Jan. 13, 2015: Boeing sees little impact on orders from the falling fuel prices.
In a tele-press conference this morning, Randy Tinseth, vice president of marketing, said recent history shows that even as fuel prices went down, the backlog of orders went up.
Oil is currently hovering around $46/bbl. The last time it was this low was 2008, after the global financial collapse. It took 2 1/2 years for oil prices to recover to around $100/bbl.
Tinseth noted that the Boeing 787 was launched with oil was $40/bbl and the 777-300ER at $30/bbl.
He said airlines still face aging airplanes that not only become more fuel inefficient as they age, but maintenance and other costs add to the inefficiency. These airplanes will have to be replaced.
With the backlogs out to 2020 and beyond, Tinseth said that delays of the Boeing 747-8, 787, Airbus A380 and A350 created a pent up demand for wide-body aircraft. Airlines are flying some equipment longer than they anticipated and new orders will continue to be placed despite the long backlog.
John Wojick, SVP of Global Sales and Marketing,acknowledged, however, that the long backlog kept 787 sales to 65 gross orders (41 net).
Wojick said that last year’s success in selling 63 777 Classics assures the skyline is filled through 2016. He did not comment on the production gap from 2017; Boeing’s 2014 annual financial results will be released Jan. 28, at which time some guidance may be offered by headquarters.
Wojick called the competition with Airbus “fierce,” but noted Boeing delivered more airplanes last year than Airbus and commanded two thirds of the wide-body market for the year. Boeing benefited by a surge in 777X orders, firmed up from the November 2013 launch of the airplane at the Dubai Air Show. Airbus suffered from a cancellation of 70 A350s by Emirates Airlines, resulting in a net negative 32 orders for this airplane for the year. This year should see a return to normalcy. Airbus has fairly evenly split the wide-body market with Boeing up to 2014.
The officials said Boeing continues to look at the product gap between the 737-9 and the 787-8 to determine whether there is a viable market. The A321neo, which is somewhat larger than the 737-9, is trying to fill this gap with today’s formal launch of the A321neoLR. Tinseth says Boeing is unconvinced there is a need for an airplane in this gap.