Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Boeing unlikely to meet FAA’s 90-day deadline for new safety program April 18, 2024
- Focus on quality not slowing innovation, says GKN April 18, 2024
- Boeing defends 787, 777 against whistleblower charges April 17, 2024
- Dissecting Boeing CEO’s statement next new airplane will cost $50bn April 15, 2024
- Bjorn’s Corner: New engine development. Part 3. Propulsive efficiency April 12, 2024
ISTAT Europe Conference in Istanbul: Boeing and Airbus slugging it out with some new twists
Airbus and Boeing squared off once again Monday, this time at the ISTAT Europe conference in Istanbul, once again pretty much over the entire product lines.
Boeing’s VP Marketing Randy Tinseth began with two focal points, the 737 with its latest developments and Boeing’s “superior” Twin Aisle line-up. Tinseth claimed Boeing has caught up to the A320neo with the 737 MAX.
After an A320neo head start of a year, Tinseth says Boeing has kept the same sales rate per year for the 737 MAX. The backlog of 737 MAX now stands at 2,300 aircraft and he described why Boeing thinks it is well positioned in this market segment.
Tinseth said the single aisle markets average size lies just below the seating capacity of the 737-800 right now and this center shifts with about 6-7 seats upwards every 10 years. In 10-20 years the center of the market will be slightly above the present 737-800, he said. This means the A320/A320neo and the 737-800/737 MAX 8 represents the heart of the hot-selling single aisle market and at this part of the market Boeing has the most advantageous positioning versus the A320 family, he claims. Tinseth said the 737-800 has a 2.2m/88 in longer cabin which allows for two additional seat rows compared to A320. With trip costs being similar, Tinseth said the per-seat cost is than better for the Boeing alternative.
Tinseth then pointed out that about 30 % of the 737-800 delivered over the last five years were with the max seating capacity, 189 seats. With single aisle demand being around 25.000 aircraft over the next 20 years and 40% of today’s sales being to low cost carriers (LCC), he said the maximum capacity 737 MAX 200 was bound to happen. By adding the emergency door arrangement from the 737-9, Boeing could increase the exit limit capacity of the 737 MAX 8 to 200 passengers. Such a configuration will decrease the per seat cost by 20% compared to today’s 189 seat 737-800 flown by, e.g., Rynair, Tinseth said.
Tinseth then went to the dual aisle range where he pointed out how well Boeing now covers this market. Boeing has competitive aircraft covering from 250 seats to 450 seats with about a 30 seats step between models. He then pointed to Airbus line-up, which he says did not have a modern offering under 270 seats until a late re-birth of “what 2005 was a bad idea, the original A350 and still is a bad idea today. “The A330neo has a fuselage with a cross section that the market rejected, a wing from the 1980s and engines that were optimized for our 787.”
Going upwards from the “bad idea,” (the A330neo now covers Airbus 250-300 seat segment), he pointed out that over the 350 seats of A350-1000 there is a huge gap until the 550 seats A380. In this segment, Boeing has been selling over 1,000 aircraft with the 777-300ER and it has a strong offering going forward with the 777-9X at 400 seats and the 747-8i with 467 seats.
Even though one can take issue with the 467 seats for the 747-8i (real seating is more like 430 seats), his argument has a point: Boeing’s lineup is homogeneous and well spaced whereas Airbus line-up lacks aircraft between 350 and 550 seats. He also said “the market at 550 seat level is a niche and dominated by one customer, Emirates.” .
Leahy launches counter attack
Not surprisingly, Airbus’ John Leahy, chief operating officer-commercial, disagreed.
Leahy quickly replied that the time between Airbus A320neo decision and Boeing’s decision to launch the 737 update (then not yet called the MAX) was more like six months and not a year and that the A320neo backlog was now at 3,200 aircraft and the A320ceo backlog was very strong at 1,500.
Leahy acknowledged that not all of these orders will result in the airline actually being able to take delivery, therefore the the double-booking practice undertaken by Airbus (and by Boeing). Airbus has therefore since 2,000 carefully matched their output to fit with predictable losses in the backlog. As a result, Leahy said Airbus has not been forced to cut production like Boeing has done and Airbus will therefore think more than twice before it increases the single aisle production rate over the already decided 46 per month.
Leahy then announced that weather permitting the A320neo would make first flight 10.30 CET Thursday this week. Going forward, he said that in 2019 the A320neo will get a 2% boost in the engine efficiency for the Pratt & Whitney Geared Turbofan (CFM has not yet confirmed an equal PIP program) which, together with the recently increased seat limit from 180 to 189 seats, will increase the per seat efficiency from 15% to 20% over the A320 of 2010. He then said, “and by the way, those 189 seats are all retro-fittable for the A319 and 320, apart for perhaps a change of an evacuation slide it is just paperwork” “For the 240 seat limit of the A321 we have made hardware changes”.
Leahy then went to the recently introduced A330neo. He said that the A330-800 and A330-900 matched the 787-8 and 787-9 on both fuel and cash operating costs and beats them on direct operating cost by virtue of lower purchase prices, they are therefore indeed a good idea. With 127 aircraft commitments from 7 customers at Farnborough Air show and a further 4 customers that he is expecting to close before end of year, the market agrees he said.
He then turned how to serve the 70 mega-cities of tomorrow. These mega-cities will route 90% of the worlds passenger traffic in 10 years, Airbus believes. With passenger numbers doubling every 15 years, there simply will not be slots for the type of aircraft the market would offer without the A380, Leahy said. These 70 mega cities are premium-heavy and the trend for such routes are to four class twin aisle airliners. When going to four classes, densely packaged aircraft like the 777 and A350 loses more seats than A380. The A350-1000 and 777-300ER lose about 24%-25% and end up around 275 seats, he said. The 777-9X loses 26% and now seats 300 passengers, whereas the A380 only loses 10%, ending up at 506 seats from 558.
“Do you believe we will serve those 70 mega cities with 300 seat aircraft?” Leahy asks. “ No way….”
We later met with Tinseth and Leahy. Tinseth confirmed that Boeing thought most of the 30% of the 737 that go out maxed with 189 seats today will transfer to 737 MAX 200 by 2019 (when the configuration will be available).
We asked Leahy what he thought about Emirates Airlines president Tim Clark’s prognosis that Airbus will reach an A380 re-engine decision within the next six months. “Tim is a very important customer and we always listen very carefully to what he says, I do however think that it will take a little longer.”
By Leeham Co EU
If the A330neo is a 1970s fuselage with a 1980s wing, then what is the B737MAX?
http://aeroturbopower.blogspot.de/2014/09/a330neo-vs-b737max-and-a320neo-first.html
Ah, but it is a 50’s cross section, that makes it all better, as long as the pax are 50’s size.
Boeing is claiming the future. In the next 7 years Airbus will ramp up A350 production, taking over the 300-375 seat segment, while Boeing is selling discounted 777W’s and spending billions on 777X development to hopefully EIS in 2021. The 777X will only fly in Randy graphics this decade, suggesting it’s close.
http://777boeing.com/wp-content/gallery/777x/boeing-777x-night-airport-terminal.jpg
This decade in the heart of the twin aisle segment (350 seats to/from Asia with a lot of cargo) Boeing will have the 787-10 (payload restricted) and dated heavy 777-300ER.
The A350s are much better positioned here, and actually rolling of the assembly line. Into service with AF, BA, LH, KL, SAS, AA, UA, SQ, QR, ET, CX, JAL years before the first 777X rolls off the ine.
The 777-8 spec doesn’t look hot. Maybe the 777X is (too) late and the 787-8 wing is a bit small to fly a 787-10 from hot Asia with 330 passengers and a lot of cargo. It can’t replace the many 777-200ER’s/A343s.
The A330neo has to be discounted to be competitive. It’s on thing to have to discount your old model, that’s on the way out, but to discount your NEW model?
Right, I’ve always wondered why Boeing sold a super duper plane that would be available in no time with features never seen before at discounts never heard before.
To sell faster and more items than the competition.
You are probably aware what frame I am referencing.
Only Airbus will (very probably ) be able to keep their word and invest only a tiny portion of what went into that other cheaply sold frame.
While having on par products you sell more with a price tag below the competition.
Difference between Powell and Tinseth appears to be that Powell appeared to cringe when presenting his PhantasticPowerPoints.
So my strategy is to build aircraft that produce value for the customer? I spend billions to produce a state of the art frame? But then I go back to my tried and true mainstay? Guess when you finally make money on a wide body program you just have to go back to the well again. Why because the money maker has the remains of your entire history laying around. Somehow I bet when you look at the order book you will see I single family for wide bodies. Call them all A300/310/330/340/350 family, and finally profitability. The story the A350 has not sold more is driven by the program bring sold out, well when your boys killed the -800 there’s room now. Oh yeah those 70 EK positions are there too? But no that’s not the Airbus sales objective, it’s selling the A330 at deeper discounts than they hope Boeing will go on that dog 787. Guess Airbus assumes they can and will go lower than Boeing? I remember when Japan came to the Us market and dumped cars into the market. Nissan, Toyota took market share. If Boeing dumps 787s in China to win that 200 order Airbus is counting on, where is the next holy grail for the A300/310/330/340/350 play? A DL order for 50 frames? Puts you at 172, but not the numbers to make JL dance much. Oh wait, go back to EK and offer the A330 and a boat load of A380neos in place of the lost A350? See Boring only has to match price one time before YE and this great story of NEO falls apart. Also better hope that GTF works better on the NEO than it did on that other flight test program. If you think cancellations are bad now, have flight test issues with that program. Hold your cards close before you dance. By the way RR is still working to meet performance goals for 787, so that so called slam dunk is not working yet. These are interesting times and I like to see how these things play out.
Sales numbers will rule the day
l7room,
Re your comment “If Boeing dumps 787s in China to win that 200 order Airbus is counting on, where is the next holy grail for the A300/310/330/340/350 play?”
It currently costs Boeing considerable more to built each 787 than they are selling them for, therefore dumping 200 into China at a giveaway price is going to impact Boeing earnings in a big way (and that assumes they can build them in the required timeframe) – not a practical proposal.
It doesn’t matter that today’s 787’s cost more to build than they were sold for. The cost reduction due to learning just needs to be somewhat predictable, which it is. What matters is whether or not the selling price is sufficiently higher than the average cost to build a 787 (averaged over the number of frames in the accounting block) so that the program breaks even at the end of the accounting block.
“It currently costs Boeing considerable more to built each 787 than they are selling them for, therefore dumping 200 into China at a giveaway price is going to impact Boeing earnings in a big way (and that assumes they can build them in the required timeframe) – not a practical proposal.”
The hidden benefits of programme accounting: You just extend the accounting block and voila Boeing will still be able to appear profitable. Only problem : This is a habit forming drug. Once on it you take it or collapse.
“The hidden benefits of programme accounting: You just extend the accounting block and voila Boeing will still be able to appear profitable. Only problem : This is a habit forming drug. Once on it you take it or collapse.”
Shameless FUD spreading.
Mike Bohnet: –Re your comments regarding 787 programme accounting.
The above comments were made having studied Boeing accounts.
In particular I checked 787’s Unamortised Tooling & Deferred Production Costs and Gross Inventory Balances from Q311 to 2Q14. and the Program Accounting and Unit-Cost Accounting Data from 2011 to 2014 (Q2).
I have checked the quarter by quarter first order differences to see the rate of growth and then attempt to correlate these with deliveries, which I obtain from Wikipedia.
Clearly to make any accurate projections I would need to know what Boeing sells the 787 for and given the discount issue the published list prices on Boeing website provide little guidance.
On thing for sure though as at Q214 the Deferred Production Cost and Gross Inventory of $24.2 and 74.8 billion do in my mind represent abnormally high amounts. To get a handle on what these amounts represent phyically just divide the by the what you believe to be the avergage price you believe Boeing gets for its 787. Just where are they holding all that WIP stock
Way back in 1963 at Douglas Aircraft introduced “managed accounting” to offset the high costs of building the early DC 9s across the entire program. Unfortunately the actual unit costs did not fall as fast as Douglas Aircraft anticipated triggering a crisis.
Boeing has of August 2014 delivered 183 aircraft and is now building them at a rate of ~10 per month – but the costs remain high – this is a serious problem for Boeing.
Given the above I would stand by my comment – “dumping 200 into China at a giveaway price is going to impact Boeing earnings in a big way (and that assumes they can build them in the required timeframe) – not a practical proposal.”
The inventory values were already discussed ~2..3 years ago.
My take away at the time was that Boeing accounted inventory at values that represented the _accumulated cost_ linked to each frame. i.e. the early frames probably had book values in excess of &$3..400m. Come delivery time that contracts to the discounted sales value as reported by Jon Ostrower at the time ( first ~400 frames sold at an average of ?$83m? sans engines.
This background imho is another reason why the terrible teens change hands slowly.
( proper bookkeeping here demands: value of items in stock is manufacturing cost but never more than an achievable sales value. i.e. book losses early, book profits late.)
“Tinseth said the single aisle markets average size lies just below the seating capacity of the 737-800 right now and this center shifts with about 6-7 seats upwards every 10 years.”
My guess is he references the _max_ -800 capacity. i.e. ~185.
But only 30% of Boeing customers actually order that.
This would imho indicate that todays deliveries for Boeing straddle the -800 -900 interval. Looking at delivery numbers the -900 is on the rise but not all that much, -700 are a fifth of -900 deliveries.
Looking to the other side of the pond Airbus A321 deliveries extrapolated for 2014 will rise ~35%. ( A310 are in decline going from 38 to 31 keeping up the trend from previous years.
Isn’t this indication that the trend to larger NB craft is further along, only Boeing doesn’t have the products?
Finally what is sold today is the projected demand in 4..6 years.
Randy: “The A330neo has a fuselage with a cross section that the market rejected, a wing from the 1980s and engines that were optimized for our 787.”
Question for Randy: How is it possible that an aircraft using a fuselage developed during the late 1960s and early 1970s, a wing developed during the late 1980s and early 1990s and engines derived from the Trent 1000-TEN — using technologies developed for the Trent XWB engine — should very easily be able to compete with your fantastically over-budget 788 and 789 aircraft? Furthermore, why can’t your 777-300ER, which is using a fuselage and wing from the 1990s and an engine developed early in the first decade of this century, compete with the A350-1000 without having to be very expensively re-winged? You know, the Airbus guys are only spending a couple of billion on their A330neo, while you have to spend upwards of 5 times as much on the 777X which is using a 20 year newer fuselage. Why can Airbus still use their A333/A343 wing going forward, while you can’t use your existing 777 wing that was developed roughly in the same time period as the A333/A343 wing?
Now, is this because the 777-300ER is “maxed out” at a MTOW of 350 metric tonnes, has a wing with a much less favourable aspect ratio than the Airbus wing, is much heavier than the A350-1000 than what’s the case with the 787 vs. the A330 empty-weight-wise, optimised for long-range operations where excess empty weight is much more deleterious to fuel efficiency than what’s the case on the medium range routes flown by A330s, und so weiter, und so weiter. In short, is the answer really as simple that the basic design of the A330 is just better overral than the basic design of the 777, due to the wing of the latter is close to being outdated for long range flights, while the A330 is holding it’s own vs, the 787 due to the long-lasting design of it’s wing?
777-300ER already is a rather significant change over the initial 777. Really less of a change than from A343 to A346 ?
Wasn’t one reason for the 777F that the pax model does not allow conversion to a freight carrier? ( IMU one would have to swap out the main deck structure.)
The wing on the 777-300ER has the same planform as that of the wing on the 777-300, bar the raked wingtips. The former also has a higher fuel capacity due to extra fuel tanks that are located iin the wing inboard of the engines and between the leading edge of the wing and the front spar. Also, the 77W has a strengthened wing, fuselage and pylons.
Why does Airbus have to sell the A330neo at a discount?
A discount compared to the 787 trying to recoup a 20 Bill investment. Production costs of the oiled mature 330/340 line with paid for development costs makes it profitable at a lower price then the 787. Some customers will prefer the A330 anyway for different reasons.
All customers of Airbus and Boeing, except perhaps billionaires buying custom made luxury jets, receive relatively large discounts on aircraft purchasing. Would that be news to you?
Back in August, Leeham wrote a piece about Boeing discounting practices:
https://leehamnews.com/2014/08/11/odds-and-ends-boeing-discounting-a380-analysis-a320neo-leap/
The Euro/USD exchange rate is going to give Airbus a major advantage in the coming years.
The Euro has been faling steadily and is predicted to reach parity within 3 years according to many analysts.
That gives the Europeans tremendous pricing power!
Rick Shaw
“Why does Airbus have to sell the A330neo at a discount?”
Leeham have previously covered the extensive use of discounts by both Boeing and Airbus to sell ‘all’ their products 737, 787, 777, 747, A320 , A330, A350 etc.
Discounting sells aircaft – especially to LCCs (Ryan 737 etc).
Since three quarters of the B787/A330neo’s fuel consumption improvement is attributable to better engines and the A330 airframe/wing was so good and now that Airbus (unlike Boeing) has fully amortised the development and tooling costs it finds itself able to deliver a competitive jet so 25% cheaper than the 787.
The business case its a real no brainer.
If successful and Airbus may well drive down the B787 sell price to a point where Boeing is force to take a future hit regarding the 787′ mounting project accounting cost.
“Tinseth said the 737-800 has a 2.2m/88 in longer cabin which allows for two additional seat rows compared to A320. With trip costs being similar, Tinseth said the per-seat cost is than better for the Boeing alternative.”
Randy’s capacity point and demand for it is valid IMO. However on trip costs, the NEO will have better engines lowering those. Even if the CFM Leap does extremely well, the NEO will have the better BPR version of it. And the PW GTF as even more promising alternative.
The A321 is taking over transcon, Intra Asia and big city pairs in Europe. Sales passed 2000 and will be at 3000 soon. Without competition; another Boeing “757 replacement” initiative is around the corner.
http://www.jaunted.com/files/6193/1AAA321main_23.jpg
You have called for a longer A320, yourself recently. So I guess that 2.2m longer cabin on the 738 was a good idea.
Leap-1 is still a conventional design using new materials
http://www.flightglobal.com/news/articles/analysis-genx-misses-fuel-burn-spec-on-787-but-on-upgrade-403937/
Looks to me like the writing is on the wall for this concept already. Leeham? have already published comments by operators that 737 (800?) NG is 2% better than A320 CEO, both airframers have increased seating by the same 5%, wing tip devices added to the 320 probably closed that delta and if GTF is already 3% ahead of Leap the only advantage of a Leap 320/Max is financing. Now far can that go if Leap slips behind spec.? Time is slipping away and GE must be finding improvements harder and harder to find by now.
I guess there might be serious ramifications for 777-X and 787 if GE can’t get these new engines on spec.
EK cancels its large A350 order, because the specs changed since 2007 and Leahy didn’t consult EK, or just didn’t bent.
Airbus is very dissapointed, its probably their biggest order ever cancelled. They tell EK so and ensure EK they stay onboard for A380s.
EK orders 777Xs, for delivery after 2020. An implication is EK can take 777W’s for the next 7 years waiting for the 777X, or the payload -range restricted 787-10s, while competitors greedy opt for their early A350-1000 slots.
Clark: “Oops, wait a minute here, lets talk”. Leahy tells him he’s happy to discuss all kinds of opportunities, but that he’s very busy now, so maybe next month?
http://www.flightglobal.com/news/articles/routes-emirates-to-re-evaluate-a350-alongside-787-next-404005/
Ummm no. I don’t think that’s the way the conversation went. I think Tim Clark is the one in the driver’s seat and John Leahy is the one going “Oops.”
Last June:
“Airbus’s chief operating officer for customers John Leahy says the Emirates move will not have a lasting financial impact, and that enquiries have already been taken from potential customers about the A350 slots left open by the Emirates change.”
http://www.flightglobal.com/news/articles/analysis-why-xwb-isnt-extra-enough-for-emirates-400290/
The A350 seems to become an excellent aircraft. The major airlines voted with their wallets & Emirates slots will be easily assigned. The question is if EK Clark perfectly OK taking 777W for the next 7 years while his direct competitors take the -1000s.
Its seems after their bold move on the A350s/777Xs they looked at deliveries/ ambitions this decade and questioned if they had followed the smartest possible strategy here..
But I think they aren’t in any hurry to get back on the A350-1000 train, as they also see there aren’t a lot of airlines exactly clamoring to buy the aircraft either, as they probably looked at the number of sales over the last 8 years and saw that there isn’t a lot of movement, (compared to the 777X sales over the last year) and feel that they can take a wait-and-see to see if it shapes up to what Airbus is advertising. If Emirates were so concerned that they were “losing out” on the A350-1000, how come the 787-10 has entered their sight picture?
I believe that Emirates feels they have Airbus by the ball-bearing on the A350 purchase and can afford to wait.
Pingback: Odds and Ends: wrap-up from ISTAT Europe Conference; Airbus Group joins Aerion to create biz-jet. | Leeham News and Comment
Talk is cheap. How many airplanes do you sell and more importanatly , deliver?
If the A330NEO is so bad it will flop.
I don’t think it will flop, not sure it will sell more than 250 either, but I am not going to dis it either, in its range slot, it is as competative as the 787-10 is in its segment.
So, quit talking and deliver product.
” So, quit talking and deliver product.”
That’s the 777X biggest issue. 2020 is 2020 earliest.
The A-350-1000 still has fewer than 200 orders. A further stretch to grow that tiny niche of customers seems implausible. The reason for the EK cancellation after all was that it is already not terribly common engine wise etc. with the 900. A new wing new engine -1100 would be laughed at by most customers.
The initial -1000 exchanged a bit efficiency for an increase in capability to the current iteration.
One could interprete this as Airbus having been goaded into giviing the -1000 more capability too early.
Originally I expected the -1000 to grow into the 777-300ER slot via the continuous improvement process we saw on the A330.
You can efficiently grow into longer ranges via engine improvements in contrast to a longer ranged ( intrisically heavier ) craft that will grow into ranges without demand.
EK cancellation is partly because it is not an 1100, EK wanted an as big as they could get A350 with lower thrust engines, because of space constrictions and a need to cover their shorter routes with something cheaper to fly than a 777 anything. It wouldn’t surprise me if they launched the 1100, if Airbus will do it for them without making it “too much aircraft”. They can’t avoid supporting the 777-X because Boeing is the only one who is likely to give them a 77L replacement, which they need.
There are lots comments about airbus’ gap in the 370 to 550 seat segment.How come nobody is bothered about boeing’s lack of a versitile aircraft in the 280 to 407 segment?…787-10 lacks range 777-8 has too much of it (adding to seat mile cost)..airbus has a330-900neo a350-900 a350-1000
second and third place bracket the first place 😉
There has been an effort to downplay the A350-1000 for years on various media.
Let’s take a look the largests 777 operators of the last 20 years; EK, BA, UA, AA, SQ, JAL, AF, CX, Qatar. It should sink in by now those carriers will take A350s, A350-1000s in good numers replacing 777s.
How many of the A350-900s ordered will become -1000s? We do not know yet. Look at the 787, 777, A330, 737, A320 to see how many get upgraded to longer verisons over the years.
EK will compare the 787-9 to the A350-900 and A350-1000 to the 787-10. You don’t need to be a specialist / fly first to see those are very different aircraft.
http://1.bp.blogspot.com/-2W5KeaVeXOE/UdsPKOXfEYI/AAAAAAAAF0w/XkE_hxoWyRw/s1600/image.jpg
Another question could be, does EK find payload (cargo) range important? Well, do some research..
EK realizes (late) that their position ordering A350s is not the same position as they have ordering A380s or 777xs.
E.g. BA, AF, LH, SQ, MH and e.g. Turkish can quickly pick up additional early EK A350 slots to bypass Dubai. http://www.ausbt.com.au/virgin-australia-mulls-bulk-order-for-airbus-a350-boeing-787
EK themselves get less popular 777Ws in the 2015-2021 period waiting for their 777Xs. Maybe cancelling the A350 was a real smart move. Maybe not. Anyway they are ” re-evaluating”.. Leahy probably gave them a ” no later then..” advise.
http://www.aspireaviation.com/wp-content/uploads/2013/12/Screen-Shot-2013-12-31-at-15.08.43.png
What about separation in capacity from the 777, how about a few hundred 787-9 or A330-900neo?
Hey smart guy, EK has 0 orders for anything dealing with A350. Also, pleasure us by saying the name of the customers who took up EK’S A351’s? Nobody. 77W’s less popular? They’ve sold better this year than the A351. Lol come on. Your graphics say nothing because the 777x is still selling despite the doom and gloom you’re spreading. Good luck thinking EK is gonna order the same frames they cancelled. EK is too smart for that AND the head of EK is already on record saying they prefer the 787-10 over anything comparable.
Face the music. The orders placed for the A351 are mostly done. You’ll see orders trickle in but no flood of orders.
77W’s less popular? They’ve sold better this year than the A351.
May I direct your attention to a previous post on this site:
https://leehamnews.com/2014/08/11/odds-and-ends-boeing-discounting-a380-analysis-a320neo-leap/
(begin cite)
The list prices for the 777 are $269.5m for the -200ER, $305m for the -200LR, $330m for the -300ER and $309.7m for the -200LRF. The -8X comes in at $360.5m and the -9X at $388.7m.
The 787-8 lists for $218.3m, the -9 for $257.1m and the -10 for $297.5m.
We are hearing, however, of special cases in which the 787-9 runs for $135m or significantly less and the 787-8 for as low as $115m. We also hear of the 777-300ER being offered for as little as $128m in special circumstances. The calculated discounts UBS mentions for 737 fall within the pricing range that we hear in the market. Strauss writes that some discounts to list reached 65%, also within the range of what we have heard. (end cite)
IMU major 777 rebates started when the A350-1000 was delayed by two years.
Otherwise nobody would have stuffed that gap so fast with a competitors product.
Keesje wrote: “There has been an effort to downplay the A350-1000 for years on various media.”
Ummm…what? Please don’t cite some blog. I don’t seem to recall an “effort” to do that any more than efforts to downplay any aircraft, from the 787, 777, A350, or A380. Can you provide a source for that claim?
Neutron73, everywhere in the media people are reproducing A350-1000 apples to oranges figures with the 777x, saying it should be stretched, doesn’t sell, lacks range, will be absolete etc.
http://www.bizjournals.com/seattle/news/2013/10/29/airbus-considers-larger-a350-variant.html?page=all
http://blog.seattlepi.com/aerospace/2011/10/04/boeing-777-heads-toward-record-year-on-airbus-doubts/#1232101=0
http://aviationweek.com/awin/airbus-a350-1000-delay-looms-key-customers-want-more-thrust
http://www.businessweek.com/news/2012-05-29/airbus-blinking-first-with-a350-helps-boeing-plot-777-successor
http://www.strategicaeroresearch.com/2014/06/13/777x-decimates-a350-1000/
Its so widespread we get used to it.
Btw A32-0 NEO first flight12:00 est, in 1.5 hour. http://www.airbus.com/live/
I have to respectfully disagree with the doom and gloom part. I think most saw the slow sales of the A350-1000 and subsequent redesign and delay as some evidence that Airbus may have miscalculated. I think the general talk was that they gamed their design as usurping the 77W (and you had Leahy going to say as much as, “once the A351 is flying, it will make the 300ER obsolete) and Boeing basically moved the goalposts by going 777X, and Airbus must respond. I don’t necessarily think they have to answer the 777X.
I think the doom and gloom talk was going all around to every jet. Plenty of “787 will fail”, or “A350 is a bandaid” blah blah blah.
Who’s going to be in a hurry to re-sell EKs slots when they don’t open until 2019 anyway? Airbus will be pushing up their margin for all its worth, don’t expect announcements soon.
Why is Mr Tinseth still mentioning the B747-8I when the entire world knows that this aircraft is dead?
Unfortunate fate of the late 4-holers, like it very much, as it has a rather attractive appearance just like the A340-600 had.
The question on an a350-1100 is if there is a market for a very large regional twin. It would be a niche product, akin to the 777-8X. At some point A will have to choose between the A330NEO replacement and a new twin over the A350; the decision being timed so as not to preclude the NSA counter to Boeing’s new product offering toward 2025. It’s 10 years off now but remember how long the development cycles were for the 787/A350.
The 777-X economics are based on 10-abreast and the promise to widen the fuselage inside by several inches. The -1100 could be ready around 2020 with an Rolls-Royce Advanced engine. The -1100 may lack some range but will beat any 777 on economics even a 11-abreast seating on 777-XI. The A350-1100 is “just” a stretch while the 777-X will be another 747-8i.
I wouldn’t call 7000NM/ 14 hours ” regional”
“At some point A will have to choose between the A330NEO replacement and a new twin over the A350”
I think Airbus will first sell another 2000 and start thinking then.
How long will it take to sell 2000 -900’s and another 200 -1000’s? Still sticking by that estimate that 40% of the A350’s that exit FAL will be -1000’s, Keesje?
Airbus sold 2500 A330/340/350 during the last 20 years. Of the A350 probably half will be -1000s, like the A333 and 777W. A large part of the A350-900 orders will be converted to -1000s.