Gimme the bad news first doc:
1.) Boeing is slowing down the 747-8 production rate from 1.5 frames a month to 1.3 frames a month. Or in other words, 18 frames a year to 15.5 frames a year. This stretches out the current backlog to about two years, but it's clearly not a good sign for demand. And even though that means the last currently ordered frame would be built in about two years (early 2017), the reality is that things are even more pressing for Boeing suppliers. They have to manufacture parts for 747s a substantial amount of time before a plane is completed, so the supplier backlog may run out in as soon as a year.
The 747 production line heading forward can probably be slowed down to about one frame a month, or twelve a year. This gives Boeing probably two more opportunities in the future to announce slowdowns before they would have to realistically address shutting down the line. With slowdowns like these, they can probably stretch the backlog out through 2017.
The other alternative is that Boeing needs to sell 15 frames a year to keep things chugging a long. Last year, they did pretty well, selling 12 net (17 gross) airframes. This year has been dire though, with a big fat zero net sales (two gross). After the Asiana cancellation, I'm losing confidence that they'll be able to sell any substantial amount of frames moving forward. There are still potential sales out there, but the longer things drag on with silence, the closer we get to the 778F, the less likely they seem to happen.
2.) Asiana NTU's were confirmed by Boeing. That'll be a total of four white tails, plus line 1437, which may or may not already have a customer.
1.) Boeing is slowing down the 747-8 production rate from 1.5 frames a month to 1.3 frames a month. Or in other words, 18 frames a year to 15.5 frames a year. This stretches out the current backlog to about two years, but it's clearly not a good sign for demand. And even though that means the last currently ordered frame would be built in about two years (early 2017), the reality is that things are even more pressing for Boeing suppliers. They have to manufacture parts for 747s a substantial amount of time before a plane is completed, so the supplier backlog may run out in as soon as a year.
The 747 production line heading forward can probably be slowed down to about one frame a month, or twelve a year. This gives Boeing probably two more opportunities in the future to announce slowdowns before they would have to realistically address shutting down the line. With slowdowns like these, they can probably stretch the backlog out through 2017.
The other alternative is that Boeing needs to sell 15 frames a year to keep things chugging a long. Last year, they did pretty well, selling 12 net (17 gross) airframes. This year has been dire though, with a big fat zero net sales (two gross). After the Asiana cancellation, I'm losing confidence that they'll be able to sell any substantial amount of frames moving forward. There are still potential sales out there, but the longer things drag on with silence, the closer we get to the 778F, the less likely they seem to happen.
2.) Asiana NTU's were confirmed by Boeing. That'll be a total of four white tails, plus line 1437, which may or may not already have a customer.
According to wikipedia, the 748i has partial fly-by-wire. I'm assuming they added the portions of FBW to 748 that were cost-effective relative to the expected future sales. I believe they took a similar approach with 737max. With the shrunken market for 4 engine jumbo's, I just don't see why you would throw billions more dollars of new tech into a very small number of airframes to be sold... the amortized costs of these improvements becomes very high per airplane, and you take on significant risk of never regaining teh sunk capital investment, let alone making a profit.
ReplyDeleteArticles on the web today already point to airbus possibly abandoning the a380 airframe by the end of the decade, and that aircraft is quite new in design (cockpit, fbw, etc.). Personally, I don't buy the slot-constrained airport argument for justifying a380 and b748 since if you look at a busy airport like JFK or ORD or ATL or LAX, many of the aircraft runway slots are used by aircraft with less than 130 passengers. I.e., it would be simpler to conserve runway slots by upgauging a 737 than to upgauge a 777 in that busy airport assuming the CASMs are similar in each up-gauge.
http://www.bloomberg.com/news/2014-12-10/airbus-at-crossroads-as-a380-jumbo-faces-spend-or-fade-conundrum.html
And there stands a very good chance that Airbus will never earn back the $25B sunk into the design of the a380 aircraft, although admittedly, Emirates seems to have made out pretty well with the a380 (I even flew on this just a few months ago -- Emirates does wood grain borders around each window even in coach!) I'd surmise that history will look back and call Emirates the winner on the a380, not airbus.
Partial FBW or not, your own comment has answered the question as to why the sales isn't up to par.Their approach was that it would only sell an x number of frames, instead of going for the whole solution and upgrade the aircraft to meet the challenges of the 21st century. I don't blame them for not trying, its only that they aren't trying enough. Of all the designs put forth to remove the Queen from its perch, 3 (787, A350, A380) are clean sheet designs. Only 2 the (A330, 777), were not originally designed to do this.and even then the aircraft that is slated to do the most damage (779) is in fact a derivative.
ReplyDeleteWhen you talk about the A380 as the shining example of technology not being a selling point, you have to factor in the fact that this plane has 2 decks and seats well in excess of most airlines pax requirements. Slot constrained or not, it is the Large Aircraft, the forerunner of today's VLA's that created the market, and catered for growth until the point where they could be replaced by smaller lighter designs that are more economical due to today's economic climate. The bottom line is that these VLA's were designed and built for much more rosier predicaments than what we have today.
Que, the technology used on the 748. Designed to offer a shadow of a competitor to a cleansheet design.
If this was their approach, then the Queen is doomed. By offering less up front, economical or not, you are subconsciously telling your customer that the best you can offer is an underscoped airplane techwise, that is unlikely to be upgraded, and will only feature 1 engine type, with a control system that is not concurrent with its contemporaries.
I wouldn't buy that airplane. I doubt that any serious CEO would.
The key to saving the 748, is to step up the spec to hit 8500nm, offer another engine on the frame, getting rid of the excess weight by looking at weight savings across the board, that might mean using FBW to do this. Talk about and study Higher Gross weight models, maybe even a stretch. Show the customer that this is not a dead program by discussing the future, and that therein lies the commitment to build it.
"The key to saving the 748, is to step up the spec to hit 8500nm, offer another engine on the frame, getting rid of the excess weight by looking at weight savings across the board, that might mean using FBW to do this. Talk about and study Higher Gross weight models, maybe even a stretch. Show the customer that this is not a dead program by discussing the future, and that therein lies the commitment to build it."
ReplyDeleteSo what specific features would you add to B748, how much would their development + testing + certification cost, and when would it be ready for delivery to the customer? And for this advanced configuration you advise, how many airframes do you expect them to sell over the life of that configuration?
"that is unlikely to be upgraded, and will only feature 1 engine type, with a control system that is not concurrent with its contemporaries. I wouldn't buy that airplane. I doubt that any serious CEO would."
Just for the record, the B737max will only have a slightly fly-by-wire system, offers 1 engine type, and will only offer minor upgrades going forward. And Boeing is already hinting at a replacement product sometime around 2025. Yet this plane sold in the thousands with delivery slots sold out to the end of the decade and beyond.
You have completely missed the point again. Here is you statement on response to mine:
ReplyDelete"So what specific features would you add to B748, how much would their development + testing + certification cost, and when would it be ready for delivery to the customer? And for this advanced configuration you advise, how many airframes do you expect them to sell over the life of that configuration?"
There is a Huge difference between talking about it and actually doing it. I don't know of any manufacturer who would undertake the offing, without commitments ready at hand. What BCA would really be doing would be to put the options on the Table to be discussed which is the substance of my post. You might not think that it would work, but then again, how would they know if they didn't try.
As for the 737, I'm very glad that you brought this up. Here is your quote again:
"Just for the record, the B737max will only have a slightly fly-by-wire system, offers 1 engine type, and will only offer minor upgrades going forward. And Boeing is already hinting at a replacement product sometime around 2025. Yet this plane sold in the thousands with delivery slots sold out to the end of the decade and beyond."
The 748 will offer ZERO upgrades going forward, will NOT have a clean sheet replacement built in 2025 and is NOT already in service in the Thousands, in one form or another. (thus explaining WHY the 737Max has sold thousands of copies despite all the things that it lacks). I;m sure that BCA will make the Max a very fine airplane indeed, but this is yet another Apples to Oranges comparison.
Also, In 1988, all the press releases I read from Seattle about the A320 was that it was a competitor to their 737-400 model. BCA believed that by building it cheaper they could price out the A320 with its FBW out of the market. Airbus has been steadily building superior versions of this machine since then, and now for the 1st time it is going for a major revamp.
The same cannot be said for the 737, after the 737-400 failed to have the desired effect, they built the 737NG to stay competitive and now they are going to build the 737Max to match the latest works from Toulouse.
How much has the FBW contributed to the A320's sales? Its hard to say isn't it?.The effect is intangible, and intangibles do have an effect on sales, regardless of the products capabilities or pricing.
Would you buy a cheap and fast supercar Built by Idi Amin, assuming that he did build them? This is the central question though, if intangibly the 748 could benefit from having an FBW system, then there is reason to study that by asking around..
Going back to the 737
I work at the plant where the 747-8 fuselage panels are assembled and have never worked in an environment where the morale has been this low. Everyone is very tense and overwhelmingly negative as the future of our plant and this plane becomes more and more evident with each passing day. Despite what management is trying to sell us everyone knows that the big push is on to get Boeing it's final panels so they can close the plant as soon as possible. If the consequences weren't so dire it would be comical to see them get up there with their powerpoint presentations and lie through their teeth about out non-existent future and really trying to sell it. It's hard ot believe that they think we are so stupid as to not see what they are doing or what our collective future holds. We would respect them so much more if they just leveled with us. We all know what's going to happen anyway, why play games?
ReplyDeleteSorry to hear man. Even with all the bad signs, as a crazy 747 fan, I'm still extremely hopeful things turn around.
DeleteWhy play games? It's always a game with sales. Sales guy says "yep, I've got this customer right where I want them, they'll sign next week", but it ends up not working that way. Sorry morale is low, but sometimes it just happens. Every product has its cycles, this one just happens to be nearing bottom of the cycle.
DeleteThe last time I worked in an organization with low morale, flagging sales and just general mistrust of any of 'the suits' , the board took a knife and cut out the deadwood in the upper and middle management. Except that by the time that happened, many of us in the sales team had moved away, and were deeply saddened that this could not have occurred earlier. They had good products, a good reputation and solid understanding of the science, and they could not make it work because their leadership style was about platitudes and false idioms.
ReplyDeleteI am just a salesman. I run my own show, but that is all I am.
All of my customers do not value the effort I put into it. In many circumstances, it is about the right deal at the right price and to hell with the rest. Customers are wholly responsible for my success, but only up to a point. Some of them have zero loyalty, and are superficial to say the least. At the end of the day it is business.
BCA is also a business. BCA makes fine airplanes, but BCA is not perfect (nobody is) and in the case of the 748 BCA have misread their customers. I'm not keen on BCA's style of management. but that is their problem. All I've seen so far about the 748 tells me that is planned obsolescence and they have no desire to build anything bigger than the T7 when all is said and done. Market wise, they have been making this push for years, first with the T7, next with the 787, and will just need to publish more rhetoric as to why they wont need the quad anymore.
You can Blame BCA because it is Easy, but really it is their customers who are responsible. I'm not saying that they killed the 748, but rather all they want is more money and Twins are a good shortcut.to that. Long story short, It is not what they say, it is the way they are saying it, and you have to spend the money to get the money.
No more studies and development for the 748? No more 748. Period end of discussion.
@charlie
ReplyDeleteAre you suggesting that Boeing never asked any customers what features they want to see in future refinements to the B748? If they're going to offer a feature, isn't the very first question a customer will ask will be --- how much extra will that new feature cost? How can you even put the new feature on the table without knowing its cost?
As for your commentary on the B737, that entire explanation makes a great case for why it would be better to withold any large investment on the B748 and put it into the B737 instead which has a long sales life ahead of it, with production already nearing 600 B737's per year in the next few years. Boeing also derives a significant chunk of its cash flow and overall profit (not necessarily margins) from the B737 as well, and is able to amortize certain fixed cost R&D investments (e.g., cockpit instruments & avionics R&D, etc.) over a very large production run to maintain profitability on the new tech.
Or put that B748 investment into the B777X, which is already nearing 300 in sales despite not even being available for delivery for at least another 5 years.
While I think Boeing has at times been slow to react to the market, I think they seem to eventually get to the right aircraft.