Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Bjorn’s Corner: New engine development. Part 4. Propulsive efficiency April 19, 2024
- Boeing unlikely to meet FAA’s 90-day deadline for new safety program April 18, 2024
- Focus on quality not slowing innovation, says GKN April 18, 2024
- Boeing defends 787, 777 against whistleblower charges April 17, 2024
- Dissecting Boeing CEO’s statement next new airplane will cost $50bn April 15, 2024
Boeing’s a revisionist, Airbus isn’t, says product head
June 21, 2017, © Leeham Co.: Boeing, after years of struggling sales, finally dropped the iconic 747 passenger airplane from its 20-year forecast, revealed publicly yesterday at the Paris Air Show.
Boeing in fact eliminated the entire Very Large Aircraft sector (400 passengers and up) from its forecast, the Current Market Outlook.
The forecast for the 747-8F now is part of a new category, Freighters, which encompasses all sizes. Boeing projects a need for 920 freighters in the next 20 years.
Rival Airbus continues to forecast a need for 1,400 VLAs in its Global Market Forecast.
Boeing and the A380
Randy Tinseth, VP Marketing for Boeing, acknowledged the 747-8I passenger model is done, probably with Air Force One, the US presidential airplane. The US Air Force plans to acquire two or three 747-8s for the fleet, replacing the two 747-200s in use since the Bush 41 term (1988-1992).
Tinseth also predicted Airbus will be ending production of the 747’s rival, the A380, adding that he doesn’t
Robert Lange of Airbus. Source: LinkedIn.
believe the A380 backlog will be delivered because of the weak nature of the customers.
After Airbus acknowledged at the IATA AGM June 6-7 that a production rate cut for the A380 to fewer than 1/mo is actively under consideration, LNC published this assessment of the strength of the customer quality.
Emirates Airline, the largest customer for the airplane, is assessed as Yellow (Caution) because of dramatically falling profits this year, previous deferrals of the A380 and of Boeing’s 777X, over-capacity in the Middle East, terrorism in Europe and the Middle East and the US-imposed laptop travel ban.
The future of the A380 is directly tied to Emirates.
Market demand
Tinseth said yesterday that Airbus’s market forecasting, the Global Market Forecast (GMF), was dramatically wrong on demand for the VLA market. The A380 always illustrates this sector for Airbus, just as the 747 illustrated the sector for Boeing. The sector is defined as 400 seats and up.
Airbus, predictably, pushed back at Tinseth’s presentation.
Bob Lange, SVP, Head of Market and Product Strategy, said in an interview with LNC that Boeing’s graphic represents “revisionist history.”
Differing definitions
Airbus and Boeing defined the seating categories differently in 1997, Lange said. But the big difference, Lange says, is that Airbus includes any aircraft configured to maximum capacity (as opposed to the standard two- or three-class seating most commonly used) if this maximum is more than 400 seats. The A380 isn’t the only aircraft that falls into this sector, he said.
This is entirely new public information.*
What this means—and the specific example cited by Lange—is that Cebu Pacific’s A330-300s delivered with more than 400 seats, or an A350-1000 that might be, applies against the VLA figure Airbus produced in the GMF every year since 2000.
By this standard, the 459-seat Boeing 777-300ERs used by Air Canada would fall within Airbus’ VLA demand forecast.
It’s not just about the A380, Lange said, but the broader market.
If this seems like revisionist history, Lange says it isn’t—Airbus just kept this definition internally. Using a rendering of the A380 for the VLA sector was simply showing the company’s flagship, he said.
Redefining categories
Lest one think that Airbus is alone in redefining categories, Boeing never put the 407-419-seat 777-9 into the VLA, but rather into the Large Twin category. The prospective 450-seat 777-10 would also be within the Large Twin category under Boeing’s new definition.
Where Airbus, Boeing missed
Lange admitted that Airbus did miss one sector in its forecasting, but he said Boeing did, too: both companies under-forecast single-aisle demand.
“In 1997, Ryanair had eight lease airplanes,” he said. “Everybody missed the LCC phenomenon.”
*In covering Airbus for decades, this is the first time this writer has ever heard this explanation, despite inquiries and conversations with Airbus officials even within the last few years.
Airbus have always had neutral size categories that are not allocated to specific aircraft types but rather seat counts. It is written often in their GMF booklets and thought it was quite clear myself!!!
Regardless of what definitions the manufacturers have for “VLA”, at the end of the day, money (orders) talks and the order book for both the B748 and A380 are practically non-existent and heading basically towards————>0!
Its a shame, but it is what it is.
That’s a revisionist history right there. While the 747 is basically dead with only a few freighters left to deliver the A380 still has tens of planes to deliver which translates to years of production.
Tens of planes? Ha! The future is bright!
Many chuckles at this historical analysis from Airbus here on this site. I seem to recall many a piece a couple years ago from ferpe/Scott about how the 779 here was not actually a VLA/400 seater at all, as it would never be configured as such, and ipso facto was not an A380 competitor.
Now, however, Airbus themselves declare the 77W and A330 even as VLA and everyone should just realize that’s what they meant all along. One doesn’t even need to dig (and I won’t work to do so) to verify the fallacy in this assertion. It’s prima facia BS.
Is that any more revisionist than NOT putting Boeings 410 and possible 450 seater in the VLA category ?
As well Boeing has played ‘day trader’ with its forecasts before, making big changes to the numbers to suit other objectives.
Tell us how many years it took to add 2 rows to the Max 9 again, was the forecast saying nothing happening there?
I think actually you would need to dig. Clearly the airframers had, and still need, to have break points in defining market spaces. Back at the gestation stage of the A380 the 744 was running just over 400 as standard, wasn’t it? So, given that (I’m guessing) the break would have been defined to closest 50 seats, 400 would make more sense than 350 or 450 or any other century/half century pax count. Plus the idea of cramming people in sardine like back then (ie any consideration that a 330 could ever be considered VLA) would, I suspect, have garnered way more laughs than it would have garnered believers.
Would be interesting to see how Airbus’ forecasts have matched up on a 400 pax break point.
400 is just an arbitrary number. I just don’t think that a packed to the gill 7779 is really a good choice to group with the 747 and 380. If the 777-10X comes to fruition then that would be a different case.
Ive been saying for years that Airbus got the 400+ forecast right, just not what aircraft would carry that many. I suspect if you added all the aircraft configured to400+ seats I would be born out
yes, because a grand total of 20-30 sardine configuration 777s and 330s that certain airlines are using as point solutions in unusual markets adds up to 1700 VLAs in the 2000-2020 time frame (the basis of Airbus’s original business case) or even their current 1200 estimate. what are we at, actual 400+ seat aircraft in service in that time? I think <400 total airframes. what's on the current order book for the next 5-7 years? about 100 if you include the portion of 777s that might get the sardine treatment
You have just describes the future if medían wages don’t rise. NBs are the cheaperest form of travel right now, hence their popularity, generaly the problem here is everything changes if the world económic situación changes. If medían wages go up, roomier seating, less narrowbodies and more trains. Too many non travel relates variables here. Medían wages go down anymore, depression, no orders for much of anything. The last is looking more likely.
Talk about revisionist history!.
Etu Brutai!
This is very interesting and, I think (without looking more closely at the past 20 years’ history), probably consistent. Perhaps most interesting is the timing: I wonder if the VLA revelation suggests to the more cynical industry observer that the official most obviously associated with recent Airbus forecasting might become less so associated in coming days? Just a thought…
Interesting view from 14 years ago at the Paris air show from a HYT article…
“If Boeing’s market forecast is accurate, then Airbus has already booked orders for 40 percent of the number of A380’s that Boeing thought it could sell in 20 years. Mr. Leahy of Airbus scoffed at Boeing’s pessimistic forecasts. But when asked to give Airbus’s own 20-year prediction, he demurred, and said instead that there would be demand for more than 1,500 planes of 400 seats or more ”
http://www.nytimes.com/2003/06/19/business/airbus-hopes-orders-prove-boeing-wrong-about-big-jet.html
From 2004…
“Leahy also believes production of the Boeing 747 will end within a couple of years in the face of competition from the Airbus A380, and he questions the economy claims made by Boeing for its new 7E7 Dreamliner.’
“At the large end of the aircraft range, Leahy says he expects the end of Boeing 747 production as the Airbus A380 ultra-large aircraft comes into service.”
“By 2006, as we enter service (with the A380), the 747, at least in the passenger form, will be out of production,” he says”
“Leahy dismisses the recently-launched Boeing 7E7 as “Boeing re-inventing the A330-200”. He says that, apart from the engines, the aircraft “looks very similar” to the Airbus A330. He dismissed Boeing’s claims on the efficiency of the 7E7.”
Traffic volume is going to double in the next 15 yrs..Seems like it’s been at least that long Mr.Leahy has been touting that..
Is that the legacy you’ll leave behind when the doors finally close behind you..
I hv just 2 simple & basic questions for each manufacturer re their VLA mkt segment forecasts which they’ve been publishing for over a decade:
Boeing:
As VLA is defined as 400+seats, why the hell 779 has never been accounted for in their VLA category forecast(And now removed this category completely)?
Airbus:
If max seat density config for any type has always been included to account for their VLA category forecast, what was the purpose of not disclosing such definition to the public all along but reveal it to the public only until now?
Has not Geo just told us: ” 14 years ago at the Paris air show … Mr. Leahy of Airbus … said … that there would be demand for more than 1,500 planes of 400 seats or more”? We just didn’t recognise that was his definition, but we all should go back and check the GMFs (which should read from cover to cover, of course…).
Maybe Airbus is embarrassed by its own VLA forecast and so has resorted to Clintonian word parsing . . . “depends what the definition of is is”
“…If this seems like revisionist history, Lange says it isn’t—Airbus just kept this definition internally. Using a rendering of the A380 for the VLA sector was simply showing the company’s flagship, he said.”
Could’t hold a laugh!!😂
This is a good example of a good revision of the revisionism by a revisionist!
I wonder , why Boeing does not consider introducing B747-8 combi. this approach was used before and I think it can be utilized at this time to safe the production of B747-8 line.
@rsal:
I recall coming across a few articles yrs ago talking about the increasing tough cert requirements for any new combi designs(grand-fathered ones certified decades ago such as 74Ms are ok mainly because they’re no longer in production).
The most difficult tech issue is how to contain explosion/fire(accidental or terrorist-plotted events) in the cargo compartment on the main deck so it won’t affect the pax compartment. Basically, the separation wall/partition would need to be built almost as strong+heavy as a bank vault….
In contrast, it’s relatively easier/lighter to reinforce existing main deck to enhance fire/explosion containment within the lower/belly cargo compartment as the main deck is already part of the overall force-bearing fuselage structure….a partition wall between pax and cargo on the maindeck never was.
From GMF 2000
The GMF is a pure
forecast of demand
It projects demand for aircraft and
seats in a total of 14 “neutral” seating
and four “neutral” cargo capacity
categories. These may be thought of
as “buckets” of seats (or tonnes of
lift).
Fascinating stuff. I guess Airbus and Lange can take consolation in the fact that although the company lost billions on the A380 program, the Marketing department correctly called the rise in niche carriers operating super high density medium size widebody aircraft.
Those scummy running dog Boeing Capitialsit have engaged in revisonis history. Off to the Gulag with them.
Of course revisonsiit is as revisoned does and who is pointing the finger has all to do with who is in control (sadly for Mr. Lange, he is not in charge, we get to make fun of him)
So, ALL NEW CATGORY: Guess what folk, we forecast that based on a Stuffed A330, all that stuff about A380, just kidding. Wink wink nod nod.
Now keep in mind, if we sell just TWO A320s stuffed to the gills, that’s also a VLA.
So for every two A320s, we claim a VLA as well.
3 x A320 and we are talking about an A380-900 by god (ooops, have to check with the Party Ideologist, can we mention god?)
I wonder if UK, France, German and Spanish governments know about this internal memo?
Didn’t they put up quite a few billions based on an A380 VLA?
Not to worry, we don’t have to pay it back anyway.