Wells Fargo estimates Southwest paid base price $34.7m for MAX

In a new research note issued today, Wells Fargo estimates that Southwest Airlines paid a based price of $34.7m each for the Boeing 737-8 MAX.

The investment bank published the following table, followed by the text:

Prior to Southwest Airlines’ decision to defer 30 Boeing 737-800 deliveries from 2012-13 to 2017-18, it
published the data above in its latest 10-Q. We estimate that (after factoring in PDPs) SWA is paying ~$5.67B for the 131 MAXs in 2019-2022, or $43.3M each; assuming an average of nine years of price escalation at 2.5%/year, the base price would be $34.7M – a 64% discount off the 737MAX-8 list price. We do not view this as an indication of a “price war” between Boeing and Airbus, as SWA is a priority 737 operator that was certain to receive the most favorable MAX launch-customer pricing.

This is a somewhat deeper discount than we thought: 60%. If true, we can say that discounts of 60% for top customers are not unknown, even if they are not common. We understand Boeing is currently offering the MAX at discounts in excess of 50% but we can’t nail it down any closer than this.

Airbus likewise is known to offer discounts of up to 60% on the A320 family.

So what about the “price war?” Our information is that this extends to the 737NG and the A320ceo. Airbus and Boeing have each connected sales of the current generation of airplanes to the re-engined models in part to sustain current and announced production rates and to prevent a drop in cash in the run-up to EIS of the new airplanes. This means dropping the price on the current generation to help. (Separately, this also means drops in lease rates and residual values.)

Then there is the competition for only current generation aircraft, such as last year’s Delta Air Lines order for 100 -900ERs over the A321. He heard straight away that this came down to a price war and Boeing won. After the Airbus win at American Airlines, there was no way Boeing was going to lose Delta, and we heard at the time Boeing under-priced Airbus by about 10%. (Recall, too, that Boeing under-priced EADS by 10% in the tanker competition.)

We are hearing United Airlines also came down to price. We expect this Boeing win to be announced before at at Farnborough.

Bernstein Research, in a note also issued today about the EADS first quarter earnings call, had this to say about a price war:

A320 pricing should be a near term strength, but long term risk. A320 pricing was described as
“above expectations” with no declines seen in 2011 orders, and premiums captured for the A320neo. In
contrast, Boeing has said that it sees Airbus pricing aggressively, with the result that narrowbody prices are being taken down for both the A320 and 737. We believe the answer lies somewhere in the middle with certain customers (e.g. American, Norwegian Air Shuttle) driving aggressive price competitions, but with reasonably solid A320 pricing elsewhere. Based on our customer discussions, however, we do not believe that either Airbus or Boeing is capturing significant premiums for their reengined models (only relative to lower prices for their current generation airplanes).

49 Comments on “Wells Fargo estimates Southwest paid base price $34.7m for MAX

  1. That would be soooo Airbus for Boeing to hold announcing an (UA) order until the next air show. Will Boeing have the BATW demonstrator airplane, a B-737-700BBJ at the FAS?

    I don’t think Boeing giving WN a 60%-65% discount as a loyal customer and launch customer to be that big of a deal. Since, as you said, Airbus is doing the same thing.

    • There is a difference between Airbus and Boeing in regards to heavy discounts. When Airbus was practicing predatory pricing on the A320 and other models, it was in a climb at full power. But today it is Boeing which is forced to slash prices, and therefore its profits. But it is doing it in a power-off descent, which could turn into a CFIT if the fog that is obscuring its vision does not clear soon.

      Yes Mr McNerney, ignore the big chunk of ice in front of the ship and keep the music going, and your guesses dancing and drinking champaign. 🙁

      • Boeing’s stock values and quarterly profit statements don’t agree with you.

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  3. i’d like to know if someone is paying catalog price ? does anyone know the reason for such a difference between official and real deals ?

    • John Leahy said a couple of years ago that he once had a customer who almost paid list price for one airplane. That probably pretty well sums up the situation.

      • I wonder how that customer feels about the situation now.

  4. Wasn’t EasyJet in that same range for discount? Doesn’t seem to me to be that absurd considering it was a large order and they were the launch customer, not to mention extremely loyal customer.

      • It will be interesting to see what _average_ rebates knowledgeable people extract from financial data in the coming years.
        Much more interesting than going breathlessly after minima and maxima.

  5. KC135TopBoom :
    Boeing’s stock values and quarterly profit statements don’t agree with you.

    Exactly! But the problem with this is that when you have your nose stuck in the last quarterly results you can’t see what’s coming ahead.

    If I sound pessimistic about Boeing it is because I see a long term trend where Airbus has all it’s ducks well lined up, while Boeing is still improvising. Look back at what Airbus has accomplished in the last thirty years. Compare it to what Boeing has accomplished in the same period. Now turn 180 degree and look forward to see where Airbus will be in ten years from now, and compare it to where you think Boeing will be.

    The situation is alarming, like it was in 2005, a few years before the Great Recession hit. There were a few individuals at the time who were alarmed about the state of the economy, like I am today for Boeing, but very few people paid any attention to those prophets of doom.

    Forget the rosy quarterly results for a moment and look at the overall situation at Boeing. Since you are an Air Force guy, start with the military programs. Not those that are underway. But those that would normally have come in due time, but will not materialize for a long while because the military expenditures around the world are going down.

    In Space there is not much going on outside of China. Forget the glory days of the Space Race of the sixties. It was a lot of fun, but I am afraid the party is over.

    Boeing Commercial Airplane is the division that most of us have in mind when we say “Boeing”. It accounts for roughly 50% of the overall business of the company. Where is it today, ninety-five years after it was first incorporated? Again, forget the glory days of the sixties when it obliterated the competition, starting with the British, and were eventually left with only one rival, McDonnell-Douglas, which they gobbled up in the mid-nineties.

    Take a look at the BCA programs. The best seller came to this world in 1968. That was 44 years ago. Many of us here were not even born at the time! Would you be ready to say that it still has a great future ahead? And what about the latest baby? A dream that never came true, but a nightmare that refuses to go away. But there is also the young adult in the middle. They want to give him a new set of wings. But he is in his prime years, why would he need a new set of wings?

    In the meantime the neighbours are growing their families, and it looks like each offspring has a very promising future. But I am afraid BCA will not be able to keep up with the Joneses for very long.

    • Well, in 1968 I was about to enter the US Air Force to begin my 22 year career in the Strategic Air Command.

      I am sorry, I just don’t see much innovation on the Airbus side over the last 30 years that you see. FBW? Nope, by the time Airbus introduced it on the A-320, FBW had already been flying around for 12 years on the F-16. So, I guess GD actually developed it? Other than that they have been copying Boeing and expanding their families of airplanes, and have done well at it. Airbus cannot even claim FBW in large airplanes as the USAF began developement on what was the (then) C-X program, and that became the C-17 (MDD at the time).

      Boeing, OTOH has revolutionalized how we travel by air with the B-777 family, and even stepped ahead with the next level of technology in composite airplanes with the B-787. Yes, composites have also been used on military airplanes for years, but never in an (almost) entire airplane (fuselarge and wings).

      • if you ignore the first big twin, long twin overwater operations pre Etops, first supersonic airliner, full twin deck super jumbo, composites for airliner primairy structures, thermoplastics for primairy structures, airline FBW, glare and hundreds of patents, Airbus has been pretty much copying. Airbus parent companies included first jet -aircraft, -airliner, -fighter, etc. but that doesn’t count probably.

    • As for Airbus, I think the A358 and the beefed up A3510 was a mistake. They should have just built the A359 and a shorter range A3510 at the same weight. As for Boeing the 777x is a gamble. What if the 777-300ER is replaced with CFRP 787-9 and A359? The 747 was replaced with 767s and 777s, so downsizing with a higher tech aircraft is not unthinkable. Other than that it looks like both companies are doing everthing right in commercial aircraft.

    • Yes let’s look forward 10 years. A330 and 767 (commercial) will be out of production. A380 will be struggling to break even at low production rates, 747 will be building most if not all freighters.

      The 787-9 will be in full production, the -10 will be ramping up taking most of the under 300 pax market. The 777-8/-9 will have the 350-400 pax market and the A350 will try to compete with both in-between. It is a bit early to doom the 787 – few customers have cancelled orders, the first few are operating at high dispatch rates and rumor has it that the performance is better than anticipated. As for the A350, the 787 at a similar point in development (spring 1987) looked fine also.

      Neo and Max will be fighting for market share. Now who’s going to announce the first all-new single aisle?

  6. Airbus also established the two crew cockpit (forward-facing crew compartment) with the A300-600. This is one of the most striking landmark of commercial aviation!

    The FBW was in fact developed for the Concorde, something that is rarely acknowledged.

    There are many of other things to mention and yes, Boeing has its share of innovation ;).

    keesje :
    if you ignore the first big twin, long twin overwater operations pre Etops, first supersonic airliner, full twin deck super jumbo, composites for airliner primairy structures, thermoplastics for primairy structures, airline FBW, glare and hundreds of patents, Airbus has been pretty much copying. Airbus parent companies included first jet -aircraft, -airliner, -fighter, etc. but that doesn’t count probably.

    • All probably worthless in TB eyes, as it didn’t come with a paperclip 😉

      • Actually, the first major modern jet airliner to have a two person cockpit was the B-737. The first twin ETOPs certified aircraft was the B-767.

  7. “The first twin ETOPs certified aircraft was the B-767.”

    TB, as you know, long overwater twin flights were pioneered by the A300. The 767 was a very succesfull responds 10 yrs later and Regulations were formalized under the new name ETOPS.

    It seems You are succesfully trying to move the topic aways from the alarming discounts Boeing is handing out on the 737MAX, even to its most loyal customer, for which a switch to Airbus seems unlikely / unfeasible in everyones book.

    I far as I am considered, the current MAX orders “and commitments are, to be honest, unconvincing at this point (special conditions, politics, huge discountes). I hope Farnborough will change this with more credible orders.

    The general perception seems to be Airbus is meanwhile sitting on its hands, with regards to specs and sales. I don’t think so.

    • Actually the A-300B1 and B2 had relitively short range of about 3000 nm, or less. The B1, B2, and B4 all had 3 man cockpits. The two man cockpit didn’t come along until the A-300B4-200FF (foreward facing cockpit) in 1982. The B4 also increased range to 3600 nm because it had a center wing fuel tank.

      Perhaps I shouldn’t have even brought up the A-300B1 as only two were built and they were the type’s prototype airplanes. The B2 was the first production version.

      Now back to the B-737MAX discounts. Does anyone here actually believe Boeing is the only OEM handing out huge discounts? Airbus has handed out 60%+ discounts on the A-320NEO. In the first 6 months the NEO was offered (Dec 2010-May 2011) the NEO only had two orders, VX and ILFC. Then in June, July, and August 2011 it got 12 orders (7 of those announced during the PAS). The B-737MAX was announced in August 2011 and from the MAX announcement until now the NEO has gotten 11 orders (Oct 2011 until now), matching what the MAX has accumulated in that time. For Airbus orders and committments in that time period, they have sold 646 airplanes, less than half the number of airplanes Boeing has gotten since it was launched last August (I have not counted optioned aircraft for either the MAX or NEO).

      So Airbus has, and continues to offer huge discounts for the NEO. To me, that says that both the MAX and NEO are competitively priced at actual pricing, as compared to the listed price of each model.

      • TB I think discounts are a result of the quality of your offering, market demand and competition.

        There seems to be a significant difference between the NEO and MAX there. Resulting in different contracts/ marketshares.

        Boeing sheering it aint so and parity has been re-established is logical from a PR standpoint. What the industry does with the current situation is an open question.

        We can get creative with dates, numbers, but it doesn’t create a new market reality.

        It seems to me ” Airbus gives huge discounts” has become a kind of Pavlov reaction every time Airbus scored a major order, often with Boeing being the loosing competitor. The times these huge discounts claims have been backed-up by more then general wisdom of mostly US based observers. Maybe its only a comfortable way out to claim huge discounts from the other party. It keeps the believe, value and hope “our product is better, so we are” intact.

      • TopBoom, where is your factual backup that Airbus offered neo discounts of more than 60%?
        And in point-of-fact, although Boeing announced 1,000 commitments between July 2011 and December 2011, only 415 have been converted to firm orders. If you’re not counting options, you shouldn’t count something that’s even less than options.

        • I have none. These are only the rumors I have heard about the AA order. The rumored discount given to AA, just so Airbus could ‘get their foot in the door’ is 70%. But I cannot confirm that.

      • Regarding leehamnet comment to TopBoom:

        “TopBoom, where is your factual backup that Airbus offered neo discounts of more than 60%?”

        This thread was started on a Wells Fargo estimate. Well they also said this about the AA Neo deal…

        Quote:

        “Wells Fargo Securities said in a note on Monday that its own analysis of AMR filings pointed to a purchase price of around $30 million for the A320neo or re-engined 737, adding this could even work out at $27 million in today’s dollars.

        The brokerage said this compared with third-party appraisal values of $45 million for the existing model of Boeing 737-800.

        Aircraft manufacturers typically sell at discounts and prices are seen as especially keen when a new product is being launched. However, Wells Fargo said the prices which it had deduced from AMR securities filings would be “outstanding”.

        Competition to win the American deal was seen as intense.

        Aircraft analyst Scott Hamilton of Leeham Co reported during negotiations that the planes could be valued at $30 million.”

        http://www.reuters.com/article/2011/07/26/us-eads-airbus-prices-idUSTRE76P4JN20110726

        I especially like the last sentence. What is that about?

        If ture? That would be a discount of 67% for the A320neo or 55% for the 737-800.

  8. I have just finished my shift & i whould like to inform you all that a 747/8f belonging to atlas at london std could not retrack the flaps & bent apart or 2 and flys with a engineer on board to fix the bird if it goes wrong again

  9. “Then there is the competition for only current generation aircraft, such as last year’s Delta Air Lines order for 100 -900ERs over the A321. He heard straight away that this came down to a price war and Boeing won. ”

    IMO another example of Delta/NWAC mngt taking a smart, no nonsense, against the mainstream fleet decision.. No doubt the A321, NEO and MAX will be better, but DL gets a hundred very efficient, proven 200 seaters, for a very good price, fully compatible with its current NG fleet. Not from maybe 2017 or 2018 but probably starting next yr, with fast/ low risk delivery of all of them, including a sharp 10 yr (?) deal with CFMI..

  10. I think it is safe to say that both companies have made a fair number of innovations. However, looking at the big picture, Boeing has managed to keep 4 of the 5 airplanes it has designed since 1967 (exception the 757) in production and to sell more than 1000 of all of them. Airbus in fewer years has managed to introduce 6 new models yet 3 are now gone, and only two of these have sold more than 1000.

    The 777 dominates the twin aisles and left has little market for the 4 engine airplanes. Airbus has been forced to react with the A350. Boeing dominates the Cargo Business (747F and now the 777F). The A330 is an excellent airplane that dominated the 767 in the marketplace, but it is now threatened by the 787. The A380 was a huge expense that will likely never be a financial success. Time will tell how much a threat the A350 is to the 777. I think we will find in the next five to ten years the twin aisle market will be dominated by the 777/787 over the A350 leaving only a small market for the A380 and 747.

    The A320 and 737 have a relatively even split in the single aisle market, so it is a hard argument to make that one is significantly superior to the other. This will likely remainly true through the rest of the decade.

    • I think Boeings looks better the further we look back. Today:
      – Boeing has to modify the B737 and B777. Forced by the market.
      – The 787 and 747-8 investments, performance and ROI remain an unpopular topic.

      Airbus seems comfortable with the A320, NEO, A330 and A380.
      The A350 is an industrial challenge but looks good. I expect some perception changing orders for the -1000 soon. The A380 is expensive, low numbers (75 in service), popular (19 customers) and .. enjoys a monopoly.

      IMO on top Airbus has some low risk options under the table this decade (A380-900, A330 NEO, A320 and A321 stretched) to keep on the pressure.

      On the prices Southwest and others paid for the 737 MAX, they are a result of the 737 MAX’current marketing position. Despite the upbeat flares of Randy: the industry sits on the fence and “can’t refuse” offerings and conditions are needed to get them off. Even SW.

      • I must admit Keesje, I do enjoy your contributions. Even though I rarely agree with. Regarding how Boeing looks today? Most analysts that I have seen lately, seem to prefer the Boeing WB line-up 787-8/9/10 & 777-8/9X vs. the AB line-up A330, A350-8/9/1000.

        As far as Airbus being comfortable with the A320? In 2010 JL said he would not except 1/3 NB order ratio with Boeing and within a month or two… The launch of the NEO. Doesn’t sound that comforting to me??

        The A330, while a great airplane. I suspect after this year (depending on the 787 ramp-up) that orders will start to rapidly slow. There will Not likely be a A330NEO as it would really only poach A350 sales. Not Boeing sales.

        I don’t really have an opinion on a A389? But I don’t see it being announced in the next couple of years. At least until the wing issues are completely resolved.

        Stretched A320/321? Think 777-8/9X and Refer to to your own and other airbus fans comments regarding the costs of said projects. That seems to at odds with AB’s own plans to keep costs to a minimum in the NB market.

        Prices? quoting you keesje…
        “On the prices Southwest and others paid for the 737 MAX, they are a result of the 737 MAX’current marketing position.”

        You did see the other WF estimate above right?

        http://www.reuters.com/article/2011/07/26/us-eads-airbus-prices-idUSTRE76P4JN20110726

        Personally, I think the numbers from both WF statements are meaningless in their contents about list prices.

        But hey keesje, If you think they are? Then I would much happier if I were Boeing making $34.7M per MAX Vs. Airbus getting $27M per NEO. That would mean that Boeing is making $7.7M more per MAX then Airbus for the NEO?

        Do you believe that might be out of context as well?? 😉

  11. It is easy to “time the market” to get the answer you want, especially when you ignore the A340. Here are the numbers (all from Wikipedia). The count starts at the first order of the Airbus and only the orders for the Boeing from that time forward:

    A380 (2001- Present) 253 orders, B747-400 (2001-2012) 157, B747-8 106.
    Last year 11 747-8’s were ordered, 0 A380’s.

    A330/A340 (1993-2012) = 1,239 vs. B777 1,367 (deliveries – orders N/A) and you can add the 500 767’s ordered in the same timeframe. Current backlog: A330: 335, A340: 2, B777: 358.

    A350 – 538 orders, B787 – 853 orders

    Airbus’ itself projects that Boeing will outsell them through 2020. The only bright spot for Airbus at this point is the A320’s.

    • It is easy to “time the market” to get the answer you want, especially when you ignore the A340.

      It is, isn’t it!

      The fact of the matter is that both the 777 programme and the combined A330/A340 programmes were from roughly from the same time period (i.e. a little more than three years separating the launch of the respective programmes. The 767 is irrelevant in this context since it was from the same time period as that of the competing A300-600 and A310

      A330/A340 (1993-2012) = 1,239 vs. B777 1,367 (deliveries – orders N/A) and you can add the 500 767′s ordered in the same timeframe. Current backlog: A330: 335, A340: 2, B777: 358.

      Oh really?

      As of 31st of March, 2012, the total combined A330/A340 order count stands at 1565 units.

      As of 31st of March, 2012, the total order count for the 777 stands at 1367 units.

  12. Observer,

    “In 2010 JL said he would not except 1/3 NB order ratio with Boeing and within a month or two… The launch of the NEO. Doesn’t sound that comforting to me??”

    I think the NEO was more a reaction on the CSERIES, specially the CS300 looks superior to A319, 737-700 and a further stretch seems technical feasible. The A320 was outselling/delivering/ backloging the 737 before 2010.

    “The A330, while a great airplane. I suspect after this year (depending on the 787 ramp-up) that orders will start to rapidly slow. There will Not likely be a A330NEO as it would really only poach A350 sales. Not Boeing sales.”

    The A330 is a cash cow as we speak, production further ramped up beyond 8 a month, new weight reductions being incorporated. Letting it die seems a weak business case, because re-engining looks promising, the A350 is sold out, the A350-800 seems capacity restricted for its range/ costs levels and the 787-8 is sold out for yrs / did not reach predicted cost / unit. E.g. 787 customer JET is considering alternative A330s as we speak ( http://online.wsj.com/article/BT-CO-20120523-705380.html). Similar to SQ, VS, China Eastern and many others.

    AA NEO discounts could have been hefty looking at the conditions. AA was/is a big, respected long term Boeing operator, on Boeings home turf. Airbus invested in getting a foothold. Looking at Boeings positions in this deal, I can only guess what prices / conditions they offered. AA nearly sidelined them for Airbus. They had no choice then to change their strategy, and sell an idea they dismissed shortly before, to avoid a (bigger) PR meltdown.

    “Stretched A320/321? Think 777-8/9X and Refer to to your own and other airbus fans comments regarding the costs of said projects. That seems to at odds with AB’s own plans to keep costs to a minimum in the NB market.”

    Re A320 stretching, it seems likely Airbus has little appetite for this investment. However major operators (AF, Easyjet, Jetblue) or major prospects (Ryanair, Jet) flying 737-800s that have more seat capacity could put on the pressure. IMO the market is slowly outgrowing the A320 cabin and the A321 is way bigger/more expensive.. An A321 stretch would be far more expensive and depends how large the bigger the A321/739 smaller then 787/A330 market is.

    The 777-8/-9 stretches seem like a good idea. (as I said yrs ago http://www.airliners.net/aviation-forums/tech_ops/read.main/257954/#120 ) The A350-900 and A350-1000 seem to offer unbeatable effiency vs the heavier 777s. So the most logical way seems up, reducing costs per unit. A 777-9 would be unchallenged like the -300ER is today (and offer a more credible 747-400 replacement then the -8i proved to be).

    Comparing the A380 to the 747-8 is nonsense IMO. During the last 10 yrs 1 passenger 747 was delivered (LH) and 0 freight A380s..

    • The last pax B-747-400 was delivered in 2005, the last year for delivery of the B-747-400F and -400ERF was 2009. In fact there have been 121 B-747-400/-400ER/-400F/-400ERF/-400M/-8Is delivered since 2002. That is more than the A-380 has delivered.

    • Keesje,

      First, thanks for your more even handed and well thought out comments.

      “I think the NEO was more a reaction on the CSERIES, specially the CS300 looks superior to A319, 737-700 and a further stretch seems technical feasible. The A320 was outselling/delivering/ backloging the 737 before 2010.”

      I can definitely concur that the CS and and other forthcoming projects are a factor in the launch of the NEO. With that said, The A320 was not doing well against the NG in 2010. With the recent updates and PIP’s to the NG, it was clear that without a similar upgrade path for the A320 that AB would not be able to complete effectively against the NG. Hence JL’s comments…

      “outselling/delivering/ backloging the 737 before 2010”

      Before 2010 is the key factor… Out selling and backlog are subjective. The backlog at the end 2010 was very close, but the sales were not, The NG was way ahead for 2010. AB was definitely delivering more aircraft, as they have been since 911 when BA cut production and AB did not.

      One can relate that to Corporate culture? Jobs (socialist) vs. profit (capitalist) in the wider economy. However, that has its effects as well. A further separation in lease valuations in favor of the NG. Which is easy see since 911.

      “The A330 is a cash cow as we speak, production further ramped up beyond 8 a month, new weight reductions being incorporated. Letting it die seems a weak business case, because re-engining looks promising, the A350 is sold out, the A350-800 seems capacity restricted for its range/ costs levels and the 787-8 is sold out for yrs / did not reach predicted cost / unit. E.g. 787 customer JET is considering alternative A330s as we speak (http://online.wsj.com/article/BT-CO-20120523-705380.html).”

      No doubt the the A330 is a present day cash cow for AB. As is the 777 for BA. However, The 777 has no present day adversary (starting 2017 maybe?). The A330 has two, the now in production 787 and AB’s own A358 by 2017? as well. For the life of me I can’t see a A330neo, for two reasons… First, it competes directly against the A358. Second, there have been No new RFP’s issued for an Engine to support this A330neo. And if we look at it objectively?? We can can see that based on other modern aircraft programs, like the potential 777X program that developing an engine for a new variant is a very long lead item (6-7 years?). all we have to do is look at all other current projects to confirm this.

      Next…

      “AA was/is a big, respected long term Boeing operator, on Boeings home turf. Airbus invested in getting a foothold.”

      I believe we (and other websites.. I.E.. airliners.net) have pretty much dispelled those misconceptions. But, here is another one. (predicting a AB sale)

      http://www.reuters.com/article/2012/…airways-capa-idUSBRE84M0AS20120523

      No matter who this sale goes to, the analyst predicts it will be approx. a 64% discount. Nuff said about the whole discount thing.

      “AA nearly sidelined them for Airbus. ”

      The AA deal is perfect example. AB wanted to poach an important BA customer at all costs. And it did, so far the lowest new NB cost per aircraft (estimated by Wells Fargo @ as low as $27M ea. today’s price) at least that I am aware of. Boeing either had to follow them in a race to the bottom or lose the customer completely. AB also provided very favorable finance options or it would not have been possible to make this deal work with a company headed towards bankruptcy.

      “Re A320 stretching”

      Possible yes? I just have seen nothing that would make that a current possibility… Reminds a bit of the 757NG threads. No real substance??

      And than:

      “A350-900 and A350-1000 seem to offer unbeatable effiency vs the heavier 777s.”

      It’s really hard to speculate on how these aircraft will match up? But, you have wrong on the match ups. The A350-1000 will be in competition with the 777-8X not the 9X. As far as weight is concerned? They (8X) could be very close. The A359 would more likely have to compete against the 787-10. And for Airlines that don’t need A359’s range for 85-90% missions, the 787-10 would be very competitive.

      And finally:

      “Comparing the A380 to the 747-8 is nonsense IMO. During the last 10 yrs 1 passenger 747 was delivered (LH) and 0 freight A380s..”

      I’m not sure this is directed at me?? As I have made no comments on that subject.

      rgds, Keesje

  13. Most analysts that I have seen lately, seem to prefer the Boeing WB line-up 787-8/9/10 & 777-8/9X vs. the AB line-up A330, A350-8/9/1000.

    Observer, you are comparing a line-up portfolio of one all new aircraft programme and one very expensive aircraft upgrade programme from one OEM with one all new aircraft programme and one existing non-upgraded aircraft from the other OEM.

    With all due respect, but that sounds like a very Saj Ahmad-esque thing to do.

    Any reasonably able analyst would, of course, use a line-up that would include an A330 replacement programme. Your line-up portfolio would then include an A330neo or an A350-derived new aircraft programme using roughly an A330/787-sized wing instead of the 777-sized wing used on the A350.

    • Scott already wrote some time ago that ( in my interpretation ) Boeing appears to be better at grooming the appraisers.

      Appearance is (nearly) everything today.

    • If the numbers are wrong I suggest you put a correction to Wikipedia – my source and my apology. Factoring in A300-600 (313 built) and A310 (255) vs. the 1000 767’s just proves my point further.

      • [last one was supposed to link to OV’s previous comment]
        OV – you’ve lost me on your point – Airbus did try an A330 replacement – the original A350 proposal that was DOA. Then Airbus wisely chose not to directly compete with the 787 and go after the now 15 year old 777. By trying to compete using an aluminum/carbon panel vs. full carbon wound fuselage 787 at the small end and new engines and CFRP winged 777 at the high end the A350 will have some tough competition.

        BTW – Is re-engining the A320 and putting blended wing-tips (10 years after the 737) an example of Airbus’ advanced technology at work?

    • OV,

      Quote:

      “Any reasonably able analyst would, of course, use a line-up that would include an A330 replacement programme. ”

      I’m only going off what seen/read from analyst to date regarding their views about the future WB line-ups as they appear today. If you have different information or would like to share other anlysts views with me and the rest of the participants on this site, I’m sure it would be welcomed by all.

      I am under the impression that the A350 program is the replacement for the A330. Again, if you have other info? Please let us know the details. (And don’t forget to inform AB) 😉

      And there is this:

      “With all due respect, but that sounds like a very Saj Ahmad-esque thing to do.”

      That sounds alot like: With all due respect, @#$%^&- you!

      BTW, I am not offended. Its just a strange way to represent your point of view.

      Regards,

  14. And there is this:

    “With all due respect, but that sounds like a very Saj Ahmad-esque thing to do.”

    That sounds alot like: With all due respect, @#$%^&- you!

    BTW, I am not offended. Its just a strange way to represent your point of view.

    Observer, I may have been a little too subtle, but I’m still surprised that you managed to interpret what I wrote the way you did.

    The fact of the matter is that you were referring to “analysts” who supposedly “prefers” the Boeing WB line-up of 2018/2019, and that the Airbus WB product line post A350-1000 EIS will remain static.What an absurd notion.

    After the hey days of 2006/2007 when just too many analysts predicted with utmost certainty that the A330 was in its “dying moments” since the 787 would become a home run for Boeing, the concept of cautious predictions is seemingly once again becoming the norm among industry observers and analysts. Hence I haven’t really seen very many analysts “preferring” a hypothetical Boeing WB portfolio 7 years hence. Some may do, of course, but too many analysts, it seems, were burned by their rosy and uncritical predictions for the 787 and their predicted dire consequences for Airbus. One so-called “analyst” stands out though, and that’s Saj Ahmad, now with strategicaeroresearch.com. With Saj it’s difficult to know when Boeing marketing ends and “analysis” starts.

    http://www.strategicaeroresearch.com/page/3/

    So, a Saj Ahmad-esque way of doing things is bit like how Tricky Dick liked to do things; in this case by not comparing like-for-like 😉

    I am under the impression that the A350 program is the replacement for the A330. Again, if you have other info? Please let us know the details. (And don’t forget to inform AB)

    The A350-900 is a B-market aircraft (definition per Boeing) and is designed as a replacement aircraft for the A340-300 and the 777-200ER. The A350-800 is more of a C-market than a B-market aircraft. The A330-300 is an A-market aircraft while the A330-200 is a B-market aircraft. Hence the current A350 is not really a replacement aircraft for the A330. An optimised intermediate ranged A330-300 replacement aircraft, with a fuselage the same length as that of the A350-900, should have a significantly smaller wing than that of the A350, and would in all likelihood have a MTOW in the neighbourhood of 200 metric tonnes. The fact of the matter is that Boeing and Airbus have both optimised the 787 and the A350 as long ranged airliners, and there’s little doubt in my mind, at least, that there is a significant market for a state-of-the-art 250-300 seat A-market aircraft that is not just a stretch of a B-market aircraft with the same MTOW.

  15. If the numbers are wrong I suggest you put a correction to Wikipedia – my source and my apology. Factoring in A300-600 (313 built) and A310 (255) vs. the 1000 767′s just proves my point further.

    @GT62

    Wikipedia is not the absolute authority on the matter. The two OEMs are.

    For example, Airbus’ orders and deliveries data is available here:

    http://www.airbus.com/presscentre/corporate-information/orders-deliveries/

    Download the Excel file and click on the “Worldwide” sheet-tab.

    – Summary to 30th April 2012:

    ———————Orders

    A330-200————-566
    A330-200F————58
    A330-300————-575
    A340-200/300——–246
    A340-500/600——–131

    Total—————–1576

    Finally, I wasn’t “factoring” in the A306 nor the A310. What I merely pointed out was that the 767 and the A306/A310 were contemporary industrial programmes. Hence the order count for the A306/A310 should not be counted together with orders for the A330/A340, and the order count for the 767 should not be counted together with orders for the 777; that is if you want to compare the order record of contemporary OEM programmes and not just the total Widebody order count for each OEM within an arbitrary time period.

  16. OV – you’ve lost me on your point – Airbus did try an A330 replacement – the original A350 proposal that was DOA. Then Airbus wisely chose not to directly compete with the 787 and go after the now 15 year old 777. By trying to compete using an aluminum/carbon panel vs. full carbon wound fuselage 787 at the small end and new engines and CFRP winged 777 at the high end the A350 will have some tough competition.

    @GT62

    Well, Airbus has sold more than 700 A330 since the launch of the 787 in April 2004. When the first A350 design was rejected for the XWB-design, it would have been a pretty stupid decision by Airbus not to primarily go after the A343/777-200ER replacement market with the A359. But who says Airbus is not competing with the 787 and that they will not compete in the 250 seat market in the future. They have been doing that with the A330 for the last 8 years, and due, of course, to early availability and a lack of near term 787 production slots, the urgency of developing a direct A330 replacement aircraft is not there – yet!

    It’s interesting to note though that an Arbus direct A330-200 replacement aircraft and a 787-8 competitor would, in all likelhood, be built and designed with wing and engine-technologies 10 years more advanced than the wing and engine on the 787-8. Also, if engines continue to improve on average by 1 percent per year in TSFC – new engines only, no PIPs – then you could design an aircraft with the same seat count and performance as that of the 787-8 having, among other things, significantly less fuel volume in the wing (= less weight) and consequently a significantly lower fuel consumption than what is the case with the 787-8. Of course, the 787-8 could be re-engined as well with whatever new engine that is available a decade hence, but the aircraft itself would be somewhat overbuilt in order for it to compete effectively with a new same sized aircraft that would have been optimised for the latest state-of-the-art engine.

    BTW – Is re-engining the A320 and putting blended wing-tips (10 years after the 737) an example of Airbus’ advanced technology at work?

    What is it you are trying to achieve with such a “flamebait” question?

    If anything though, the neo will be an example of the advanced engine technologies of both CFM and Pratt at work. The neo itself will be just another evolutionary change, Piepenbrock-type red modular architecture.

    • I don’t see that as a ‘flambait’ question at all, OV-099. It is a legitiment question of why Airbus is sticking a new engine and winglets on the 25 year old wing (30 year old design) and then calling it ‘advanced technology’. Just because you don’t like the question doesn’t make it an invalid question.

      The A-320 isn’t even an Airbus (originally) designed airplane. The program was actually started in 1977 by British Aerospace as the “Joint European Transport” (JET), and the program was later taken over by Airbus. With Airbus the JET evolved into the “Single Aisle” (SA) program with 3 versions, the SA1, SA2, and SA3, which then became the A-319, A-320, and A-321.

      Now, about all those A-330s ‘sold’ since 2004. You do know many of them were sold/given away as compensation due to delays in the A-380 program, don’t you? That may be as many as 200-300 (or more) A-330s sold at increditable discounts (some on airliners.net speculated discounts as much as 95%).

      “When the first A350 design was rejected for the XWB-design, it would have been a pretty stupid decision by Airbus not to primarily go after the A343/777-200ER replacement market with the A359.” Lets not rewrite history here. The first A-350 design was a reengined A-330. The A-350 did not go from that design directly to the “XWB” design. There were a total of 6 designs submitted to the airlines, with the “XWB” being the final one that was accepted in numbers. The first 5 designs all retained the same fuselarge as the A-300, A-310, A-330, and A-340. Yes, the Mk.I, Mk.II, Mk. III, Mk.IV, and Mk.V all got a few orders each, but combined they were not enough to begin the program, and at the time the B-787 was running away with sales numbers.

      Airbus always knew they had a few sales already locked up with any version of the A-350. They had airlines like US in their hip pocket because they gave US the ‘loan’ to get out of their second bankruptcy in 5 years and the money to ‘merge’ with HP (America West Airlines). BTW, the union deals of that merger are still not settled, just ask the pilots.

  17. From John Croft, Flight Blogger:
    Aviation geeks, while they are always excited about the first flight of an airline’s new aircraft type, have even more reason to celebrate the 777-300ER. American will be the first US carrier to operate the type, which has enjoyed significant success abroad, and it will be the largest aircraft in its fleet since it retired its 747-100s and -200s in 1985.

    Plus, in the opinion of the author, the 777-300ER is just plain cool

  18. http://www.reuters.com/article/2012/05/25/uk-airbus-a-idUSLNE84O00J20120525

    From Reuters: Airbus A380 wing flaw undetected for a decade
    …repair costs looked set to climb towards 500 million euros
    …Airbus Chief Executive Tom Enders said the discovery inside
    the superjumbo’s wings, where new lightweight carbon-composite
    materials and traditional metal meet…
    “We found out the hard way that we didn’t know everything we should have before taking this decision.”
    Airbus will also be looking for certainty that similar problems could not crop up elsewhere.

    [GT62]: Like the aluminun cab and aft fuselage on the A350 I presume. One advantage the 787 all composite wing and fuselage has. So that works out to $2M euros/plane on order. Also Leeman says that no sales for A350 since 2008? (This really is flambait…)

  19. Pingback: 2Q US mainline carrier PRASM vs. CASM | SkyWriter Aviation

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