747-8 Gets Going
June 5th, 2008
Today’s YouTalk entry is kindly supplied by my colleague, Chris Cook.
747-8 Gets Going
Boeing always knew that when it ‘re-entered’ the 400 seat and larger mega-jet arena with a radically improved 747, that the new 747-8I wouldn’t be a “barn-burner” in terms of orders.
When Boeing launched the 747-8I officially on 14th November 2005, the Airbus A380-800 super-jumbo had already been on offer for five years, and further, had already lapped up most of the orders from airlines that required a larger airplane than the 416-seat 747-400.
Image courtesy of FleetBuzz Editorial.com
Whilst some may argue that Boeing, during that time, had offered various other 747 offerings such as the 747-400XQLR and the 747X studies and failed to garner any orders or reach launch stage, there was no radical GEnx engine offering on those 747s.
Further, aerodynamic and structural technology now being incorporated on the 747-8 was still in the early stages of advancement, and thus any upgrade to the 747-400 was seen as too warmed over.
Image courtesy of GE
Boeing knew that they needed a radically improved 747-400, and only once those GEnx engine became available did the new 747 programme really take-off and make huge economic sense.
A senior source from one of the largest operators of the A380 commented that should Boeing have had the 747-8I on offer in early 2000, then no doubt the airline would have opted for it over the A380. Lufthansa, the launch customer for the -8I in December 2006, commented even that once those GEnx came on-board the 747, the new 747-8 “started to make economic sense”, according to Nico Buchholz, Lufthansa’s senior vice president-corporate fleet.
Since the launch of the 747-8, critics have been quick to point out the very sluggish order intake for the 467-seat 747-8 Intercontinental. But, at the same time, they fail to note that not only has the A380 also had a very sluggish order intake, and very nearly lost the highly-controversial British Airways order to the 747-8I, but further the A380F program was shelved for a number of reasons and is likely never to be revived.
As reported a while back, the main reason why the A380 has secured follow-on orders is due to compensation deals with Airbus and the airlines. Indeed, before the second round of the A380 delays were announced, the likes of Singapore Airlines and Qantas were seriously eyeing the 747-8I, with the latter especially showing much enthusiasm for the model, and in fact praising it.
After the A380’s second delay announcement, the months that followed saw interest from these two carriers, in particular Qantas, dwindle for the -8I, with comments such as “tarted-up 747” echoing from Qantas…ironic as it once was: “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.”
However, looking ahead, the future certainly seems bright for the new 747-8I despite its somewhat sluggish sales so far. Boeing is already in deep discussions with between 7 and 10 airlines about the -8I, and already there’s been some success with Arik Air’s Letter of Intent to order 3.
Image courtesy of FleetBuzz Editorial.com
With the 747-8I, airlines have a radically improved 747-400 on offer, with exceptionally compelling economics and some stellar performance capabilities. No doubt the -8I shows its true colours as being a true 747-400 replacement as well as a complement to the A380 in certain airline fleets.
It was never Boeing’s intention with the -8I for it to be a direct, head-on competitor with the A380, but rather an attractive alternate to the higher risk A380. If Boeing opted to compete directly with the A380 on a size scale, the -8I would have well and truly been the same size as the proposed 747-600X, and thus had an all-new wing. Boeing’s customer driven decision to opt for the 76,3m long 747-8I and its 467-seat configuration was to address the 400 seat to 500 seat market gap, and they’ve done it beautifully with the optimised -8I. Burning between 2,6lts/pax/100km and 2,8lts/pax/100km in a Boeing ruled performance envelope, the new 747 is the most fuel-efficient airplane in the large arena.
Whilst Lufthansa’s displayed figures for their 747-8Is are estimated around 3,5lts/pax/100km, this is in part due to their opting for around 405 seats. However, it is pertinent to note that in an Airbus ruled performance envelope for the 525-seat A380, that airplane should burn 2,9lts/pax/100km but Lufthansa has also estimated that in fact it will be closer to 3,3lts/pax/100km.
This year and next, it is widely expected that the 747-8I will garner more airline customers and orders based on the assumption that the airlines will conclude their 747-400 replacement studies, with a quite a few falling in favour of the -8I.
Rule-of-thumb dictates that a prime age to replace commercial airplanes is after 20-years of being in service, and in this case, the 747-8I is timed perfectly to capture the first large wave of 747-400’s reaching the 20-year age mark and needing replacement.
In fact, from 2010 through to the end of 2013, some 210 747-400s will reach the 20-year age. The second large wave will occur from 2017 through to 2019. This falls in-line with the entry-into-service of the 747-8I.
Christopher Cook
Pilot and Boeing 747-400/-8 Enthusiast
Johannesburg, South Africa
Entry Filed under: Aeroplane, Aerospace, Air Transport, Air Travel, Airbus, Airbus A380, Airlines, Airplane, Airplane Order, Airplanes, Airport, Airports, Boeing, Boeing 747-8, Boeing 747-8F, Boeing 747-8I
15 Comments Add your own
1. Doug McVitie | June 5th, 2008 at 10:20 am
Excellent analysis, logical conclusions. Refreshing…
2. boeing investor | June 6th, 2008 at 7:40 am
Totally agree. In time, the 747 will garner more sales than some imagine.
Given the low cost and the fact that the Freighter is selling well, this is a great airplane with a wonderful future
3. Jackson | June 8th, 2008 at 10:28 pm
Face it, the 787 is a huge succes and the 747-8i has been a bit of a flop. You can’t win them all.
The -f is doing all right though and might even help Boeing overtake the a340-500/600 sales with the 747-8 range. The lesson is a slow selling plane with wing inserts and a snazzy new interior can only postpone the inevitable so much.
4. keesje | June 10th, 2008 at 1:17 pm
Boeing expected to sell twice us much passenger as cargo 747-8’s.
The 747-8i lost out against the A380 in almost all competitions.
This is certainly not what Boeing expected / hoped. Definately something went wrong.
Some airlines say the narrow 10 abreast economy and 7 abreast business class width combined with the limited flexibility upperdeck is making the 747 impracticle, regardless of the engines.
5. Chris Cook | June 10th, 2008 at 4:59 pm
Keesje:
Thank you for your comment. Hope this helps clarify some details for you.
Boeing estimates that the 747&larger market will require around 370 new-built freighters, and 590 new-built passenger airplanes over the next 20 years. These figures remain firm at Boeing to this present date.
Now, Boeing split the 590 airplane market 50% in favour of the 467-seat 747-8I, or some 295 sales. At the same time, Boeing split the freighter market 50% in favour of the -8F, or some 185 sales. Therefore, it can be seen that Boeing indeed did predict that the -8I would sell more than the -8F based on a 50% sales success in each market against the technologically advanced A380.
With the A380F shelved, and probably never to be revived, the 370 airplane market is for the -8F to enjoy all to itself.
The -8I market is unique as it’s not a direct competitor to the A380, and further, the 747-8I has no competitor…economics aside, there is no other tri-class seating 467-seat airplane with more than 8,000nm of range. The 747 is the only airplane.
Whilst I will agree that perhaps the market for the -8I will be smaller than 295 sales, it will most definitely be larger than figures quoted in some ‘reputable’ magazines my friend.
Ironic that you should mention that 10-abreast seating is seen as “too-narrow” by some airlines, but yet here we have Airbus proposing 10-abreast seating in the A350, which is narrower than the 777!! Yet, the 777, narrower than the 747, also has 10-abreast seating in some airlines. I don’t buy your arguement at all my friend.
You say “The 747-8i lost out against the A380 in almost all competitions”. I have to smile to myself…are you sure the 747-8I lost out at the end of the day?
The only competition so far thats seen the -8I and the A380 pitched against each-other was British Airways. All other “competitions” involved airlines that already had A380s on order, and were in need of compensation from Airbus…hence the article. Go figure.
Thanks again.
6. keesje | June 11th, 2008 at 10:06 am
I do not understand that you say the 747-8i doesn’t compete the the A380 but still BA had a competition between the two.
And why would the airlines that already have A380’s on order not consider the B747-8i if it is not a competitor to the a380?
Shaky..
I think the market for large freighters will be taken by the converted 747-400’s being replaced by a380’s, not by 747-8F’s.
About the 8i having 469 seats in three classes. That is the Boeing “typical” seatcount. The A380 has about 30% more seating capasity the the 747-8i. look at A380 seatcount & you can make real world seat estimation for the 747-8i (and associated seat mile costs).
The Lufthansa seat mile cost estimation B777 is referring too. Thing is its hard to suggest LH doesn’t understand.. http://i191.photobucket.com/albums/z160/keesje_pics/lufthansafuelburna380-747-8i.jpg?t=1213175169
The fact that someone once mentioned an airline asked for 10 abreast on a A350 doesn’t make the 747 seats wider or upperdeck more flexible I’m afraid..
7. BOEING777 | June 11th, 2008 at 10:11 am
Keesje - I didn’t author this post, Chris Cook (whom you replied to) kindly supplied this article.
8. Chris Cook | June 11th, 2008 at 5:48 pm
Keesje:
I have to smile to myself when reading your second comment. Not to be rude sir, but did you really read my article? Your questions have been answered in the article. You ask arrogantly:
“And why would the airlines that already have A380’s on order not consider the B747-8i if it is not a competitor to the a380?” Simple, as read in the article, Airbus had a huge pull in that with their compensation offerings to the airlines. You can’t try and justify your statement Keesje as you’ve quite clearly saw comments from Singapore Airlines and Qantas in the early days on the 747-8 programme…why would those change so drastically then? The A380 was delayed three times, that’s why. Yes, Boeing lengthened the -8I and thus range was sacrificed, but still, that does not explain why Qantas took such an anti-747 approach towards the end. Perhaps you should ask John Leahy why?
Indeed, BA competed the 747-8 against the A380…as which one would be the better 747-400 replacement airplane. We will see this occur again when ANA amoungst others issue their RFPs, but remember, we could have also seen BA opt for both the -8I and A380…but would Airbus have allowed that? I recall Airbus giving BA a ‘take it or leave it’ scenario on the A380…No split order, or our rediculous discount won’t be on the table anymore!
No that’s shaky.
Your freighter market analysis is also drastically flawed, unless you think the CEO’s from many of the leading air-freight airlines are not informed?
One just needs to ask Atlas Air or Cargolux on why they opted for -8Fs instead of -400BCFs, or Cathay Pacific Airways. I’m sorry Keesje, your freighter market anaylsis is just wrong.
When have I questioned Lufthansa’s fuel burn estimates for the -8I? That brings me back to my first question to you: Did you really read my article? I’m sure Lufthansa is 100% correct, but it’s amusing how you don’t get upset with their A380’s fuel burn estimate either.
Um, yes, 10-abreast seating on a 747 is wider than on A350, unless you want near non-existant aisle width, which will never pass evacuation tests.
9. keesje | June 12th, 2008 at 12:55 am
Boeing777 excuse me
Chris, I don’t believe Airbus is dictating what BA, SQ and QF say. Neither should I put much value in “rediculous discounts” Airbus is giving. I’m not sure it isn’t a feel good excuse for a lost 747-8 sales campaign. ‘
The A380 has a 5 yr backlog, prospects coming up, aircraft perfoming better in service then promised, great passenger responds and no competition. Not a rational place for steep discounts if you ask me.
On the freighters, two of the three cargo airlines you mention have converted 747-400s and will get more.. just as the majority of all 747 freighters worldwide are converted passenger aircraft. A 747-400 converted freighter does about $80-90 million and is a pretty efficient machine. Many are becoming available. Conversion centers compete. Not good for the 747-8F price..
10. CMack | June 12th, 2008 at 7:20 am
Thanks, Chris for your informative and insightful article. It was a great read. You definitely know your stuff, as evident from your logical analysis.
It is frustrating to see a certain commenter seemingly intent on bashing Boeing writing stuff that makes me question whether he ever read your article in the first place!
Anyway thanks again!
-Chris
11. BOEING777 | June 12th, 2008 at 7:33 am
Keesje - In todays current economic climate, converting any 747-400 to a BCF means using a older airplane that drinks more fuel to haul 80-90 odd tons of freight.
The 777F can do a much better job than can a 747-400BCF and it’ll do the trick using less fuel and costs less to operate over its life, despite the high sticker price.
The -8F is no different. Its one heck of an airplane that sent the A380F to its grave - it hasn’t racked up near triple-digit orders for no reason. Hauliers want something economical and a jet that’ll last. At best, the BCF is a temporary reprieve, not a long term solution.
Further, if the BCF was in demand, we’d probably never have seen the -8F. As it is, the market wants the -8F, it has ordered the -8F and its smaller 777F sistership. Unless oil drops to 10 bucks a barrel, the notion that the BCF will usurp 747-8F sales is like saying the A380F will be revived.
As it is, no one ever recreated the dodo after its disappearance
12. Chris Cook | June 12th, 2008 at 8:54 am
Keesje:
I’m going to refrain from turning this comment section into a mud-flinging match. I need to just make a few things clear. I personally think the A380 is a technological marvel and I certainly tip my hat to Airbus for designing such an impressive airplane. Sure, I don’t like the looks of the airplane…the best looking Airbus by far is the A330. Whilst I will admit, although I never denied this, the A380 does indeed offer some good fuel-efficiencies and operating costs, and does offer some unique cabin flexabilities as well. But reality is, with nearly a decade on offer, this airplane has yet to break the 200 firm order mark, and further, has been fighting hard to hold onto some of its customers. If only you knew, as much as I’d love to reveal it, just what BA for instance paid for the A380, you’d be shocked. If BA paid that price for the 747-8I, I would be disappointed in Boeing. Hence my original statement on: Did the 747-8I really lose at the end of the day?
Indeed Keesje, not a rational place for deep discounts, but yet here we have Airbus doing it!
Will the A380 garner more orders? Most definitely.
Will the 747-8I AND -8F garner more orders? Most definitely.
13. keesje | June 12th, 2008 at 1:40 pm
For me the deep BA A380 discount is not much more then a new urban legend from a very particular group. Repeating it doesn’t make it more reality.
Looking at the situation the 747-8i has been in for years the proposal Boeing did was no doubt suiting the strategic situation. Unconfirmed sources / people who can’t tell suggest Ryanair, ANA, NWAC and others (LH) know how flexible Boeing can get.
Likely not much will change and 747-400 cargo conversions (not only BCF, also BDSF, SF Singapore) will far out strip new build 747 freighters, as has always been the case.
Of course the 747-8F is more fuel efficient, but the list price difference ($ xxx.xxx.xxx & future uncertainties) will have the industry continue to rely on conversions.
Atlas e.g. will have to replace its nearly 40 yr 747-100 converted freighters, and so will Polar, Korean, Icelandic, Fedex, evergreen and other big 747 cargo operators.
Spanking new 747-8F’s they simply cannot afford. (Unless Boeing goes rockbottom deep with its price.)
14. BOEING777 | June 12th, 2008 at 1:56 pm
“For me the deep BA A380 discount is not much more then a new urban legend from a very particular group. Repeating it doesn’t make it more reality.”
Then its sad to say how disconnected from reality, or the reality of that BA/A380 deal you are.
“Spanking new 747-8F’s they simply cannot afford.”
Atlas/Polar have 747-8F’s on order, as does Korean Air. Fedex, as you know, killed the A380F and selected the 777F.
In truth, cost of freighters is unlike that of passenger jets - bottom line is that the marketplace will demand new build freighters for missions that BCF’s cannot operate, otherwise Boeing would never have invested in the 747-400ERF family. As you state, there are plenty of 747-400’s out there that can be converted, but the rate at which that is happening is snails pace…
15. Jeffo04 | August 3rd, 2008 at 10:34 pm
keesje:
If you think the deep discount is just a legend you have to be joking. A380’s were being discounted up to 40%. That is one reason the number of A380’s that need to be sold by Airbus to break even on the project is now up to 420. They have 198 orders so far and only 3 new orders this year. Also the A380-F is more than likely never going to exist. Airbus still has not stated a date for that model being available. 747-8F sales will be strong and you may see the 747-8I steal a few sales from the A380. The A30 is a marvel of technology but it is still looking like it could turn into a huge white elephant.
http://www.bloomberg.com/apps/news?pid=20601085&sid=adjAi_ZE0m2o&refer=europe
http://www.usatoday.com/travel/flights/2007-09-27-ba-plane-order_N.htm
http://www.spiegel.de/international/0,1518,508425,00.html
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