The 69th AGM of IATA just concluded at Cape Town, South Africa, and wide-body aircraft drew a lot of focus in these articles from Bloomberg News and Reuters.
We spoke with John Leahy at the end of the AGM, and though tired and off to sell more airplanes before the Paris Air Show begins June 17, he had some pithy comments about Boeing’s 777X and a strong defense of the A380 sales.
Boeing will have a public briefing of the 777X at the air show, but there have been plenty of leaks before now in which the 777-9X is said to be 20% more fuel efficient than the 777-300ER it’s conceived to replace.
“Be careful with the numbers there,” Leahy said, referring to the 20% figure. “We’re not at all worried about the 777X. They are known for their paper airplanes. No one seems to remember that they already not just marketed but sold 777-200s with folding wings, and of course none was produced. No one seems to remember the ‘game-changing’ Sonic Cruiser, which of course was a joke. No one seems to remember the 747-500, the 747-600 or the 787-3. The Japanese remember the 787-3, which [Boeing] sold with legally binding contracts and just never delivered.
“Yeah, they’re worried about the A350-1000, and they’ve come out with one paper airplane after another and declaring victory, declaring that the world is beating a path to their door. Naw. It’s BS. It’s typical Boeing marketing hype.”
As we remarked to Leahy, “tell us what you really think.”
Leahy repeated previous statements that he could sell a lot more A350-1000s if he had the production slots.
“We could substantially increase sales for the A350-1000 if we could substantially increase production. I need a second line, a dedicated line and we’re debating that internally. We’re doing the business case. I’m confident we can make that decision before the end of the year.”
We asked a leading question about the rate he’d like to see, but Leahy didn’t bite.
“I don’t want to tell Boeing exactly what we are up to.”
We also asked where the additional line would be, if approval is granted: France, Germany or Mobile (AL). “It’s not going to be Mobile,” he said. “Let’s start building CEOs and NEOs there first before we start getting into wide bodies.”
Although there have been a number of stories reporting that Japan Air Lines and All Nippon Airways may buy the A350-1000, breaking Boeing’s decades-long monopoly. It won’t be by Paris, apparently.
“I’d be very surprised, but I can say I’m looking for an improvement in our market share in Japan. We have nowhere to go but up. I would be hopeful we will get a breakthrough in Japan, but I don’t want to predict a timeline,” Leahy said.
A380 sales have been poor, but Leahy is sticking to his prediction of 25 sales this year.
Question: The A380 isn’t selling very well.
Leahy: Excuse me, I haven’t modified my forecast. I said I’ll sell 25 this year, and I’ll sell 25 this year. If this were December, maybe we’d have a discussion. I’ll sell 25 this year.
Q. You fell short last year.
Leahy: “Bad things happen to good people.”
Q. The VLA forecast 1200-1300 since 2000. Sales and delivery rates fell short every year to maintain that pace.
Leahy: “The one thing that doesn’t change is that [everybody] all agree[s] that RPKs double every 15 years. We have to have larger aircraft. Larger aircraft are the only solution [for key airports].”
The Airbus forecasts assumed Boeing would capture a 50% share of the VLA passenger market. In fact, Boeing only has a 10% share. Leahy predicts this split will be maintained.
“We will have 90% market share for VLA. The A380 will do very well and I am confident the book-to-bill will be maintained. No, we’re not going to sell 60-70 aircraft a year. But we will sell 25-35 and we will build 25-35 a year,” he said. “A380 do get high yield passengers.
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