Date: 19 Feb 98 01:33:46 From: Chuanga@cris.com (H Andrew Chuang) Organization: Concentric Internet Services Followups: 1 2
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AE316/317 vs B717-100/200 (aka MD-95) Airbus has learned that it is very difficult to do business with China. Airbus wants to build the smaller AE316 to compete with the B717. The Chinese are interested in the bigger AE317. The other major partner, Singapore Aerospace, is frustrated and is threatening to pull out. For Boeing, losing the battle to Airbus a few years ago could actually be a blessing in disguise. The B717 offers Boeing an economical way to get into the lower end of the commercial aircraft market. As long as Boeing can keep the cost down, the B717 might be moderately successful. A320 vs B737 Since the launch of the third-generation B737, the B737 has been doing very well against the A320. There were more than 700 NG B737s ordered even before Southwest put the first B737-700 into service; this is a record for a new aircraft type. However, last year, the A320 has chalked up quite a few big orders, most notably US Airways' order of 124 A320 family aircraft, NW's order of 50 A319s, and ILFC's order of 50 A320s. This is the first time in quite a few years that the A320 has outsold the B737 (~350 vs 320). In a recent press release, Airbus compared the 350 figure against Boeing's next-generation figure of "barely 200". (I'm not sure how Airbus arrived at this number. According to Boeing's webpage, 235 B737NGs plus 85 second-generation B737s were ordered. Airbus probably excluded the smaller B737-600 with which the A319/320/321 does not compete. Then, the number was 195 which is consistent with the wording "barely".) Anyway, the A320 seems to be doing even better this year. Iberia has announced an order of 50 A320 family aircraft. United will soon sign a contract for another 50 A320s. Many have also reported an upcoming joint order of 100 aircraft by three Latin American carriers. Since the new year, Boeing only got one major B737 order by Southwest with 50+ units. Boeing cannot afford to lose British Airways' order! At the end of last year, all B737 models had a combined backlog of over 900 planes. Inferring from the Iberia press release, Airbus's A320 backlog is around 730. Boeing's planned 1998 production rate for the B737 was at 24 aircraft per month. The latest Airbus figures that I could find are 10 A320s per month at Toulouse and 8 A319/321s per month at Hamburg. If you add UA's and the Latin American orders and do some simple math, Airbus actually is in worse shape than Boeing. This will probably drive the prices for both aircraft up! A330-200 vs B767-400 As I have said so many times, the A330-200 revitalized the A330 program. At this time, the A330-200 has a small lead. Boeing needs some Asian and European customers for the -400. A340-500 vs B777-200X The A340-500 (along with the -600) was officially launched last year. Two airlines had signed letters-of-intent for the ultra-long-range Airbus plane, namely, EVA Air and Air Canada. It seems EVA Air is not a done deal, yet. Boeing is still courting the airline with a B747 alternative. Emirates may be very close to signing up for the A340-500. Both manufacturers are still vying for Singapore's order. Although, the upcoming Asian Aerospace '98 show in Singapore would be a perfect place for an announcement of such order, the financial crisis will probably hold Singapore Airlines back from making any commitment (unless..., see A340-600 vs B777-300X). Asian airlines account for a lot of B777's backlog. Thus, the current economic turmoil probably affects the B777 line more than any other Boeing's and Airbus's products. OTOH, the recent conclusion of US-Japan bilateral negotiations may have signaled a new age for the B777. Continental has already announced its intent to fly the B777 from Newark and Houston to Japan later this year. It's also no secret that American will replace its MD-11s with the B777s which will be its workhorse across the Pacific. Although, Delta does not have any immediate plan to sell the MD-11s, I think you can count on the B777 to eventually replace the MD-11 across the Pacific. Also, US Airways will soon decide between the A330 and B777. All indications are US Airways will order the B777 and Boeing will drop its lawsuit against US Airways. Furthermore, the A330 is not capable of flying between Philadelphia and Tokyo, but the A340 has never been mentioned as a candidate for US Airways. All of a sudden, there will be four airlines using the B777 across the Pacific. Perhaps, TWA may join the crowd, too (but TWA still has 10 A330s on order.) Currently, China Southern is the only carrier uses the B777 for trans-Pacific flights. A340-600 vs B777-300X With the new US-Japan bilateral, there is an incentive for American Airlines to push Boeing for the B777-300X which it will need for the Dallas-Narita and Chicago-Narita services. Furthermore, AA is also interested in secondary routes like Dallas-Hong Kong for which AA will need the B777-200X. Thus, I think the B777-200X/-300X launch will now be driven by AA and maybe DL more so than by some Asian airlines. Nevertheless, it will be a big blow for Boeing if Singapore decides to order the A340-500. Hence, if AA and DL do show strong enough interest, I won't be surprised if Boeing gives Singapore a real sweet deal to kick off the program. The A340-600 has three sizable committments from three credible airlines (Virgin, Swissair, and Lufthansa) plus a few additional smaller orders. At this time, signed firm orders stand at 19 only. To recover the US$3billion investment, Airbus must need more orders. Nonetheless, IMHO, the twin-engine B777-300/300X will eventually be one of Boeing's most successful widebody lines. The B777-200IGW leads the A340-300 by a good margin, even though the former lags the latter by about three to four years. The two-engine/four-engine argument has not been a big issue in the B777-200IGW/A340-300 competition. It will be an even lesser issue in the A340-600/B777-300X competition, because Boeing still has the B747, though not as efficient as the A340-600/B777-300X, to offer. B747 vs A3XX Quite a number of B747 derivatives have surfaced. The 30-year old B747 will never be as efficient as the A3XX on paper. However, if Boeing could steal 20-30% of a relatively small market without spending a lot of money, it could be a very unattractive business proposition for Airbus to build the A3XX.