More 787 cancellations likely: Boeing, UBS

Boeing sees more 787 cancellations following the one by China Eastern Airlines for 24 aircraft, according to this news article.

In light of the CEA cancellation due to delays, UBS aerospace analyst David Stauss re-issued his May report in which his team concludes 46 787 customers net over-ordered 500 aircraft of all wide-body types and predicted then that more 787s would be canceled than was true at the time.

UBS concluded that 80% of the 787 backlog was ordered for growth and the remainder for replacement.

UBS didn’t specify what wide-body were over-ordered or would be canceled. Cancellations could come from the 787, Airbus A330, Airbus A350 or the Boeing 777 and the Very Large Aircraft from both OEMs.

But UBS’ point is that in its view, more 787 orders are at risk.

63 Comments on “More 787 cancellations likely: Boeing, UBS

  1. It looks like China Eastern is moving away from long haul flights. It struggles to compete with Air China and well established international airlines. Hence the order for 737s and A330s (presumably the -300 variant). I imagine they will be interested in the 787-10 when it comes out.

  2. Most airlines are probably withholding their decisions until the 787 has accumulated a sufficient number of hours of commercial service to determine the reliability and the actual performance of the aircraft.

    With more airline operational data the customers will be in a better position to make a decision to either cancel the orders or wait patiently for deliveries.

    Therefore I don’t expect a large number of cancellations at this time or in the near future. Only much later on, after several operators will have put the aircraft in service, will we know how good the 787 really is.

  3. This could be a mixed blessing for Boeing (and Airbus when the A-350 cancelations begin). It frees up more delivery slots earlier, and many of the canceled orders for the B-787 might go to other Boeing aircraft, like China Eastern did. When those new orders eventually come in, Boeing can settle on a more reasonable price for the B-787. The B-787 still going to be a game changer and replacement for the B-763/4, A-306, A-332/3, and B-77A, before the A-350 begins arriving in numbers.

    The strange thing about China Eastern was they did not order the A-32X-CLASSIC, A-32X-NEO, or B-737MAX. They ordered the B-737NG.

    Other airlines may do something similar, cancel some B-787s, B-747-8s, A350s, and A-380s as they begin projecting their balance sheets out to years from now.

    • They might need the planes before 2017. And I guess Boeing would not have been able to give them a good price on any A320 variant.

    • Please tell me KC-135-Top-Boom who has canceled A350XWB orders and who will do so?

      • A350xwb is abou 2, 2.5 years behind the 787… give it time, they’ll get to lose customers just like everyone does.

      • Mark :Please tell me KC-135-Top-Boom who has canceled A350XWB orders and who will do so?

        http://www.thaitravelnews.net/airlines/bangkok-airways-cancels-airbus-a350-order/

        I am sure others will follow. There is no way that there won’t be cancellations out of an order book which is close to 600 units. To an extent it’s just part of doing business (in this case a change of strategy, and a full refund), and nothing to get excited about. The problem for the 787 is that customers cancel and take competitor planes. That’s nice in the short term (frees up slots, may improve cash flow), but in the long term what would have been a 787 customer is now an A330 customer, and even if you can switch them back, that won’t be for 10 years at least. So you’ve just lost a client to your competitor.

  4. The thing is 15 of the 787’s cancelled by China Eastern were intended for China Eastern. They have ordered 15 A330’s instead. China Eastern obviously still needs 15 widebody aircraft they just didn’t want to wait for the 787. Terrible news for Boeing, great news for Airbus!

      • Mark :Please tell me KC-135-Top-Boom who has canceled A350XWB orders and who will do so?

        Falcon :

        Check with Airbus, there has been about 16 A-350s already this year. QR is threatening to cancel their A-350-1000 order.

        KC135TopBoom :The strange thing about China Eastern was they did not order the A-32X-CLASSIC, A-32X-NEO, or B-737MAX. They ordered the B-737NG.

        Why is that so strange? They have plenty of 737NG already and I bet Boeing was motivated to change the order instead of a complete cancellation.

        The have more A-32Xs in their fleet than B-737s.

        Mark :Please tell me KC-135-Top-Boom who has canceled A350XWB orders and who will do so?

        3 years from now Boeing won’t be making 10 B-787s per month?
        a380, how would you know that. BTW, Airbus is producing only about 2 A-380s per month, more than 5 years into production, and their delays on some slots is still measured in years

      • KC, you point about the A380 could be seen as supporting the statement that Boeing is not likely to be pumping out 10 per 4 weeks. It seems OEM’s are publishing optimistic projections about those numbers.
        Many (good?) reasons for them to do so – cheaper capital with a larger promised return and such… you definitely don’t want to under-estimate your income.
        So, what are your reasons for thinking Boeing will (finally) deliver on any promise they made regarding to the 787?

    • good point – is Boeing letting these customers go, reducing their promised penalty payments or some such, to deliberately free up slots for new orders?
      could make good commercial sense if the initial price they sold the 787 for is to be believed.

      Give China Eastern a million extra discount on 737’s so they can sell the 787 slots at almost twice the price…

  5. I had been afraid of this development ever since the 787 delivery delays started
    AND since the A350 program was announced!

    Let’s hope for Boeing that any additional cancellations can be held to a minimum,
    but I am afraid that the number of cancellations could be significant, because of
    1) the delivery delays for each airline is only now being defined, 2) the uncertain
    economic conditions worldwide AND 3) the availability of the superior A350s at
    about the same time of the revised 787 deliveries!

    • 0) An overweight and underperforming product that
      hemorrhages its advertised business model.

      A350 XWB really isn’t a 1:1 replacement for the Dreamliner.
      The cancellations imho indicate to some part that $76m is still too
      pricy for the 787-8 .

  6. China Eastern signalled this a year ago.

    http://atwonline.com/aircraft-engines-components/news/china-eastern-considers-canceling-15-787s-1129

    The order is to political to cancel (trade deficit). So China Eastern compensates with 737s.

    http://www.reuters.com/article/2011/01/19/us-usa-china-deals-agreement-idUSTRE70I40C20110119

    Operationally they replace them with A330s. Those have become better over the years contrary to the Dreamliners. Eastern daughter Shanghai Airlines mentioned it earlier this year. 787s ‘don’t fully meet the quality that Boeing touted earlier.’

    http://www.chinaeconomicreview.com/en/node/50573

  7. Customers cancels order and buys a rivals aircraft. This is, apparently, all good for Boeing.

    Strange world.

  8. Over the last couple of days I’ve read from United/Continental and LOT that their orders have been delayed yet again. I’ve also read that Air New Zealand is fully expecting a delay in their orders. My question is what the h*ll is going on with Boeing??? My conclusion is that it’s high time some major stockholders apply pressure to the board to clean house at the top level. It’s too late for redemption for those at that level as they’ve screwed the pooch every possible way. Boeing needs to fire the current leadership and replace it with those who can make a truce with labor so that it can accelerate pushing out airplanes! They needs to come up with a plan to accelerate the rework of the early build models that are sitting idle around Paine field and then they need to ramp up production across the board to fill customer orders. Boeing is responsible for a huge part of the United States foreign trade and it needs to get it’s act together.

  9. Rudy Hillinga :
    Let’s hope for Boeing that any additional cancellations can be held to a minimum,
    but I am afraid that the number of cancellations could be significant, because of
    1) the delivery delays for each airline is only now being defined.

    Rudy, in line with what you say above, LOT Polish Airlines announced today that it was expecting another delivery delay of its first 787 in addition to the existing delays that have accumulated since they placed their initial order and which total five years already. And that’s just one example.

    For those interested in this particular news, here is the related link:

    http://atwonline.com/aircraft-engines-components/news/lot-expects-another-787-delay-now-five-years-behind-schedule-1018

  10. KC135TopBoom :
    The strange thing about China Eastern was they did not order the A-32X-CLASSIC, A-32X-NEO, or B-737MAX. They ordered the B-737NG.

    Why is that so strange? They have plenty of 737NG already and I bet Boeing was motivated to change the order instead of a complete cancellation.

  11. Mark :Please tell me KC-135-Top-Boom who has canceled A350XWB orders and who will do so?

    3 years from now Boeing won’t be making 10 B-787s per month?
    a380, how would you know that. BTW, Airbus is producing only about 2 A-380s per month, more than 5 years into production, and their delays on some slots is still measured in years

    Not sure what happen there. That first sentince should read;

    a380, how would you know that 3 years from now Boeing won’t be making 10 B-787s per month.

  12. NYC Dude :
    They needs to come up with a plan to accelerate the rework of the early build models that are sitting idle around Paine field and then they need to ramp up production across the board to fill customer orders.

    NYC, I am confident that they have a good plan to accelerate the rework and ramp up production. I am sure they have figured out by now the seriousness of the situation they find themselves in and what needs to be done to extricate themselves from that mess.

    The plan that went wrong, terribly wrong I should say, is the initial manufacturing plan. What they are going through today is the consequence of decisions that were taken more than a decade ago! They were oblivious at the time to the warning signs that were flashing all around them. They did not plan thoroughly because they failed to properly evaluate the consequences of the decisions they have taken for reinventing the way they built aircraft.

    Even if today they came up with the best possible plan, there is no way they can repair the damage that was done in a timely manner that would be acceptable to anyone, no matter how patient they were. It’s physically and humanly impossible.

    • “They did not plan thoroughly because they failed to properly evaluate the consequences of the decisions they have taken for reinventing the way they built aircraft.”

      “Invention” ? Note my Cargo Cult commentary elsewhere 😉

      “Plans”
      What is the cost floor Boeing can reach with improving ( or massively changing ) on the process. Most Boeing plans have in recent time fallen flat on their face.

      I still don’t get how customers dumping a product though their price is/was astonishingly
      low should improve sales at much higher prices and thus be a boon to the producer.

      Never buy a Mk1, there is a very good chance that new orders will be for the -9 only.

  13. This could be one of those good news/bad news situations. If Boeing really was selling their first x hundred aircraft for peanuts, then maybe they won’t have such a big loss on some of these cancellations. The problem, as usual, is what is going on behind the scenes. Who paid how much for what?

    The bad news is that some of Boeing’s customers seem to have lost faith in their supplier.

  14. Uwe :My guess is Andreas meant it exactly the way he wrote it

    Your guess is right. 😉

    To clarify, KCTop wrote that it’s great they didn’t order the A320. My point is that they would not have been given as good a deal on the A320 as they almost certainly got on the 737, since they did not have a large, delayed, eligible for compensation order with Airbus. They could have applied the leverage to another Boeing WB product, but there presumably isn’t one of interest. 777-300ER/748 too big, 767 too old, 772 not economically attractive anymore. The A330 on the other hand is a fine plane in the size category. So the 737 was the only alternative left open to them, other than asking for their cash back, and so they went for that. That’s nice for Boeing, but hardly an endorsement of the 737 as a product. It’s rather a sad comment on Boeing’s current product line-up, which has a massive hole in the middle (in reality, not in the catalogue), due to the failure to get the 787 out on time. IOW, if you want a capable, modern, mid-size WB plane for delivery in the 2013 – 2016 time frame, you have precisely one option at present. It’s built in Tooloose.

    I hope that clarifies the matter?

    • I understand your reasoning very well because that’s exactly the way I viewed this transaction from the beginning.

      Still, for your initial sentence to make sense, I think it should read “And I guess Airbus would not have been able to give them a good price on any A320 variant.” Or, if you had the 737MAX in mind, “And I guess Boeing would not have been able to give them a good price on any 737 variant.”

      You must have had “Airbus” in mind, but you wrote “Boeing”.

  15. I still wonder if Airbus has a A330 re-engine plan under the table.

    The A330 backlog keeps growing

    Also Airbus is lately helping airlines convert from the (delayed A350-800) to the -900 and the cargo version(s) probably have a long future..

    Add some black and Li Aluminun and other quick wins and have a low risk high value gap filler.

    • I don’t see why re-engining would make sense? The A330 is a cash-cow at the moment. I wouldn’t go anywhere near it, and rather keep producing them at a good rate.

      • A 1-2 Billion upgrade would have ROi in no time. It would fill the gap under the A350-900 / 787-9. 250 Seat medium- long haul, cargo, tankers.

        Boeing had this cash cow strategy with the 767, 777-200/ER/LR and 747-400. It resultated in market absence / low rate production periods of 10, 5(?) and 8 years.

        On the 737 they also planned a cash cow strategy with the 737NG. A backlog of 2200, “7% cash operating cost advantage” additional orders tfrom loyal customers, to sing it out until 2018. The airlines corrected them months ago.

  16. KC135TopBoom 3 years from now Boeing won’t be making 10 B-787s per month?a380, how would you know that. BTW, Airbus is producing only about 2 A-380s per month, more than 5 years into production, and their delays on some slots is still measured in years

    Not sure what the A380 problems have to do with this? In any case, Boeing says that by end-2013 they’ll produce 10 a month. Analysts say they won’t.

    http://www.aspireaviation.com/2011/10/03/challenges-remain-as-boeing-787-becomes-reality/
    This far, the score is Analysts 98, Boeing 0 on prediction accuracy. I guess we’ll find out. Boeing won’t announce a failure to achieve the rate rise until 1 Jan 2014 in any case, should they fail.

  17. So far, Boeing have given no explanation for the new and very substantial delays in delivery of 787s to United, LOT, and Air NewZ, except for vague reference to “production” delay. See the Flightblogger entry. And what good would any explanation from B be? In the last year or so I have allowed myself to hope that under Albaugh B had at least started telling the truth about the 787 program; that the lying and dissembling that had infected the program from Mike Bear to Scott Carson had ended. Now we know that is not true. How can these “production” delays be reconciled with B’s recent claims that their supply/production system is under control and functioning well so that the much bally-hooed production rate increases to 2.5 to 3.5 to 10 and finally to 17 787s/mo are attainable? Obviously they cannot be. Which I think brings into clear focus that B will not be able to deliver on its huge back log in any way that is predictable now. This why the cancellations are coming in and by B’s own admission will grow. These planes are likely to be late, late, late, and late again, and B will be paying, paying, paying.

    The time has come I think for all of us who care about the aero space industry in general and B in particular to admit into our consciousness that the 787 program is a scourge that will drain B for years to come because it’s production system is irreperable, and may well collapse because B will never be able deliver its backlog in any remotely reasonable time (ie before the planes they were to replace have finally come to the end of their lives). If it is not one thing, it will always be another, like a Ground Hog Day bad dream repeating and repeating itself without end.

    Scott, I think you journalists now have an urgent professional obligation to finally, once and for all, flush out B’s lying culture, and expose it and the 787 program for what it really is, whatever that may be.

    • There is an increasing number of people who are reaching the same conclusions as you Christopher. And as you make clear in your post, many of these people are the airline managers who have purchased the Dreamliner, which has become as you put it “like a Ground Hog Day bad dream repeating and repeating itself without end”.

      As to your comment about journalist obligations, I think Dominic Gates from The Seattle Times has tried to do just as you prescribe. But unfortunately many Boeing fanatics have ridiculed him. Boeing’s heritage and legacy have so far sheltered that great company from the more critical viewpoints it now deserves and which are long overdue.

  18. I hate to say this but the A350 could be the 787’s A330, if you know what I mean. The BusBoys are moving forward with the first article and so far it looks very good. Time will tell as always.

  19. keesje :A 1-2 Billion upgrade would have ROi in no time. It would fill the gap under the A350-900 / 787-9. 250 Seat medium- long haul, cargo, tankers.
    Boeing had this cash cow strategy with the 767, 777-200/ER/LR and 747-400. It resultated in market absence / low rate production periods of 10, 5(?) and 8 years.
    On the 737 they also planned a cash cow strategy with the 737NG. A backlog of 2200, “7% cash operating cost advantage” additional orders tfrom loyal customers, to sing it out until 2018. The airlines corrected them months ago.

    I don’t see those as comparable. Airbus is producing the A350, and expects that to take over. That’s quite different from the Boeing approach.

    As for ROI – with constrained resources, it may not be the best choice amongst a number of ROI-positive alternatives.

  20. The have more A-32Xs in their fleet than B-737s.

    But some 50 x 737NG is sizable. As are incentives to change the order instead of outright cancellation.

    I don’t find the 737NG order strange. I would have found cancelling orders with Boeing and placing all new orders with Airbus surprising.

  21. Orders like this for the A330 just make it more hilarious when you read comments on what the 787 would do from about 5 years ago. Boeing will surely still get there, just not at the amazing, savior of the aviation world speeds some people thought. Hindsight.

  22. keesje :
    Boeing had this cash cow strategy with the 767, 777-200/ER/LR and 747-400. It resultated in market absence / low rate production periods of 10, 5(?) and 8 years.
    On the 737 they also planned a cash cow strategy with the 737NG. A backlog of 2200, “7% cash operating cost advantage” additional orders from loyal customers, to sing it out until 2018. The airlines corrected them months ago.

    Good point keesje! You can’t rest on your laurels too long in this business. Airbus itself was caught off guard with the 787. Nowadays you have to strive to stay one step ahead of the competition.

    It was not always like that. Like in the early days when Boeing could afford to come up late, but with a much better product . In those days Boeing was in a class by itself. The game is more even today.

    • Normand, Airbus wasn’t caught off guard by the 787. Arguably, they were caught off guard by the Dreamliner PR and marketing ploy.

      http://www.seattlepi.com/business/article/Sonic-cruiser-called-publicity-stunt-1092909.php#page-1

      The Boeing Co.’s proposed sonic cruiser has always been nothing more than a “publicity stunt” and Airbus fully expects its U.S. rival to instead develop an all-new more efficient conventional jetliner, a top Airbus executive said.

      “A lot depends on what this new Boeing airplane will be,” Leahy added. “If they want to come out with a plane that is 25 percent more efficient than what’s flying now, then we will have to take a look at what they are doing.”

      Leahy said there is no doubt within Airbus that Boeing will develop the more efficient plane.

      “Absolutely,” he said. “That is something they should do. It’s no secret that the 767 is getting a little long in the tooth. It had a great production run, a good life cycle. But now it is going to be a tanker for the military (the Air Force may lease 100). I don’t see a lot of new passenger versions going out the factory door. And the A330-200 is dominating that market.”

      The Airbus A330-200 is the main competitor to the 767. It has been winning more of the recent order campaigns.

      “We have been waiting for Boeing to come back with a new airplane and I think that’s what they will do (develop the more efficient jet),” Leahy said.

  23. OV-099 :
    Normand, Airbus wasn’t caught off guard by the 787. Arguably, they were caught off guard by the Dreamliner PR and marketing ploy.

    What I had in mind when I wrote that was to show that Boeing is not the only one that failed at times to properly asses the situation. Sometimes Airbus can also be slow to respond when the circumstances would dictate to be more vigilant and carefully prepare the strategy.

    Airbus was lucky that Boeing encountered such a severe setback with the 787. If everything had worked according to plan, Airbus would have been left behind, unable to respond in a timely manner.

    At the time Airbus was ambivalent about the A330, just like Boeing has been ambivalent with the 737. NSA or MAX? By the time Boeing had figured out the answer Airbus was already selling the NEO by the hundreds. The same thing happened to Airbus. By the time they had figured out what to do with the A330 and replaced it with the A350 (essentially an A330MAX), Boeing was already selling the 787 by the hundreds.

    Airbus stumbled but they did not fall. They came back with the A350XWB, a different aircraft altogether. Scott Hamilton has brought to our attention the fact that Boeing was planning to respond in a similar fashion with the 737 by offering a bold new design as well. In the end the NSA was shelved because of aggravating circumstances that were out of control and which left Boeing paralysed.

    • What Airbus didn’t get was that airlines would fall for a fantasy product made via a fantasy process. ( My thinking is that two types of airlines fell for the PR : those with a similar to Boeing management setup (example: Quantas) and smaller, less professional, airlines that fantasised about playing among the big. The japanese carriers are in a separate class via Japan/US industrial “bondage” )

      It would still be very interesting to know when Airbus had hard facts at hand to coroborate
      their dreamliner evaluation. Must have been significantly earlier than the “lessons learned” PPT.
      IMHO the faction balance inside Airbus from essentially upgrading the A330 to the “fits different slot” XWB seems to have happened after Airbus had relative certainty that Boeing
      had layed out the minefield with all care for the Dreamliner to be mired and delayed for years
      and then not meeting specs.

  24. How is this for hindsight?!

    Imagine Airbus stuck to ther guns, ignored such people as Mr. Udvar-Hazy and developed their original A35 version.

    Where would they, and Boeing be now?

    My belief is that the A330 would no longer be produced, the (original) A350 would have been flying for the last couple of years now, gaining alot of late orders and with potentially alot more 787 cancellations (probably hurting the A320 NEO plan as Boeing would be having to compensate many more of their customers with 737s) and Airbus would probably now be developing what is now the A350XWB albeit with alot less composites, after having a better look at the 787 experience.

    Maybe a bit extreme but if this were a likely scenario, one can see why Boeing works so hard on its PR or spin, as some would call it.

    It still makes me ask how such “professionals” as the airline buyers are supposed to be, had fallen for the smooth talk and massive hyperbole? My guess is the bait and switch from the Sonic Cruiser (remember that great red herring) to the “super economic, high technology structural material, new generation engines (which by themselves were to account for 15% of the savings, hence Airbus’ inital strategy) and wonderfully modern production strategy 787”.

    Ohhh how quickly some forget.

    All if this also leads me to say that I believe kjeese is correct in his belief that Airbus will do a NEO on the A330. But with a large backlog, I also agree with Andreas that now is not the time to do such a thing. But wait for it in about 5-10 years. Glare fuselage panels and new technology engines. Much of course depends on what the 787 manages to achieve in the meantime.

    • It certainly tells a lot that some airlines fell
      for what is called in the anthropolical domain a “cargo cult”.
      Here: Boeing superficially replicating the Airbus way of production.

  25. Reply to Normand #36. You are right about Mr. Gates. I forwarded my comment to him last night and asked for his comments. We’ll see.

  26. Reply to NYC Dude #23. The problem is not with current management. It’s with the supply system which I think the evidence now clearly shows can never be made to work as intended, or even close to what was intended. Current management did not design that system, they inherited it, and have had no choice but to try to overcome its dysfuntionality. The real question now is, can B manage either the collapse or severe contraction of the 787 program so they can survive as a company. Lots of irony here, because they may need a gov’t bail out like the auto industry has had, but they may have forfeited that possibility by objecting Airbus’ gov’t loans. The cancellations may actually save the program because they might make it more manageble for B – delivering say 200-250 planes within the max time their customers will wait before cancelling, instead of nearly 900.

    • The problem is not with current management.
      Hm, only with those that didn’t make up the old ( we want dreamliner ) management too.
      Those are innocent because they had no chance for at sin 😉

      Looking at the competition and having warm thoughts of “Want that too” doesn’t in any
      way lead to materialisation of those processes for your cosy corporate home.
      The reason why I brought up the moniker of “Cargo Cult” for the Dreamliner manufacturing system.

      IMHO Boeing management (still?) don’t know what makes the wheels turn (relatively)
      smoothly at Airbus.
      Additionally they seem to have no grasp what they used to have!
      i.e. shop floor engineering done “silently” as by pixies to fix issues iherent in their designs
      ( and that never made it back into the definitive drawings: see commentaries over the 747-8
      upgrade effort )

      “Majorly reducing ramp up.”
      What demand guarantees has Boeing given their partners? ( poor buggers they are imho )
      All would stay at lower production rates bleeding money.

  27. Aero Ninja :
    How is this for hindsight?!
    Imagine Airbus stuck to ther guns, ignored such people as Mr. Udvar-Hazy and developed their original A35 version.
    Where would they, and Boeing be now?
    My belief is that the A330 would no longer be produced, the (original) A350 would have been flying for the last couple of years now, gaining alot of late orders and with potentially alot more 787 cancellations (probably hurting the A320 NEO plan as Boeing would be having to compensate many more of their customers with 737s) and Airbus would probably now be developing what is now the A350XWB albeit with alot less composites, after having a better look at the 787 experience.

    How is this for hindsight you ask mockingly? I would answer that you would not yourself be able to present your case today without the benefit of hindsight. By the way, it’s a compelling case you have. When this whole story was unfolding I was myself ambivalent. I was initially leaning towards an A330 “NEO”. But the pressure on Airbus was mounting everyday. It came to a point where they no longer had the choice. The airlines were demanding a new all-composite design and nothing else would do. And I bought into that myself. Again, with the benefit of hindsight it’s obvious that Airbus would have greatly benefited form the original A350 design, like they do today with the A320NEO.

    But market pressures forced them to opt for the A350XWB instead. When I learned that it would fit nicely between the 787 and the 777, I thought it was a great move and I quickly forgot about an A330 re-engining. And I still think they made the right decision, under pressure or not. With the A350XWB Airbus hit two birds with one stone (787/777). And with the Trent XWB, Rolls-Royce themselves hit three birds with one stone (-800/-900/-1000).

    What we still don’t really know at this stage is what would be the best choices in terms of technology? Metal alloys or composite fuselage? Composite panels or one piece composite fuselage sections? Bleed-less, all-electric or hydraulic/pneumatic/electric? It’s too early to tell. We still have a lot of information to extract from the new manufacturing processes and the realities of real-life airline operations.

  28. Airbus had to replace the A340 too.

    An A330NEO could not have covered that requirement in terms of payload-range capabilities.

    IMO a new emerging gap for Airbus is inbetween the A321NEO and A350-900. A rather large niche, 200-300 seat short-medium haul. The A350-800 likely is heavy /ULH.

    The 787-8, 787-9, A330s, 767s, A300/310s, Tu154 are (will be) in there in large numbers.

    Stretching / beefing up the A321 NEO (wing) is also a (partial) solution

  29. I sent my #36 to Dominic Gates for his comment net. Here is what he said:

    From:
    “Dominic Gates”
    View contact details
    To:
    “Christopher Dye”

    Christopher,

    Thanks for your note. Regarding the 787 ramp up, I don’t believe Boeing will make it to 13/month as fast as it projects. But how disastrous will it be? I withhold judgment until there is more information.

    By the way, Boeing is not admitting to any production issue. The first United jet, it says, is still eight months from delivery only because it has to go through “change incorporation,” i.e. post-certification modifications since it was assembled primarily during the flight test program. (In addition, it has GE engines, which are still in flight test.)

    However, this only underlines how far away they are from any routine assembly process. There is a long way to go.

    As for profitability, well, that’s even more doubtful, as I have written.

    Dominic Gates

    Seattle Times

    Aerospace Reporter

    • “As for profitability, well, that’s even more doubtful, as I have written.”

      See Jon Ostrower’s posting from yesterday ( October 20 )
      “Boeing’s 787 accounting block a big break from its history”

      ?sneak peak? on next weeks third quarter earnings report.

  30. keesje :
    IMO a new emerging gap for Airbus is inbetween the A321NEO and A350-900. A rather large niche, 200-300 seat short-medium haul. The A350-800 likely is heavy /ULH.

    There is room for a small twin-aisle there for sure. And I would like to call it the A390. P&W could scale up the GTF to fit the A390 requirements in terms of propulsion. A logical progression for Pratt, in my view. Possibly in cooperation with Rolls-Royce and MTU.

    The A320 replacement can wait because there is no void there to urgently fill, like there is one in the 200-300 seat short-medium haul, as you have pointed out.

    It would be a nice project to initiate when the A380, A400M and A350XWB are behind them. They could first work on the A320NEO, and as more engineering resources become available they could start on the A390.

    I would expect the competition to come from Russia or China, but not from Boeing. They will still be to deep into the 787 morass to be able to respond.

  31. Keesje & Normand – It’s not just between the A321NEO and the A359, but also the A350-1000 and the A380 (about 200 seats). These two gaps arose for three reasons primarily:

    1. A made a serious conceptual misstate in the late -90s by deciding to attack the 744 from below with the A356 with four engines instead of two, and from above with the A380, which is not selling now at any where near the numbers A had projected to justify the program in the first place. (Uwe, I say this for the sake of argument. It is NOT an invitation to re-engage with our past marathon on this point.)

    2. A allowed itself to be spooked by the 787 and the demands of SU-H, Tim Clark, and others that they build their own plastic plane instead of up-dating the A332/3, a proven winner. (Since then, A has gotten a lot tougher with customer loud mouths – Leahy telling U-H to stuff his criticism of the A320NEO and either Enders or Williams just the other day saying that they are not going to continuously redesign the 350-1000 based on customer criticisms. Maybe listening the U-Turn gave them that spine.). Uwe speculates that A figured out that the 787 was quick sand for B, and then went with the A350. His #45. Maybe so. Problem was, this perceived need to build the A350XWB arose at a time when A did not have the resources to build the two plane types they needed to cover the lower (200-230) pax and upper (350-400 pax) ends of the 200-400 seat twin-engined wide-body mkt.

    3. So, they made a third much more serious conceptual error and plunked the A350 in the middle of the 200-400 pax mkt, instead of the 300-400 seat segment where they needed a family of competitors, and relying on the A330 to give them a substantial presence below until they could something new there. A is now in trouble with the A350 because neither the A358 nor the A350-1000 is working. (Tinseth has been trumpeting the -1000’s non-sales vs. the -300ERs continued strong sales, which I would be doing too if I had the unenviable, daily task of diverting public attention from the on-going comic book horror story of the 787).

    But the 787’s problems should not obscure the fact that B’s strategy in doing it was very sound in light of the failure of the A356 and the fact that the 767 and A330 covered different segments of the 200-300 pax mkt. That strategy was to build one new plane type to replace all variants of the 767/330, keep plugging with the -300ER for which A had no competition, and fight for the 300 pax mkt with the 772ER. Altho this last has not worked out, B is in the position now to build a whole new family of planes covering the 310-400 pax mkt, either clean sheeters from the beginning or first PIPing the 772/3ERs and then clean sheeters. A is left with only the A359, which conceptually is in the right place, but has no family above and below it to draw customers for commonality reasons, while B’s 787 and 777 families meet at the A359. Customers wanting planes in either or both of the upper and lower ends of the mkt which A does not serve will be draw to the 787-10 or 772PIP/new plane for commonality reasons.

    At least that was B’s very good idea. Sadly, like some pea brained dinosaur they rumbled right into the quicksand even thought it was clearly evident in front of them. To me, the real story behind the 787 that must be told is not as B is framing it: We learned from learned from our mistakes. It is, why did B not see from the beginning that their production system was dysfunctional when it was obvious? Why did they heedlessly charge into the quicksand when it was right in front of them?

    • 1) Scipio: FAA 4 ETOPS 😉

      2) very much yes.

      3) debatable. IMHO it makes sense to marginalise the 777 into its top corner from below
      with a significantly more efficient craft. The pond just below the A380’s size is overpopulated ( 777 and 748 ).
      Both airframers have learned ( experience, watching ) that exact matches lead to a dual deathrun.

      Going by the promises the 787 was perfect, next best thing to cut bread.
      Topping : a price offer below all expectations.
      … Too good to be true :- (

      A type fitting the slot between NB and WB craft could be interesting.
      But: is that slot currently unpopulated due to a valley of underperformace between peaks or lack of demand for that capacity range. ( or something of a hen/egg thing?)

      Last paragraph:
      I brought up the Cargo Cult likening. IMHO this fits. Boeing did go through the motions of their (very limited) understanding how Airbus functions and expected to be successfull.

      They just didn’t see.
      Additionally Boeing’s top product today is “shareholder value management”.
      In contrast to the pile up on the shopfloor this is still working quite well.
      Airbus has lost more share value in reaction to much lesser infractions.

    • Hi Chris, we’ve been through this several times before. 😉

      Last time around:

      http://leehamnews.wordpress.com/2011/06/23/leahy-to-boeing-youre-whistling-past-the-graveyard/

      Now (again), Airbus couldn’t “attack” the 744 from below with an upgraded A330 without developing a whole new wing that would have been able to accommodate a significantly larger engine. A346 used a much cheaper tapered wing insert while retaining much of the production infrastructure for the wing’s movable surfaces. An upgraded A330 would in all likelihood have been significantly smaller than an A346m, or nearer the A345 in length. Hence it would not really have competed with the 744 (from below).

      Though there is a risk of becoming boringly repetitive on this point, it is worth stating, a number of times, that the A380 has currently no (real) competitor; it will in all likelihood have no real competitor for at least another two decades; it’s built to, among other things, accommodate the projected massive increase in air travel outside the US and Europe where most of growth will be through ever larger hubs (such as this one: ****); and that, consequently, the near certainty that the A388 (the “mini” version) will be supplanted by stretched versions of the aircraft due to a near certainty of an ever increasing demand for planes the size of an A388, or even larger, however incredulous that may sound to some people with a western mindset who are not only seemingly unable to grasp how the massive growth in Asia, in particular, will massively influence the future of air travel, but also that the P2P BS — that somehow hubs would become ever less important — was really nothing more than yet another 787 marketing gimmick.

      **** http://nos.nl/artikel/254017-nederlanders-ontwerpen-grootste-vliegveld-ter-wereld.html

      As for your views on a perceived product gap on Airbus’ part, the A380, the A350-1000 and Boeing’s supposedly “superior” product strategy, please do note:

      i) The extremely high likelihood that A350-1000 will be significantly superior to the 77W despite the ramblings of SUH, Clarke and Al Baker.

      ii) That the best “gap filler” between the A350-1000/77W would IMO not be a stretched A350-1000 or 77W, but rather a new twin-family with one-and-a-half deck configuration (similar in concept to the 747) incorporating an A380 type raised cockpit position and with the smallest model having a floor area of about 380 m3; or about 20 percent greater floor area than that of the A350-1000.

      http://www.youtube.com/watch?v=Deivz0U7RBk

      • OV, I agree 100% with your assessment of the A380. The king is dead (747). Long live to the king (A380).

        Speaking of king, your “Music for the Funeral of Queen Mary” is certainly not the best performance, but fascinating to watch nevertheless.

  32. Normand Hamel :
    Speaking of king, your “Music for the Funeral of Queen Mary” is certainly not the best performance, but fascinating to watch nevertheless.

    I love these old instruments. They remind me of the control column and yoke on the Dreamliner.

    • Normand I meant to address my remarks below to you as well.

  33. To OV 99, Uwe, Keesje, and all the ships at sea. My point is:

    1. A’s strategy of attacking the 747 in the first place was wrong because it was clear in the mid ‘90s that the mkt was trending away from VLAs to smaller planes. A knew this because they designed the A346 for that developing smaller mkt, just as they knew B would likely do with the 773. The better strategy was to do a new family in the 320-400 pax mkt, where they had no presence, with a 280 seater at the top that would attack the 747 from below, and smaller plane at the bottom where it could compete with the 772ER.

    2. It was also clear then that big twins were the better way to go. A had learned this with the A342/3. If Uwe is correct that A could not have built a big twin in the late ‘90s, then IMHO the better strategy would have been to wait and do nothing until they could. That is essentially what the failure of the 346 has forced them to do now with the 350. They are using the 350 to do what they should have done earlier in the decade, but only after wasting billions on the A346 and A380. Uwe, I do not believe for a minute that if A had said they wanted engines for a family between 320-380 pax from a single source that the industry would not have responded in one way or another, likely a combination. The key was single sourcing the way B/GE did with the -300ER, which incidently is exactly what A/RR are doing now with the 350.

    3. I am not saying that reasonable people could not disagree on these questions. I am saying that in the mid-nineties when A made its 346/380 decisions, the industry was clearly in the midst of historic changes which IMHO boiled down to the high likelihood that the rules would be changed to allow long range, twin-engined ETOPS, that mkts world wide would explode, that point/point would be the more likely route structure than hub/hub and in any case would produce a huge mkt for planes that could fly point/point, and that fuel prices were very likely to rise over the 20 year periods airlines kept planes, rather than drop. If A had been open to paying full attention to these trends, they would have seen that building a new family of large twins in the 3-400 pax mkt would likely be much more profitable than attacking the 747, which even then was headed for assisted living all on its own. A took the 346/380 decision partly to deprive B of what they saw as their 747 cash cow, but largely to give A what they viewed as a product line up that competed with B’s across the board. They failed because until they deliver the 359 they will continue to offer nothing between the 343 and 380. A took this decision because their senior leadership was not good. The fact that A is very well run now obscures this fact. I will match Stonecipher and Bear against Forgard and company any day of the week.

    4. Re the A350, IMHO A misconceived that family. If Uwe is right that A knew of B’s 787 problems, then the best approach would have been to place the family in the 330-385 pax segment, and wait and see how deeply B sank into the 787 quagmire before deciding what to do with the 330. This would have taken the guts to stand up to SU-H etc, which they did not have.

    5. One weakness in my argument may be that the entire 3-400 pax mkt will not profitably support two families of similar planes, and knowing this, A ceded the upper part to B and hope to dominate the lower end with the A359/1000, 314-350 seats. This may be why Uwe thinks B should concentrate of the upper end of that mkt – the 359-1000 can’t get there. According to Flightblogger, B is considering improving the 772LR and 773ER.

    http://www.flightglobal.com/blogs/flightblogger/2011/09/boeings-777-upgrades-come-into.html

    The idea is apparently to compete in the 300-330 segment with the shorter range 7810 and the LR 772. But maybe B will not compete there at all if the 359 is as good as it looks and the expenses of competing there just make a very bad 787 balance sheet even worse.

  34. 1) A had principal need of a product at the top of the market. king with no crown, you know ,-)
    The A380 is the smallest sibbling in the Airbus future VLA family straddling twice the 747’s capacity. IMHO the P2P model is an exceptionally US centric view. Asia is different.
    Note that 200klbsf engines are still far off.

    2) I didn’t have available engines in mind. Airbus would not have got easy certfication for extended ETOPS ( i.e. the FAA would have balked to create the framework. Compare to the A300/310 doing ETOPS-equivalent routes well before the 767 entered the market and the FAA did Boeings bidding in creating ETOPS certifiability.

    3) Even Airbus can’t do everything at once. Resources are limited, take time to grow and should not be stimulated into watershoots.

    4) IMHO Airbus then did not realise that SUH was a “Trojan U-boat” and the sales sucesses of the Dreamliner must have created quite the intellectual dissonance at Airbus.

    5) I don’t think “Boeing should concentrate on the upper 777 segment.” I think they “will be limited to the upper segment” and the 777 has low upward growth potential. i.e. imho Boeing will loose the easy 777 sales in the future. Fully matching the 777 would shorten the efficiency advance the A350 will have over the 777.
    A lot will turn around when and how the A350-900 will master flighttests,certification and EIS.
    Market participants are shy and overly conservative at the moment.
    If the A350 delivers, this will imho abruptly change for Airbus while Boeing will not have this cusp available before the EIS of the 787-9 “Mk2”.

    Airbus biggest blunder in the recent past was the management upheaval ~2000.
    Another one was letting CASA work unsupervised on the A400M. The Coalition of the Willing closeness should have raised more attention.
    Most other decission were ok, while there may be some that were not optimal
    ( but more from hindsight than outlook at the time of decission).

    The quality measure here is good or bad hedging imho and using the window of opportunity
    for those decissions. In contrast I think Boeing is a notorious late decider and on occasion trapped like Kafka’s Mouse.

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