Gunning For Orders - 747-8 Intercontinental
February 4th, 2008
It is with great pleasure that today’s entry comes from my colleague, Chris Cook.
Boeing’s 747 sales teams no doubt are feeling disheartened by the lack of securing follow on -8I customers during the course of 2007, but with a new-year, they will certainly be wiping the slate clean, and working energetically hard on securing the all-important second -8I customer.
A handful of key carriers that formed part of the 747-Advanced “Working Together” working group when Boeing was studying the requirements for the new 747-400x, seem to have indicated that they no longer have any more interest in the 747.
Two of these carriers, both customers for the super-efficient 787 Dreamliner and over-hyped A380, are Singapore Airlines and Qantas. Singapore Airlines’ interest in the new 747 started off strong, but slowly waned off, similarly at Qantas as well. Qantas’s CEO, Geoff Dixon, recently remarked that the 747-8 is a ‘tarted-up 747’, and that it has fallen out of favour with him.
Image courtesy of Boeing
This comment was enough to have any 747 stalwart’s feathers ruffled, but is Dixon, like Singapore Airlines, playing a bluffing game considering Dixon also said after the launch of the 747-8I: “Boeing’s claims on the 747-8I’s efficiencies, range and payload make the airplane very attractive to us, and we are very interested in the -8, there’s no doubt about that.”
Interesting to note, is that both Qantas and Singapore Airlines interest in the 747-8I appeared to have faded when Boeing opted for the longer fuselage, thus reducing the range from 8,300nm to 8,000nm. The 8,300nm range allowed Qantas to fly year-round non-stop between Melbourne and Dallas with a full payload, but now that is just no longer possible, for example.
However, the longer length fuselage has many major selling points, making it even more attractive to many other Asia-Pacific customers, most notably Cathay Pacific Airways. Lufthansa and British Airways were also very heavy proponents of the 76,3m long 747-8I, and coupled with the idea of the new 747 being able to hold its residual value longer, (no pun intended), this swung Boeing to opt for the bigger 747.
Another key factor that came into play regarding the likes of Qantas slowly backing away from the 747-8I, was of course Airbus.
Image courtesy of Airbus
Perhaps the biggest challenge that Boeing’s 747-8I sales teams’ faced was the pricing pressure or discounts that Airbus offered on the A380 to match the fuel-efficiency, operating economics and discount price the 747-8I offered. It was no secret that when Airbus announced the third delay in the A380’s entry into service, both Singapore Airlines and Qantas were seriously considering the new 747 at the time.
The delay was a major disappointment to the airlines, and ironically enough, a disappointment to Boeing. Airbus, quick to see the imminent threat of the 747-8 gaining huge momentum, offered Qantas and Singapore Airlines exceptionally compelling discounts/incentives on the A380s, in place of compensation pay for the delay of the airplane, swinging both carriers to firm up their options for next to nothing prices. Boeing could not match the low price Airbus was offering for the A380, as I perceived it, and coupled with the range decrease of the -8I, these airlines fell out of favour for ordering the new 747.
Another challenge the 747 sales teams’ had to, and still have to content with, is the formidable 777-300ER.
Image courtesy of Tim Dauber
Korean Airlines, Cathay Pacific Airways, Air New Zealand, Japan Airlines, All Nippon Airways and Singapore Airlines have all opted for the 777-300ER even with the 747-8I on offer to them as well. It is, of course, far too premature to say whether or not these carriers will opt for the 747-8I in the future.
The economics the 777-300ER offer is just so compelling. Singapore Airlines has commented that the biggest competitor to the 747-8 is the 777-300ER, which is one of the reasons why Boeing had to increase the length of the 747 to 76,3m in order to reduce seat/mile costs and have ‘clearer’ water between the two large airplanes.
Air New Zealand once commented that “if Boeing launched the 747-Advanced (-8), we will probably buy it.” The carrier later opted for the 777-300ER. What is clear is that the airlines are willing to operate less capacity airplanes, such as the 777 over the 747-8, as the economics, risks and flexibility is exceptionally compelling.
This truly is the A380’s major competitor as well. Clearly, Boeing’s philosophy of super-efficient, point-to-point, twin-engine wide-bodies is the way of the future for the commercial aviation market, period.Boeing will secure more 747-8I orders; it is just a matter of time.
This year, Boeing will be working hard with General Electric on further tweaking the bleed-enabled GEnx-1B67 engine, as well as finalising all aerodynamic treatments to the 747 to try and eek out more efficiency, and thus range.
Of course, it will not be until the 787 Dreamliner is underway with flight-testing with the GEnx that Boeing will be able to have even more concrete data about the performance of the engine that can then be extrapolated onto the 747. This is one of the reasons why Emirates have said they would prefer to wait until mid-year until placing their much anticipated order for the 747-8I.
Image courtesy of GE
If Boeing is able to increase the range of the airplane, to say, 8,150nm or 8,250nm, this could be an added catalyst for an even greater influx of orders. True, the GEnx is in flight-testing on the 747-100 test-bed and is reported to be performing better than expected, but the bleed-enabled engine has yet to start testing. We all eagerly await the results but they should be very closely matched to the bleed-less engines.
British Airways is tentatively planning on announcing the second wave of fleet renewal orders towards the end of 2008, and whilst the proposed 787-10x, 777-300ER and Airbus A350XWB offerings are being seriously evaluated at the airline, once again the 467-seat Boeing 747-8I may enter the limelight as an attractive alternate.
According to British Airways’ CEO, Willie Walsh, it is “unlikely” that the 747-8I will be re-evaluated, but he would also not rule it out completely either, sparking belief that there might just be some glimmer of hope for a new 747 order from BA.
British Airways is planning on ordering aircraft to replace the bulk of the 747-400 fleet, so it would only seem logical that BA re-evaluates the -8I, the true -400 replacement airplane. BA has indicated many times that there are routes in the airline’s diverse route structure that would be ideal for the “less risky” 747-8I according to the airline’s commercial director, Robert Boyle.
Further, Boyle has been quoted saying; “BA very much pushed Boeing to produce the 747-8.” It was no secret either that BA was also instrumental on pushing Boeing to lengthen the 747-8I to the same length as the -8F, as payload was more important than the range, so why then would BA ultimately reject an airplane that they literally told Boeing they wanted?
Airbus was once again reported to have tabled an 11th hour proposal to BA, that ultimately pushed the ‘near-certain’ 747-8I deal out the window. But the next question really is; can Boeing secure the order this time around?
Willie Walsh is seen as a pro-Airbus man, and this was really amplified when the only comment he made regarding BA opting for the A380 over the 747-8I, was; “I liked it better.”
Whilst the chances of Boeing finally securing BA as a -8I customer are very slim, Boeing no doubt will be fighting hard to have the 787-10x and 777-300ER/777x endorsed by them.
Boeing’s CEO, Jim McNerney, has recently commented that he would not be surprised if one or more of the 10 key-potential 747-8I customers they are in deep discussions with, sign up for the variant this year.
“When you look at an airline like Emirates that’s got a big 777 fleet, [and] a big A380 fleet, there’s got to be some room in a fleet like that for a 747-8 size, and when you have the commonality with the 747-8 Freighter, it makes the economics work even better,” said Tinseth recently. The 747-8 truly is a phenomenal airplane.
Christopher Cook
Johannesburg, South Africa
Pilot and Boeing 747-400/-8 Enthusiast
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Entry Filed under: Aeroplane, Aerospace, Air Transport, Air Travel, Airbus, Airbus A350, Airbus A380, Airlines, Airplane, Airplane Order, Airplanes, Airport, Airports, Aviation, BA, Boeing, Boeing 747-8, Boeing 747-8F, Boeing 747-8I, Boeing 777, Boeing 777-300ER, Boeing 787, Boeing Orders, British Airways, Cathay Pacific, Dreamliner, Emirates, FleetBuzz.com, Jet Travel, Qantas, Randy Tinseth, Richard Aboulafia, Singapore Airlines, Travel
13 Comments Add your own
1. keesje | February 4th, 2008 at 3:30 pm
Hi Christopher thnx for writing this article. I agree on most of you statements, one I share is the synmpathy for 747s’ .
From ATW (Qantas article) :
Executives are weighing the addition of more A380s against placing a major order for either the Airbus A350XWB or the 787-10. Borghetti more or less rules out the 747-8 and 777. “The 747-8 does not do it for us,” he says. “From a customer perspective, it is not what we need.” While he concedes that the -8 was significantly upgraded, “it is still a 30-year-old aircraft,” Borghetti stresses. The shape of its fuselage does not easily accommodate Qantas’s new first- and business-class seats, and it would require a middle seat in business class on the main deck in the common 2-3-2 arrangement, which Borghetti does not like.
http://www.aviationweek.com/aw/generic/story_generic.jsp?channel=awst&id=news/aw020408p1.xml&headline=Qantas%20Plans%20Ambitious%20Asia-Pacific%20Region%20Expansion
I mentioned the seat layout issues of the 747 in a previous thread, those were (unsurprisingly) dismissed. Now from the horses mouth..
On the formidable 777:
He is also not particularly keen to order the 777, asserting that it “is old technology” compared to newer alternatives such as the A350XWB or the 787-10.
All in all it strarts to look like the market has spoken on the 747-8i. Which is a shame because we all love the grand old lady..
About the overrated A380: it proves even better then promised. Expect BA, QF, SQ, LH to place additional others and ANA, CX, JAL, UA, AI, Jet and NWA take a serious look. Maybe one of these airlines will launch the A380-900. EK, CX, ILFC and Virgin publicly hinted so.
The biggest reason the 747-8i seems to be ignored by the airlines : http://www.youtube.com/v/hxeKmiFudFg&rel=1
2. mm cooper | February 5th, 2008 at 12:34 am
Interesting article but you say the 747-8 is “truly phenomenal” but you never say why. Please elaborate, phaps you can be more persuasive than Boeing’s mkting.
3. keesje | February 5th, 2008 at 11:22 am
To have articles having an opinion on a subject is good / creates debate, forms views etc.
If however editorials are focussing on problems at A, downplaying succes, drawing in past failures, highlighting everything that goes wrong or even could go wrong & commenting at that
and on the other side
Celebrating every B succes, downplaying problems (A are worse). B problems are addressed in a sporty, encouraging, long term view way.
That starts to really put a banner on this site.
Maybe it would be good to balance things a bit & find a editor that is willing to put on an article now and then aimed the other way in similar manner. Is that possible or will it influence PR / info relations with Boeing?
4. boeing777 | February 5th, 2008 at 11:30 am
Keesje:
http://en.wikipedia.org/wiki/Editorial
“An editorial … expresses the opinion of the editor, editorial board, or publisher.”
Chris very kindly supplied his own piece here. I doubt very much you would have posted the same had the article been about the positives of the A380F, for example.
Equally, I’m open to, and encourage others to submit their own editorial pieces if they would like to see it published.
Rather than deliberate whether a publication can/cannot influence PR/relations with Boeing, how about sticking to the discussion at hand on the aforementioned topic?
5. keesje | February 5th, 2008 at 9:40 pm
I thanked / applaud Chris for jumping into the arena to defend and promote the Boeing 747-8i. He says he is a Boeing 747-400/-8 Enthusiast and gunning for orders.
An editorial on this side on positives of the A380F or any Airbus would be an absolute shocker for everyone knowing the site. As would be a negative editorial towards Boeing. That is just not going to happen here.
On BA selecting the A380 vs the 748i. Aircraft are selected for capasity / efficiency. Those were the real differences between the two. Not discounting, CEO preference or other feel good excuses..
6. boeing777 | February 5th, 2008 at 9:53 pm
Rather than digress any further from Chris’ topic, I stand by my prior post.
7. Rotorcraft | February 5th, 2008 at 10:11 pm
Yes, aircraft are selected for capacity/efficiency, but also for discounting (which is why, according to EADS, the falling US dollar hurts Airbus’ ability to compete) and CEO preference (which is why, according to EADS, Airbus can’t break into the Japanese market).
8. keesje | February 5th, 2008 at 11:46 pm
Re rotorcraft
It hurts that the dollar fell so deep. but it has little to do with discounting. Discounting can help decide between 2 remotely similar aircraft. They are not.
CEO preference has little to with the Japanese market (its more political).
9. Chris Wallace | February 9th, 2008 at 2:49 am
Alas, the more I study the 747-8I vs. the A380-800, the better the A380-800 looks.
The two year delay allowed Airbus to prove that the A380-800 would do everything they said it would and meet the goals they set out for it. And airlines that already have the A380-800 know better models are coming with more range (A380-800R) or more capacity (A380-900).
The 747-8I will have to at least hit every target and goal, and preferably beat them, to have a legitimate chance to secure any serious orders. She’s the last of her line so even if she’s dead-on, airlines have to factor in how their traffic will grow over the years the plane will be in service and what options they will have to increase frequencies if they don’t have enough capacity.
10. Dougloid | February 14th, 2008 at 1:29 am
“That starts to really put a banner on this site.
Maybe it would be good to balance things a bit & find a editor that is willing to put on an article now and then aimed the other way in similar manner. Is that possible or will it influence PR / info relations with Boeing?”
Keez, if you don’t like the soup stay out of the kitchen. I mean, sheesh….you’ve singlehandedly convinced the rubes on a.net that the USAF is going to buy the A400M…..heh heh heh
The crack that Dutchman’s smoken.
11. Bee | February 20th, 2008 at 12:47 am
Glad to see the 747-8 falling behind the A380, the A380 trumps it in every category except cargo capabilities. Just goes to show how stupid Boeing is thinking that the A380 will cause 747-8 orders just like we all know the delays to the 7-late-7 won’t add to A350 orders. Hope to see the LACK of orders continue, i’m loving it. Now hopefully ANA orders the A380, then the 40 year old hag queen of a plane would be truly dead. Go A380
12. Bee | February 20th, 2008 at 12:59 am
One more thing, to the fanboy who wrote the article, what do you mean by “over-hyped A380″ Something is said to be over-hyped when a lot has been said about it and it doesn’t live up to expectations, i have yet to read trip reports or any reports from SIA that says the plane didn’t live up to its expectations, so what exactly is over-hyped about it, really now take off your blinders.
13. Christopher Cook | February 20th, 2008 at 7:37 am
Clearly you have a sheer lack of knowledge regarding the subject matter at hand. Your rather asinine comments are amusing to read. Where everyone else who wrote comments to my article and offered either support or constructive critism, you BEE, took the rather childish stance of, well, name-calling and offering nothing to back up your comments. To offer you some advice, you have ‘ruled-out’ the 747-8Intercontinental far, far too early and I would be very wary of saying what you are saying as you will end up eating your words in the coming months. Your ‘loving it’ days, regarding the lack of 8I orders, will come to an end in a sense that this phenomenal 747 will garner many new orders. Oh, I am fully aware of the ups and downs of the A380’s in service reports so far, and I have never disputed that the A380 is a technological marvel. In terms of it being over hyped, I think its dismal order tally to date over the nearly decade it has been on offer speaks volumes about the market reluctance to the airplane due to its size, and moreover, it’s current order tally and order predictions are nowhere near in line with Airbus 20-year forecasts.
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