Re: Boeing craziness (was Re: 767-400 "a different type"?)

Date:         19 Aug 98 16:01:22 
From: (H Andrew Chuang)
Organization: Concentric Internet Services
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In article <airliners.1998.1266@ohare.Chicago.COM>,
Karl Swartz <kls@ohare.Chicago.COM> wrote:
>>There is a difference between experimentation and indecision. In the case of
>>Boeing, they have changed their "official" long term 777 strategy a number
>>of times without attracting any new customers.
>If they come up with something and their customers say "no, it's not
>quite what we want," Boeing is not supposed to go back to the drawing
>boards?  As for changing strategies, they first changed because the
>engine manufacturers were improving the engines faster than anyone had
>expected, and most airlines were saying the 777-100 was too small and
>would be too expensive per ASM to operate.  Then the airlines kept
>asking for more range, and finally Singapore said "sure, we'll take it
>if you guarantee that it will have 180-minute ETOPS OOTB and we can
>cancel the order right up until delivery time if that doesn't happen."
>Picking a strategy and sticking to it come hell or high drifts is stupid
>if you're operating in a highly dynamic market.

IMHO, Boeing has not really changed any of its long-term 777 strategy.
The B777 program actually proceeded faster than the original plan.  This
forced Airbus to react with an expensive (US$3b) solution (i.e., the
re-winged A340-500/600) which, in turn, put a lot of pressure on the
777 program.  Let me explain a little bit more:

The original Boeing plan (I have a 1994 chart in front of me) was to
certify the A-market plane by May of 1995 (which Boeing had successfully
achieved).  Then, the B-market plane with a range of 6,000 nm would be
certified in Dec, 96.  The B-plus-market plane with a range of 7,400 nm
was planned with no date, and the C-market plane with a range of 8,700 nm
(and the equivalent stretched version would have a range of 6,700 nm)
was indicated as a possible future growth.  Obviously, the B777 development
was much better than expected that Boeing skipped the B-market and jumped
to the B-plus-market B777 directly and renamed it IGW (increased gross
weight) which has since been renamed again to ER (extended range).

With the early success, Boeing began studies on the C-market plane (i.e.,
B777-200X/300X).  Airbus' decision to launch the A340-8000 (i.e., a
shortened A340-300E or an A340-200 on steroid) resulted in Boeing's
proposal of a shortened B777 which Boeing heavily promoted in Asian media.
(I don't believe the shortened B777 was in any of the original B777 plans.)
Neither Boeing nor Airbus was able to get enough interest, and both went
back to the drawing board.  At that time, the B777 with a larger wing
was way ahead of the weight-, wing-, and engine-limited A340.

Well, Airbus decided to dish out US$3b to compete with the B777X.  Engine
companies are reluctant to develop 102k-lb thrust engines.  (IIRC, Boeing
originally anticipated engines of up to 115k-lb thrust for the C-market
variant.  At 102k, I believe the plane will be "under-powered."  That's
probably why Boeing is considering using an APU to boost take-off
performance.)  All of a sudden, Boeing's two-year advantage disappeared.

Much of the early marketing success of the B777 was due to the
availability of three engine suppliers.  Boeing was able to sell the
B777 with an attractive pricing due to engine suppliers' concessions.
Arguably, the B777 is a money loser for all the three engine companies.
IMHO, that's why all three companies are reluctant to commit themselves
to another blood bath.

>>They actually put the A340-8000 up for sale (and got a whopping 2 orders).
>What exactly were the terms of those "orders?"  Airbus is well known for
>playing fast and loose with terminology when it comes to counting orders.

The Brunei Sultan ordered one or two A340-8000s.  Air Canada was the
only airline operator that had signed an MoU for the A340-8000.  However,
AC had later withdrawn the commitment but ordered the A340-500 and -600