PNAA Day 1: Boeing’s view of the global market

  • Feb. 9, 2016: Today is the first of three days of conference meetings organized by PNAAthe Pacific Northwest Aerospace Alliance (PNAA), in Lynnwood (WA). We’re providing live reporting throughout the three days.

Randy Tinseth, VP-Marketing for Boeing, said forecasts predict oil as low as $7/bbl and as high as $80/bbl–as always, “giving themselves a lot of leeway.”

Asia remains the top growth market, adding 100m passengers every year (the size of Atlanta’s international airport, the world’s busiest, which served 100m passengers lasgt year.

The cargo market has been challenged over the last six years, and it comes and goes, but it will come back when trade comes back, Tinseth said.

  • Tinseth compared the 787-10 with the A330-900 to show a claimed 165nm range advantage–but the A350-900 (new generation-to-new generation) was omitted. The A350-900 has a much longer range than the 787-10. (Updated to correct the A330-800 to the A330-900.)

The single-aisle market represents 70% of the market and half the value, including Airbus and all other competitors.

“We as an industry and we as a company have to focus on doing the right things…and build at the right cost” to be successful, Tinseth said.

He said that given the total forecast of 35,000 airplanes from regional jet to Very Large Aircraft, there is a need for 60% of the sales still to be made.

Tinseth said the company will deliver fewer 737s this year because the supply chain can’t keep up as the transition between the NG and MAX takes place.

Update: This email was received later from Boeing’s Corporate Communications department:

I wanted to touch base on this bullet in your coverage of Randy’s PNAA presentation.

After talking to Randy, I believe his response was lost in translation.

He was making the point that the transition to MAX is the reason we’ll deliver fewer 737s—because we’re producing several MAX airplanes this year that won’t deliver until 2017.

On a follow up question about separate production lines, he was simply making the point that the NG and MAX share a common supply chain.

So the supply chain is delivering precisely to our 42 per month rate. We’re producing 42 per month, but won’t be able to deliver to that rate this year due to MAX certification.

His point was the opposite of “can’t keep up.” Our suppliers are doing exactly what we need them to do. We can’t expect  them to deliver at a rate higher than 42 right now just so we can build more NGs to make up for the MAXs that won’t deliver this year. And of course, that would go against our own rate hike schedule.

China’s market has slowed,  but the government is restructuring the economy but “we see robust, double-digit growth” for the future, he said.

Despite the fluctuation of oil prices, “we haven’t seen a change in the replacement pattern,” Tinseth said. Aircraft reach maintenance requirements, interior upgrades and certain ages that simply need replacement.



27 Comments on “PNAA Day 1: Boeing’s view of the global market

  1. Funny that response of Boeing about delivering fewer 737s this year due to MAX production.

    Airbus delivered 490 A320s in 2014 and 491 A320s in 2015. This despite having quite a few neos built for flight test as well as a growing number in the delivery process.

  2. Would it be possible for Boeing to increase the MTOW of the 787-10 to exploit the full tank? If its OEW grow the same from the -9 as from the -8, it should be 132t + 33t pax = 165t ZFW + 101 max fuel = 266t TOW, a 12t increase from its current 254t MTOW (the same increase as the A330 from 230 to 242t).

    With this 5% MTOW increase, its TO performance should be comparable with the -9 with its 6% Thrust increase.

    12t of fuel should enable a ~1000nm+ range increase to 7400nm, to better compete with a A350-900, wich itself grew from 268t (7600nm) to 280t (8600nm?).

  3. Hello Scott
    I guess the comparison was between the 787-10 and the A330-900 ?

    Best regards

    • @Crise: While Boeing was quick to react to the 737 production reference, it did not react to the A330-800/787-10 reference. Even if intended to be compared with the A339, this is still sophistry: The A350-900 and the 787-10 are the apples-to-apples, new generation competitors and the -900 has more range than the -10.
      @John: The slide illustration was not about economy, but range.

      Update: Boeing this morning did reach out to say the comparison is with the A330-900, and the post has been updated accordingly. However, Boeing nevertheless continues to omit the A359, against which the 787-10 was designed to compete.

      • Not to defend Tinsith or Boeing but should not the comparisons of the aircraft we who is buying it and what market they are going to use it in?

        Going to totally silly would be to compare the 787 to an F35. Both latest generation aircraft but totally different purposes.

        That dog only goes so far, but is the 787-10 intended to compete with the A350-900 or is it that coverage of a higher density shorter routes which makes more sense (at least to me).

        That seems to be more in the A330NEO territory.

        • And to add a bit. Japan had at one time special 747 domestic, it was not intended nor could compete on long range international.

          Purely build and setup to shorter local haul in high volume.

          Japan is using the 787 in high density for that. Maybe the only ones but it is an example, Airbus called their version the A330 regional.

        • What Boeing’s Tinseth won’t do when comparing the 787-10 to the A350-900 is talk about the numbers that matter. The Airbus A350-900 has lower wing-loading and a higher thrust-to-weight ration than the 787-10: so the A350-900 would definetely have the Energy-Maneuverability advantage in a dogfight.

          (hey…if Randy can compare Apples to Oranges, then I have the right to speculate about how Oranges taste like Beefsteak)

          • He!
            But in a 787-10 the pilot would have “full control”(TM) to trash the plane. That must be worth something 🙂

          • Yeah trusting pilots to fly the plane is a giant weakness of Boeing aircraft!

  4. “◾Tinseth compared the 787-10 with the A330-800 to show a claimed 165nm range advantage”

    I often wonder if these marketing guys value their public low presenting them these apples to oranges in terms of capacity & range.

    • IMHO retention on the recipient side does not go beyond “Advantage : Boeing”.

      there are so many news articles around that make some “rich” (but nonfactual) statement in the headline and never ever reference that in the body.
      Ask readers what facts they remember.
      Facts are nothing but distraction 🙂

    • to be fair, Airbus is making the same comparison between the 330-800 and the 787-10 but their slide talks about cost.

  5. The 787-10 only competes with the 359 in pax count.
    Look at the weights and installed thrust, and it becomes
    obvious that if you don’t need the range the 787-10 is going to be a more economical aircraft.

  6. I would not be suprised to see incoming retirements / Sr management changes at Boeing. There are a few people that seem to live in Lalaland 🙂

  7. Re China, if the Chinese economy converts to a normal consumer economy, even with a lot less growth, consumer economies give back more to the consumer who then spends more, esp in services, so slower Asian growth won’t effect aircraft orders, it might even help them.

    Half the oil industry+Russia about to go broke, anybody who thinks oil will be cheap in 1-2 years time is dreaming.

    • I don’t see the relevancy of that.

      US is throttling back but Saudi and OPEC countries are increasing volumes of oil (local paper so I don’t have the reference)

      Its going to find a balance but 1-2 years of very low oil prices is realistic.

      As oil goes up more will come back on line keeping it from spiking.

      Now the speculators (gamblers) are out of the market it has “rationalized” That should never be allowed to occur, its not only gambling its gambling with th4e world economies taking the stake to the heart.

      Per the old rules, if you could not store it, you could not buy it.

      The commodities market can serve a purpose but that went out the window with the speculation de-regulation. Variation on the Prime Mortgage debacle, we know who paid for that.

      Sorry for the rant but if someone does not call the king naked then the lies go on and on.

      • Nothing wrong with the rant, but as you point out these prices will not last 2-5 years, but most orders are delivered after a five/ year lead, more or less.

        Oil prices are being driven by 3 governments, but Iran needs investment to make its dreams come true, not likely just now, Iraq is ISIS oil, anybody going to invest there? Maybe somebody will bomb the wells with something which will collapse them, (Russia? has a motive)that would take a million barrels off the market, and the Saudis will squeeze the market as soon as the opportunity presents itself.

        A lot of producers won’t last so long.

  8. What is interesting is the latest figures out on the 737-9 vs A321NEO.

    17% of sales to the -9, while I am not a big fan of sales short term, longer term they do have impact and meaning. In this case its a huge clear cut case.

    While the -9 allows -8 customers to moved up as the markets get seat size bigger, it only allows on move and not even into A321 territory.

    Operators looking at long term future (or current need and future need) would have to go with the A321 plane (pun) and simple.

    That’s either a split fleet or a move to all Airbus.

    Regardless its a huge gap and I think Boeing will have to do something about it much sooner than they want.

    Curious, are the P-8s being included in the production and deliveries? That skews things for Boeing and I continue to lean to aircraft destined for military should have their own sub category.

    It really skews the commercial picture (767s when they get rolling), P8 and the A330MRT versions.

    • P8’s, A330MRT’s, and 767 Tankers are included because they’re built on passenger platforms,hence why the F-22 nor the Tornado are included.

    • I’m afraid the 737-9 situation is even weaker then assumed. Half the orderbook are for United, who might have second thoughts. Lionair seems to have withdrawn after being presented as launch customer, switching to -8s. Air Canada has very strong financial dependency on Boeing and little choice. The A321NEO has 35 customers and A321 CEO’s are rolling off the lines at 15-20 a month as we speak. Boeing is looking at bigger engines, wings, landing gear for a reason. UA could become launch customer for something.

      • The max needs more than a bigger wing and engine and taller landing gear to make a good 321/future 322 competitor. It needs a bigger diameter fuselage (a little bigger than 320 series!) for less crowding and shoulder bumping and a nose/windscreen that doesn’t look look so 1950s. Boeing needs a new single aisle ASAP. All IMHO.

        • You have just described the Irkut MC-21 ( or Yak 242)

          Bigger fuselage than A320- check (+11cm!)
          More wing sweep, higher speed on long range -check
          Better overall wing design does away with tip devices -check
          more wing area on stretched versions-check
          more fuel capacity than A320 -check
          out of autoclave wing box curing- check
          geared turbo fan under wing – check

          Boeings new improved plane !

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