Boeing lands a big one?
There are several reports out now that Emirates Airlines is going to announce an order for 30 Boeing 777 aircraft at this year’s Farnborough International Airshow in the United Kingdom this week. I’m sure that this will further strike fear in the hearts of airline executives and I’ll repeat THIS response. Just because they order it doesn’t mean they’ll know what to do with it when the time comes.
Another interesting piece of news is that Air France has invited Airbus and Boeing to respond with a proposal for supplying as many as 100 widebody aircraft over the next decade. The assumption is a mix of both the Airbus A350 and Boeing 787. I suspect conventional wisdom will give Airbus the upper hand (we are talking about Air France based in France where Airbus aircraft like the A350 will be made and where the French insist on buying local) but I like Boeing chances for this. Boeing could win this order by offering a mix of 787 and 777 aircraft with GE engines. Air France already has a large fleet of 777 aircraft, experience with the GE engines and may well be attracted by the expected quick and relatively cheap transition for pilots to move between the two aircraft.
Steven Udvar Hazy has his new company, Air Lease Company, and reportedly will be at Farnborough on the hunt for building his new portfolio of lease aircraft. While money is starting to flow back into the lease business, I do wonder if the game hasn’t changed since the early 2000’s. Airlines have seen the benefits of owning their aircraft because in bad times, they can leverage those aircraft for more operating capital in those bad times. In addition, I don’t think Airbus and Boeing are in the mood to offer huge discounts to the lessors anymore. If Michael O’Leary of Ryanair can’t get a deal for 200+ aircraft, why should we think lessors will?
Randy Tinseth, VP of Marketing for Boeing, will be releasing Boeing’s most recent current market outlook at Farnborough and it’s quite a positive one. Boeing sees a need for 30,900 new aircraft between now and 2029 of which they expect 21,000 to be single aisle airliners. They’re forecast is based on a growth rate of 5+% per year in the airline industry and that’s based growth rates since 1978 deregulation in the US (which have averaged 5% per year.)
What’s interesting to me is that they see the regional jet share of that outlook as being significantly less than in the past. I think that depends on what you call a regional jet. If you’re speaking of 50 or less seats, I agree. If we’re talking about 75 to 110 seats, I’m not sure I do agree. Indeed, I think that the 90 to 130 seat market is going to be very hot and I think that Boeing and Airbus ceding that market is a mistake. Even car manufacturers have discovered that it’s wise to cultivate customers at the entry level as opposed to waiting 20 years for them to be able to afford your product.
Finally, I understand that Boeing’s 787, ZA003, has landed in the UK and that marks its first appearance in Europe. FleetBuzzEditorial.Com got some photos of the 787 landing at Farnborough which can be seen HERE. I still really dislike the demo interior they’ve installed in that aircraft.
Interesting thoughts, especially on the single aisle market. My interest primarily lies in fleets and the aircraft themselves, but I really enjoy your blog. It’s pretty much all I read about the business, and both informative and digestible.
Any opinions on the United incident the other day, or the fact that they’ve had a few lately?
I’ve been a real hater towards United over the past 2 years but they’ve earned some respect from me lately. They’re earning a decent profit (although in the “shortcut” manner that I’m less fond of) and operationally, they’re more on top of their game than some others. I give John Tague credit for that and that’s a shame since he’s not given much of profile in the merger so far.
As far as the incidents . . . well, they mostly strike me as poor luck. At least those on the mainliners. Their contractors for regional jet flying could sharpen up a tad. They don’t strike me as dangerous (yet) but it is starting to come off as sloppy ops.
But taken as a whole, United has come back from atrocious service and I’ve got to give them credit for fighting back.