Aviation, like all business, must evolve over time in response to changes in the marketplace. Understanding customers is critical to long term success. In the commercial aircraft sector, that comprehension may even extend beyond the buyers of airplanes to the buyers of the seats. The collective message of the below linked articles suggests that Boeing, which reaches the grand age of 100 in 2016, has great insight into what service the airlines’ customers and customer airlines really need.
The folks in Renton, WA and now Chicago, IL come to this attention to the market from a lesson learned in the 1970’s. It offered the B-707, which it believed was a superior design, but their then rival (now merged) Mc Donnell Douglas’ DC-8 was a favored product. What the Boeing Company learned in retrospect was that the Long Beach marketers recognized that the sale of their plane would benefit from favorable financing. Thereafter, good interest rates become part of the Boeing pitch. More significantly, trips from Seattle to the home offices of the world’s major airlines increased and the BCAC representatives become better “listeners.”
Whether the B-747 development benefitted from the company’s work on military contracts is a subject to be researched in the evidence files found in several trade courts. True or not, that behemoth became the plane of choice for many airlines to fly their passengers from hub to hub, efficiently, comfortably and safely.
The strategic planners of Bill Boeing’s establishment analyzed traffic flows, airport hub inefficiencies and what those numbers suggested where the future will move. As the author of the Sun Setting article phrased it:
“A shift toward newer and more efficient aircraft that can land at smaller (and so more) airports and a tendency to use former passenger planes for freight has reduced Boeing’s remaining 747 order book to just 20, after building more than 1,500 since 1969.”
Instead of building a new, improved four engine behemoth, Boeing decided to invest in the B-757, the B-767, the B-777 and the B-787.
They are designed to fly point-to-point around the congested hubs and efficiently match the consumer demand with a plane of the right capacity. All of these birds fly quieter, with lower fuel burn and lower cost per seat. This design target was flights from Nashville to Edinburgh, not Atlanta to London Heathrow.
With that array of products, Boeing was able to create another revision (B-747-800) to iconic B-747 and not to pursue the development of a new bigger aircraft.
At the same time Boeing opted to “double down,” the folks in Toulouse charged off to kill the hated B-747 with its double decker A-380. It added seats (total 853) and range while lowering the cost per seat (a blessing if 100% occupancy, a curse as the load factor decreases). To construct its mega airplane, the governments supporting Airbus had to find massive financing (about €15bn, £11.4bn, $16.4bn) for the A-380. The author of the White Elephant article accurately describes the double-decker plane’s current plight:
“While Airbus may produce A380s this year which cost the same to sell them, the programme sports the worst financial balance in aviation history. Airbus has been selling this thing since 2000 to customers with delirious discounts to secure orders,” he said. “That sort of discipline is never going to make the A380 break even on a total programme cost basis, let alone ever be profitable.” Others say that the A380 programme might break even once Airbus has sold round 450 jets.
But Mr Ahmad says that may never happen: “It’s already looking technologically obsolete versus Boeing’s 787 and 777X jets and even Airbus’s own A350XWB.” Mr. Bregier had no choice but to speak up for the A380 – not doing so would spook investors and airlines even more.
Mr. Ahmad also questioned the rationale behind Airbus’s argument that congested airports will be driving demand for very large aircraft.
“John Leahy can tell us that congestion can only be solved with bigger jets, but look at the statistics for busy airports and you will see that over the past 30 years, average seat count per airplane has been falling.
This is because smaller jets take less time to turn around and get back in the air versus the A380 which actually adds to congestion on the ground and in the air due to wake vortices which have to clear before other aircraft can fly behind it.
In a way, the A380 is a self-defeating airplane that creates a problem that Airbus claimed it was built to solve,” he said. “If the A380 was the right solution to airport congestion, then why did Airbus bother launching the [smaller] A350?”
Perhaps being an instrument of European pride affected Airbus’ commercial judgment.
The Boeing Company has turned retrospectively and further upgraded its beloved “Guppy” to the B-737 Max. Its comparative points are as follows:
- 737 MAX Efficiency delivers 8% lower operating costs than its main competitor.
- The new 737 MAX Advanced Technology winglet increases fuel efficiency by 1.8%. More
- 737 MAX Reliability – the benefit of 99.7% dispatch reliability is that an airline with a fleet of 100 737 MAXs will avoid delaying over 65,000 passengers. More
- 737 MAX Passenger Appeal is found in the new Boeing Sky Interior, which dramatically elevates the passenger experience. More
- Better environmental performance. The superior fuel efficiency of the 737 MAX reduces carbon emissions. The quieter 737 MAX has a 40% smaller noise footprint than today’s single-aisle airplanes.
Those numbers all point to the future.
The last article tells the story of Boeing’s support of an effort to preserve the past and share that uniquely American story. This effort is one of Boeing’s ways of celebrating its 100th anniversary. The program “The Age of Aerospace” will be shown on the Science Channel and the Discovery Channel. Remembering of its past has contributed to its bright future.