Line 1437 (RC573) is about to take a flight to Morocco. After recently getting the Seattle Seahawks livery scrubbed, could she have found a customer? Royal Air Morocco? They do have cargo operations, and currently have a 747-400 passenger frame in service (CN-RGA, line 956).
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It says there that EK wants to buy 747-8i.
ReplyDeletehttp://mobile.bloomberg.com/news/201...as-alternative-to-airbus-a380.html
Eh, it isn't so much that EK wants it so much as Boeing is actively trying to sell it to them again. Here is another article:
ReplyDeletehttp://www.businessweek.com/news/2014-06-01/boeing-peddles-747-8-to-emirates-as-alternative-to-airbus-a380
All that happened yesterday, and today, Tim Clark confirmed that Boeing is actively trying to sell the 747-8 to him, but that they are not currently interested.
In another report, he also goes on to detail the following:
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Boeing and General Electric have worked hard to improve the 747-8I’s performance, “it won’t do the job that a 500-seater A380 will do. That’s not to say that if you wanted a smaller capacity, that you wouldn’t use a 747-8I, but the 777X is coming along and that’s got brilliant economics, two engines etc,”
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So, overall, it looks like the EK items are simply talking points for Boeing as they go through their sales campaigns. However, both of those articles do point to renewed interest in the 747-8 and that they are trying to push sales and maintain the production rate at 1.5 a month.
From the Businessweek article:
"Emirates’ possible interest come as Boeing sees renewed interest in the 747-8" and "“We’re talking to anybody who has the size and capacity requirement, and obviously Tim is someone” who fits into that category, said Wojick, referring to Tim Clark".
Read both articles and felt the same as you.
DeleteCEO of Emirates said he's not interested in 748 as well in an article of possible a380neo... not even using 748 as a negotiating ploy with airbus
Delete"Emirates is not interested in Boeing's 467-seat 747-8, Clark said, despite a report of talks between Boeing and the airline."
http://uk.reuters.com/article/2014/06/02/us-airlines-iata-emirates-idUKKBN0ED0N520140602
Concur, but it also says that Boeing are pitching it to other Airlines.
DeleteIf anything EK will be part of that list of Airlines whether they will buy or not. Also whatever actually happens, it would be irresponsible if they did not do it, because the line is dwindling and Sales is the only thing that will prop it back up. There is nothing wrong with revisiting old sales leads, even if they don't buy, because that is their job to do it.
Sure Boeing should pursue every possible sales lead, like any busines, but EK has made their intentions pretty clear. You can't force a product on someone who doesn't want it, especially when it costs $160m. Of course, with a lot of new airline entrants in the market now not tied to any manufacturer, there are plenty of leads to pursue. Also, these new entrants are looking for a cheap deal on larger aircraft with low/no money down -- thanks to Ex/im financing, these aircraft purchase decisions can be as much economic as political ones. Also, besides the Presidential aircraft replacement, 748 is also a contender for 4 doomsday aircraft platforms as well
Deletehttp://www.bostonglobe.com/business/2014/06/03/boeing-facing-air-force-one-swan-song-jumbo-jet-era-ends/p2X2zq5fUdfrEMm2mimytI/story.html
I believe you'll soon hear that Boeing is reducing 748 production rates from 18/yr down to 15 or 12 per year so as to extend the life of the 748 line, maybe this year. This will allow time for existing markets to come back (passenger, cargo) as economy improves and/or fuel prices drop. Cargo will be under pressure for a while due to weak economy, increased passenger flights with bigger bellies of cargo, and reduced volume per unit of electronics (iphones rather than imacs, etc.) at least until the next big consumer product hits. Other cargo modes like rail and shipping are getting more efficient too. I think Boeing should also spend more effort targeting applications that take advantage of the unique cargo capabilities of 748 in volume and swing-out nose -- e.g., perhaps carrying very large/heavy tanks in the military market, or carrying spacecraft like those by Elon Musk to altitude prior to launch, etc. Even if you only make a handful of sales, that will extend the production line and maintain the high profile of the 748
Quite possible. Their delivery rate for the year is already less than one a month.
DeleteI would not speculate on their motives For Going back to EK. Whichever way around the story is, those talks did happen and if I were a sales person, what would matter would be the relationship between the sales team and EK. EK was on board to take the freighter trhrough DAE before the deal was cancelled, so if that is the case, perhaps its not the Pax model that is being pushed. Whatever the outcome of the talks, the notion that there is no requirement for either the 8I or 8F in EK's fleet is entirely untrue, only that EK has alternatives to use, and no longer needs the solution that is being proposed. Also you have to remember that EK's growth in the last 10 years has been phenomenal, so it is natural for any sales team to want to push their product to be part of it.
DeleteTo be clear, Emirates did not just deny interest in the 748 -- they specifically denied that any talks of 748 were even going on. Here's a link to an article that states exactly those words:
Delete"Emirates (EK, Dubai Int'l) has rejected online media reports that it is in early talks with Boeing (BOE, Chicago O'Hare) concerning a possible order for the manufacturer's slow-selling B747-8. "
In the same article, Tim Clark goes on to say:
"If they don’t produce it [A380neo] we will take it under the old version. There is nothing out there that resembles what the A380 can do," Clark said. “There’s a distinct possibility that the A380neo, if built, would give us an improvement in economics of up to 10-12% so that is definitely worth having. And I’m hoping to move on that fairly soon.”
That was the basis of my statement that Emirates made their intentions clear. Sure sales relationships are part of any sale, but economic need dominates. My neighbor is a very nice guy and we have a great neighborly relationship, but I have no interest in buying his life insurance despite our relationship. 777x sales and a380/neo are emirates future, not 748
Personally, I think Boeing is worried about an a380neo being not only a death knell to the 748, but also potentially impinging on 777x sales, and by inserting this rumor of talks on 748, they hope to get Airbus to hesitate on a380neo or to offer a380neo cheaper than they might otherwise.
http://www.ch-aviation.com/portal/news/28504-emirates-rejects-reports-of-talks-with-boeing-over-b747-8-order
Yeah, last week, literally the day after the initial reports, it became apparent that it was simply Boeing going through their normal sales process and trying to use it in terms for some noise in the market space.
DeleteIn a FlightGlobal report from June 2, the one in fact that I quote Tim Clark from in my original post above, it states the following:
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The Dubai carrier’s president Tim Clark says he is not in talks about an order for Boeing’s largest aircraft but admits that “Boeing is quite keen to discuss it with us”.
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So, while the Emirates element is perhaps just a pipe dream, I feel that the important element here is that these reports state that there is renewed interest in the airframe and that they are trying to sell it actively to airlines that they feel could use the frame, even if that sale seems unlikely.
On a slightly related note, rumors today have stated that China Airlines is going to announce a widebody order, and that they have not ruled out ordering the 747-8i. They will also be considering the 777X and the 350-1000. Another interesting point to the rumors is that they say that the company’s officials desire the largest & smallest members of the CI fleet to be Boeing aircraft. Historically, that has been the 737 and the 747 for them.
Oh come on now Vaibhav, you don't seriously think that I believe that there are talks going on now do you? Go back and re-read my post again. You have missed my point entirely. In fact , your own link describes serious negotiations, which was what was denied as having occurred. This is a far cry from a Sales Team doing housecleaning chores. Yes the answer is no, but formally they have to re-propose to demonstrate that they have done their homework, because they are pursuing EVERY possible lead.
DeleteNo, there are no discussions, at all going on, and That is what everybody here agrees.
As for your comment on using the 748 as a stick to poke Airbus, I believe that tactic is very commonplace in sales, but if the A380 is as wonderful as TC proclaims, there is no need for him to do this, as he holds all the cards. Surely if Airbus believes that there is a serious advantages to be gained by using Trent XWB's then Airbus would pursue it, but lets not confuse the fact they need customers to commit to that and make a program out of the NEO if that is Really what Airbus wants. As for ROI on such a program will EK's interest be sufficient to cover the R&D costs, not just Airbuses but Rolls's as well and have the a/c certified before the end of the decade?
Well see what Really Happens but before that lets not make assumptions about that and how it affects Boeing, because Boeing is Boeing and Airbus is Airbus.
@aerobacqueron has snapped a picture of 1437 sitting out on display. Apparently it is supposed to go out another display on Tuesday and then return after that.
ReplyDeletehttps://pbs.twimg.com/media/BpJXdAHCAAAIFSn.jpg:large
Anyone have any idea what these displays are for?
Maybe a sales pitch to Royal Air Morocco. "Look how big the 747-8 is compared to the 747-400 you have now!"
DeleteThere's an article giving hard numbers on fuel efficiency (with links to articles supporting these numbers) in this article... apparently 777X is expected to have a nearly 20% advantage in fuel cost per seat mile over 748, and a little less than 20% over the existing a380. It also mentions advantages in cargo capacity since less of the cargo hold is consumed by passenger suitcases
ReplyDelete"Fuel cost per seat mile, the all-important index of efficiency, is to be $0.048 for the twin-engine 777X, versus $0.057 for the four engine 747-8, and $0.055 for the A380. Cargo capacity for the 777X will be significantly better; the new plane will able to carry 27 cargo containers after luggage, compared with just 18 for the 747-8, even though it is longer. (The even-larger A380 only has eight free cargo positions, due to the space needs of its 525 passengers, which is part of why Airbus is thinking of re-engining its even-larger plane, to squeeze out more fuel efficiency.)"
http://www.bizjournals.com/seattle/news/2014/06/09/377-million-boeings-777-9x-could-take-outcheaper.html
Nobody doubts the efficacy of the 77x series with respect to anything else. If anything, they are paving the way for a much larger twin engine design, that should be theoretically possible by the end of the decade. That is not to say that VLA's will be obsolete, only by that time, their market share would have shrunk by a significant proportion. They will still; be around, but if they are to remain on top, they have to offer something else that Twins Cannot Offer.
ReplyDeleteIf anything Quads make great flagships, and though I have previously touched upon this, it is all about making impressions, and not about what substance comes with it. Though many people doubt the usefulness of such a feature, people are naturally built to be impressed by something that is big, because it is making a bold statement. If I were to demonstrate this to you it would be something like the fourth funnel on the Titanic, which was purely aesthetic and served no purpose whatsoever. It made it look grander and larger and only outwardly so.
Why would this be important?
It all comes down to how you would sell tickets, because after all that is what an airline's core business is. Sell tickets from A to B. Sales is the only metric that generates an income for an Airline, not operations, not maintenance or anything that you cannot sell. Some Airlines are good offering their expertise and Capabilities for sale, but the vast bulk of an Airline's income would come from sales of their commodities (seats, cargo space etc).
Image is very important for an Airline and investing in a Quad to boost their public image should not be a hurdle, because of other Aircraft types that offer better efficiency etc. What is a problem are the risks they have to shoulder when this happens, and mostly Airlines do not want that risk. This has nothing to do which plane is better, but rather whether there is a commercial case for it and commercially speaking, it all boils down to popularity.
One interesting thing someone told me today was a metallic strip that you slap onto your wrist in a single action. It did not look commercially viable as a product, but kids went crazy for it, and the total sales was probably in the billions. It is all about having the right formula and large pool of possible customers. Boeing got the formula for the 748 wrong in the beginning, but that is not to say that they can't do better and turn it around. Time will tell of course.
I'm assuming you've all seen the news of Emirates cancelling their 70 a350 order -- looks like emirates is becoming a 2 horse airline: a380 and b777.
ReplyDeleteWonder if Emirates was offered a sweetheart deal on b773's post-2016 as Boeing bridges the gap in sales until 778/9 roll out on the tarmac at the end of the decade? Maybe even some freighter 777 current generation too. This just further adds to the stress on 748 sales when you've got cheaper pricing deals on 777 current gen as Boeing tries to fill a 3 year sales gap, especially by cargo operators who are extremely sensitive to acquisition price. And perhaps emirates will top off with exercising more of their 50 777x options or top off with a few a380neo or classics
http://www.bloomberg.com/news/2014-06-11/airbus-loses-major-order-as-emirates-scraps-purchase-of-a350-jet.html
And Charlie, I think more airlines are using a380s as flagships... e.g., emirates, korean, singapore etc. Or they're using passenger comfort flagships like b787 like japan airlines and ANA. I've flown on a380 half a dozen times, 787 half a dozen, and 747 and 777 many dozens of times each, and I'll say while the a380 is quiet and comfortable, but the 787 provides a better experience due to higher humidity and air pressure, especially for long 14 hour legs on 22 hour flights from east coast US to asia. You can feel the difference on your skin and especially if you wear contacts, and you sleep better too. I specifically avoid a380 or 747 as my final leg if any luggage is being checked -- it's a nightmare to get your bags (took 2 hrs in San Fran 2 years ago to get 1 suitcase).
"Sales is the only metric that generates an income for an Airline, not operations, not maintenance or anything that you cannot sell."
This is incorrect. Consult any finance or accounting textbook and you'll see that:
net income = sales - costs
If you want more income, either increase sales or reduce costs. Flying empty planes doesn't increase sales -- entering key markets and service and effective pricing marketing product routes etc is what improves sales. E.g. Southwest has been profitable for almost its entire existence over many decades without owning anything bigger than a 737, true for other low cost carriers too. Bigger is not necessarily better. All the U.S. airlines that went bigger all went through bankruptcy, at least once if not more -- you can argue about the reasons, but aircraft plays a part.
Regarding your earlier comment about you never stating that these talks occurred, please re-read your comment -- it's in your first sentence.
Personally, I think Boeing sees the writing on the wall on 748, and rather than throw more good money after bad (they have yet to recoup their 748 investment), they'd rather spend development dollars on 777x where they've already locked in roughly 300 aircraft sales with many hundreds more expected over the next decade.
Yes i did see that news, and whatever happens, there will be negative Ramifications for EK's Mistake. The most obvious of them all is that sweetheart deal that you were talking about, because after seeing that there is no competitor for those 50 77W options, Boeing has every excuse in the world to Jack up their price, whether EK like it or Not. I doubt they will do it, but the if it happens, and they don't want an A350, the only other option, between now and the end of decade has 4 engines and a hump.
ReplyDeleteAs for flagships, who is to say that the 748 wouldn't make a good flagship? Did you know that the Best J class Seats on BA are on the upper deck of their 747's? So why is it any stretch of the imagination to assume less of the 748? Here is A video comparing like for like on LH,
https://www.youtube.com/watch?v=5QfK9VhAYJ8
As for your comment about Net Income, Those definitions you've referred to are theoretical. In a real situation Nobody plays a zero sum game and sells at costs price or less intentionally. Furthermore, the moment you start a business by yourself, you already have an immediate cost to cover, which is your own salary, and Sales is the only way to cover that, meaning that whatever salary you take, you must sell more than that salary to have a Net Income.
Southwest have a winning formula. All they have done is establish a core business, and to remain competitive, all they do is call up the Boeing Sales Guy and asks him what model of 737 is current. Everything else is ticket price and sales,sales sales. They are huge and in business circles, they are legendary, outlasting the likes of Midway, Eastern et al. Also, did all those Airlines that emerged from bankruptcy dump those 'aircraft' on the used plane market afterwards?
Please stop comparing apples to oranges, there are no Serious proposals on the table for the 748 to EK. EK have the requirement and the need for it, but don't need it.
Boeing have stated categorically that they stand behind their product and are committed to it. It costs them less to develop the 748 vs the A380. It costs them less to continue building pax versions, and their annual sales and marketing budget is a small fraction of the purchase price of just one 748. I don't see any capital intensive operation going on here to prop up a 'competitor' to the A380? If anything, the aircraft exists to stop Airbus from running away with the VLA market.
Great info thanks for sharing useful info Able Aerospace Adhesives
ReplyDelete