.33 average delivered.

However, Boeing needs 23 three more 787's delivered in the next 57 days to meet quarterly expectations of 30 787's delivered by March 31, 2015. Boeing is positioned well enough to complete the goal. It has sufficient 787 ready for customers, testing and preflight status. As follows:

January Delivery                  7

Customer Delivery Pick-up  2

Preflight finish work           15

Production Testing              6

Total primed for 57 days    30

One more note:

Approximately 15 more are on production floors found in both plants. Boeing should migrate at least half those during March into the final preparation stage. Adding a conservative six in number to this status, add it to the above list. As they  should be delivered by March ending, the overall outlook number is for 30 during the quarter. Since these are ballpark numbers. An actual push from the floor will start sooner rather than later, and Boeing will meet the 30 goal for this quarter in progress comfortably.  

The Bridge to The 777X Is on Solid Ground

Jim McNerney is confident about spanning time with the 777-300-ER order book. At least through 2018 and beyond during its transition to the 777X family of aircraft. Why, is a reasonable question anyone who doesn't believe anything coming out of Boeing? Sixty-three 777-300ER were ordered in 2014 because there is no comparable aircraft existing for its range, capacity and passenger comfort. This is a legacy aircraft worthy of another advanced protege. Referred to as the 777X project. It will reach fruition by 2020. Boeing simply needs a 300 unit backlog between now and 2020 for its current model 777-300ER. It now stands at only 237 orders to go since starting the count-down at the beginning of 2014. Watch 2015 and each succeeding year for 777-300ER orders or current customer reorders.

What an Airline would consider is its own transition period to the 777X from the 777-300ER. The classic model (777-300ER) is very efficient and has a proven capability that is unrivaled in today's airspace.

What about the A350-1000? Once built it may be optimistically equal to the older 777-300ER from its brochure pitch. That is what is driving the classic orders today. The A350-1000 has received about half as much ordered in five years than what the 777X received in one year. Once airlines factor in a new 777-300ER, they will see a bridge order from Boeing which will beat a new order from Airbus' largest A350. Boeing intends on about 407 seats on the 777-9X and 350 seats on the 777-8X. It's a Market crusher attacking both the A350 and A380 at the same time. The Boeing Aircraft tool kit will have more sizes in aircraft than Airbus. Each will exceed or meet airline expectation, when they structure its routes and services tuned to market demands. Or it will have the right equipment for piloting in a new or expanding routes with many Boeing airplanes available.

There is only one area Boeing needs to address in the next five years. It is either with the bottom end of the the twin aisle or the top end of the single aisle. The 737 200c is a consideration for trans continental or announcing a roomier twin aisle  787-300 seater for trans-oceanic travel of 5,000 miles. Boeing is already committed with Ryan Air on an order for 737-200C's for about 199 seats, but no more than 199 passengers. Many competitors are looking at its metrics and are waiting to see if Ryan Air clobbers them in Europe with this particular MAX. If they do, many more 737-200C's will follow. Probably in the Indonesia region. Boeing has not yet zeroed in on the low end of the twin aisle 787 until after the 787-10 is in delivery mode. It will be a easier effort to do so after the -10 moves through testing as the -9 had completed its testing with a no mishap in process. A four type 787 is Boeing's ultimate goals for this family of aircraft.

Now for Business meeting quotes from:

Boeing Identifies Order Bridge to 777X

McNerney about the 777 current orders:

“We expect demand for the [current] 777 to remain healthy through the end of this decade,” said McNerney. “With the new airplanes scheduled to entere final assembly in the 2018 time frame, this transition will leverage new manufacturing processes and technologies being proven on the current 777 to optimize the 777X production system.” Boeing’s backlog for the current 777 stands at 217 airplanes, enough to cover more than two years' worth of production. Boeing delivered ninety-nine 777s last year."

“I think it is a sign that the capability is an enduring capability and the competition is…I hate to say it this way, but there is not much competition with capability,” added McNerney. “So we’re in a fortunate position here, and it’s one we’ll shamelessly take advantage of.” 

The company saw further positive developments in the widebody sector with deliveries last year of 114 Dreamliners, setting a new record for any twin-aisle airplane. Company CFO Greg Smith reported that unit costs for the 787-8 dropped by 30 percent over the span of time it took to deliver the last 175 airplanes, and that he expected the program to turn “cash positive” this year, ahead of a production rate increase from 10 airplanes a month to 12 in 2016.

The commentary by McNerney and Smith came as Boeing announced an increase in fourth quarter profits of 23 percent on record deliveries of 195 airplanes, and $12 billion worth of orders driven mainly by strong demand for 737s. Boeing Commercial Airplanes saw a 15-percent increase in revenues to a record $16.8 billion during the period.

The Cheaper Fuel Pyramid Leads To More Boeing 737's

Boeing is putting its best foot forward as Oil per Barrel prices plunge under $50 a barrel, Certain market elements are the free radicals driving more sales. These free radicals will drive the order market rather than impede its growth.  Conventional Wisdom (CW) makes the assumption cheaper oil will collapse order books as Airlines will sit on cheaper ticket prices flying older equipment, because the cheaper oil is a hedge against competition. Is it a fuel price opportunity where weaker airlines will sit on not making further capital investments until they squeeze the life out of its current airframes.

CW then proceeds forward with the Premium Airline Crowd where they are always thinking about sound airline purchases while taking a hold on capital investments, as it will take the "opportunity" binge by swapping out high tickets for lower ticket prices when riding the fuel price dump Bull. These two examples illustrated dynamics of CW marketing on low fuel prices. Its what everybody thinks, until you talk to a Boeing optimist.

Boeing suggest, that a free radical pyramid exist for the opportunist:

Just Order

Opportunity is low fuel prices

Rise in traffic benefits the Revenue stream

Lower Ticket prices from Cheap fuel increases Cash Flow

The purchase window not affected by capitalization during fuel price drops.

A continued growth model takes into account capitalization needs during fuel price drops.

Finally, the goal is stay ahead of the competitors through sustained growth and better equipment.  

The zig-zag of the fuel price chart line will make you crazy over a ten year chart. The airplane growth line is built on regression analysis which is not so Zig-zag, but more of a nice swooping straight line upward. It takes into consideration seasonality influences such as fuel cost. I would be willing to bet the airline cost factor has changed it coefficient a bit downward at the glee of those looking at the upward swing on the revenue line after offering slightly lower ticket prices. Its more than that. A traveler indeed has cost before they attempt a ticket purchase. It takes them half the cost to fill-up their car going to the airport. Tires go cheaper, food is cheaper and so forth. Bottom line, a customer has more spendable cash for a vacation going over seas. Hence, increased airline revenue. It rapidly becomes, "It's the oil economy stupid", for the Boeing speech to its own customers. The Airlines aren't blinking by canceling orders, but are beginning to pour it on the order book as the growth line keeps swooping upward.

The price of oil will go back upwards to $80 a barrel until next year. An Arab Oil Sheik told me so! The airlines won't have lost its place in the production line by staying tight with ordering more airplanes, an airline exec told me so. Economics is simple as long as someone tells you so.