Korean Air Selects Boeing 747-8 Intercontinental
December 4th, 2009
Almost three years to the day when Lufthansa finalised a deal for up to 40 Boeing 747-8 Intercontinental’s, Korean Air becomes a new customer for the type - and in doing so may have quashed any notion of the passenger jet being culled from the Boeing portfolio.
Earlier this year, Boeing issued a statement declaring that “it is worthy of investment and will be a great airplane for our cargo and passenger customers.”
Korean Air tells me that the deal is valued at around $1.5bn and will complement the airline’s previous order for up to seven 747-8F’s, the first of which is scheduled for delivery a little under two years from now.
Image copyright/owned by FleetBuzz Editorial.com
Korean Air plans to deploy the 747-8I’s on routes to Europe as well as North America and says that it will “fill the void between our 300 and 550-seat aircraft in our future fleet.”
Despite the program being pushed into a forward loss position, 747-8 VP and General Manager Mo Yahyavi was particularly upbeat about future prospects for both passenger and freighter models and had even talked up the possibility of increasing production to match anticipated demand.
“My worry is how am I going to be able to respond to that increased rate – when the up-tick cycle comes, everyone wants airplanes, so we’ve got to be ready for that.
We’re constantly talking to customers when they want to talk. But yes, I’m very busy these days,” Yahyavi told me recently.
And it seems his patience has paid off with this new order in the bag once the contract ink has dried.
Korean Air becomes only the second carrier so far that will operate both Airbus A380’s and 747-8I’s. The market for both these large passenger jets is small and continues to contract as the growth in frequencies usurps the need for bigger airplanes.
While the 747-8 is still reeling from cost overruns and technical challenges, its financial position is still much better than that of the bigger A380 - only last month EADS confessed that the airplane was “still a matter of concern” and that both “industrial and financial reviews” would take place to assess the loss-making program that has thus far sapped over $26bn from EADS and taxpayers.
Image courtesy of Boeing
Korean Air appears to have plugged a gap in its fleet between the 777-300ER and A380. With Airbus having a product void beneath the A380 and above the A350, Korean Air has yet to consider the A350XWB given its existing commitment to taking 787’s.
Now that this deal is sealed, the question is not whether Boeing pushes on and decides to increase production rates on the 747 line, particularly as the bulk of 747-8 orders are for the freighter model amidst the worst environment seen in the cargo market for the last fifty years - the challenge probably isn’t even about getting the program executed on time - the real litmus test is whether there will be new customers for the 747-8 Intercontinental.
Considering the type has newer engines and many design and aerodynamic features lifted from the 777 and 787, it’s clear the 747-8 has been given a boost to soldier on, particularly as Boeing VP Marketing Randy Tinseth noted on his blog that the 747-8I had reached the 90% design release stage.
So just who will be next, and when?
Entry Filed under: Airbus, Airbus A380-800, Boeing, Boeing 747, Boeing 747-8 Intercontinental, Boeing 747-8F, Boeing 747-8I, Boeing 777, Boeing 777-300ER, Boeing 787, Boeing 787 Dreamliner, Korean Air, Lufthansa, Mo Yahyavi
62 Comments Add your own
1. Tweets that mention &hellip | December 4th, 2009 at 16:27
[...] This post was mentioned on Twitter by FleetBuzz Editorial, Don Currie. Don Currie said: RT @FleetBuzz: Korean Air Selects 747-8 Intercontinental http://is.gd/5clch [...]
2. jacobin777 | December 4th, 2009 at 17:38
Sweeeeeet!
I’m glad to see another carrier purchase a plane which will fill the void between the B77W/A350-1000XWB/A346 and the A380……with two carriers now having ordered both the A380 and B748I, I’m hoping a few other carriers will do the same.
3. Paula K | December 4th, 2009 at 17:57
I’d expect ANA to give serious consideration to this aeroplane now that one of its rivals will be buying it.
ANA has resisted the A380 due to its extreme bulk, but for ANA, the -8 makes a compelling case to replace the 744s.
4. johnny stick | December 4th, 2009 at 18:31
It seems to be a tough time to sell airplanes, and yet the new model, that hasn’t even flown yet, is getting some bites on the line; I see this as being a big positive for Boeing. Maybe the 747-8 will start off slow and then build momentuem.
5. Paulo M (Johannesburg, RSA) | December 4th, 2009 at 19:08
Well, well, well! What have we got here?!
Is it contractual already? How many? Google, google!
It was always going to be an exceptional aircraft, this 747-8 Intercontinental. And, so it is that two Blue Chip airlines have it in their plans for passenger travel. And so, The Queen is to zip you from Asia to Europe or North America, and - hopefully - from Europe to Africa - faster and sexier than anything else at those long range missions, once more!
Litmus test? ”Hell, if you build it, I’ll buy it.” ”If you buy it, I’ll build it.”
The real test is just a few weeks away now, when the 747-8F flies. The future of the 747-8I lies in those initial numbers and conclusions to be made.
6. Mike M | December 4th, 2009 at 20:51
Where is that sucker Keesje now?
Korean Air has more 747-8s on order than it does A380s!
Or is that because the fat bitch from Toulouse doesnt have a freighter variant?
Ha!
7. Falcon | December 4th, 2009 at 22:17
First, good to see the 787 and especially -8i having some good news.
Second, a few notes about what has been said at this place.
Mike M says: “Korean Air has more 747-8s on order than it does A380s!”
Wrong on so many levels.
1) Korean Air have orders for 10 x A380
2) Korean Air have orders for 5 x 747-8F
3) Korean Air have options for 2 x 747-8F
4) Korean Air signed an MOU for 5 x 747-8i
Since when is 5 more than 10? Not even with the MOU converted to firm will they have more.
After your tantrum about Airbus and Ethiopian one would expect you to apply the same standards in all cases, or……
On a similar note; Saj, will you include options in the same way in all future order counts.
Third, as I know this would have been mentioned if Airbus was involved. Should this be classified as a compensation order for the work Boeing just sent to Korea?
8. 747-8 update - AirplanePa&hellip | December 5th, 2009 at 03:44
[...] the dotted line for five 747-8I passenger models plus purchase rights on a further five (see this Fleetbuzz.com analysis) comes in a busy week for the program. News of the Asian marketing breakthrough emerged [...]
9. Chris Wallace | December 5th, 2009 at 03:44
Anyone know where Sarkozy has been? That might explain who ordered those 50 A320s. *rolleyes*
God forbid an airline order a plane that meets it’s needs.
KE’s 77Ws seat 40-90 less than their 744s, so maybe, just maybe, KE feels they need a 500 seater, a 400 seater and a 300 seater depending on the market they are serving?
10. Paula K | December 5th, 2009 at 04:09
@Falcon
Korean Air’s aerospace arm has been doing work for Boeing for a long time, as well as for Airbus too. A quick glance delivers the following
http://www.boeing.com/commercial/news/mdc/97-79.html
http://www.boeing.com/news/releases/2003/q4/nr_031104s.html
http://www.boeing.com/news/frontiers/archive/2005/october/cover4.html
http://www.boeing.com/commercial/787family/news/2005/q4/nr_051020g.html
http://210.113.150.66/asd3/eng/broch/airbus.html
http://210.113.150.66/asd3/eng/broch/boeing.html
I dont disagree that compensation was indeed a factor, given KAL’s presence already in producing aerostructures (likely on a fixed contractual basis), I don’t see that they would have won much of a concession, but am happy to be proven wrong if this is not the case.
11. Mike M | December 5th, 2009 at 05:07
>>>Wrong on so many levels.
Hm, yes. NOT
http://boeing.mediaroom.com/index.php?s=43&item=979
Firm order dude - 5 x 747-8I, 5 x 747-8F plus 2 options is 12.
Every man and his blog called this wrong - Aviation Week, the trash on All things 787 etc, all wrongly called this an MoU and it never was, was it?
I’d offer you humble pie, but I dont want to be blamed for you choking on it.
Keesje is another matter!
12. CMack | December 5th, 2009 at 06:45
Awesome news! I’ve been waiting so long to hear of a new order, so this is a big win for Boeing and goes a long way towards proving the 8i will indeed enter service after all. Now maybe ANA and/or Cathay will take a hard look at it as well
13. Ryan | December 5th, 2009 at 08:40
This is fantastic news, I had to look twice that I didnt mistake the 747-8 order for the cargo jet instead!
Who’s next, I’d like to think NH has a shout as well as Eva Air.
14. Chris C | December 5th, 2009 at 09:10
Simply stupendous news indeed!
The 747-8I is an incredibly good airplane, and will be, without a doubt, the pinnacle of airborne excellence!
With Korean Air’s 747-8I order, they’ve ordered a total of 72 phenomenal 747s, including the special 747-SP variant and -400ERFs. Korean Air is a stalwart 747 operator, and are indeed a very special and significant customer for the -8I and -8F!
The 747-8I is a highly-efficient and optimised airplane and will, without a doubt, compliment their 777-300ER and A380 fleets and offer good flexibility and profit return for Korean Air.
Great order for the -8I, and there’ll be many more!!!
15. Vero Venia | December 5th, 2009 at 09:31
I have just read the last sentence in the press realease at Boeing.com.
http://boeing.mediaroom.com/index.php?s=43&item=979
It says, “With the addition of the Korean Air order, Boeing has secured 110 orders for the 747-8. Thirty-two of the orders are for the 747-8 Intercontinental, and the remaining 78 are for the 747-8 Freighter.” (emphasis added)
That’s not too bad although I still think that 400+ seater market is a small market.
16. boeing investor | December 5th, 2009 at 09:39
Seems the A380 has 20% less orders compared to the 747-8 so far this year
Whats interesting is that KE ordered both jets in 2009.
I wonder who drove the bigger bargain - Airbus or Boeing??
17. Windtee.com® Aviation T-Shirt Art! | December 5th, 2009 at 09:59
Gorgeous aircraft… no doubt! KAL will surely benefit from this new fleet addition.
I expect to see it locally when it makes its scheduled arrivals and departures into and out of Kennedy Intl. NYC.
18. Leelaw | December 5th, 2009 at 13:39
“[The] 400+ seater market is a small market.”
Both of the OEMs’ VLA programs will likely fall of their own financial weight before the end of the next decade since the potential deliveries to fulfill this niche market will not be at a fast enough pace or in sufficient numbers to even approach recouping the combination of enormous cost overruns, already sunk and ongoing incremental (particularly in the case of the A380) development costs, as well as the additional financing costs associated therewith, in anything approximating a commercially reasonable amount of time.
19. Vero Venia | December 5th, 2009 at 15:47
18. Leelaw | December 5th, 2009 at 13:39
I am still wondering who will be the first to pull the plug.
20. boeing investor | December 5th, 2009 at 16:03
Leelaw, Vero Venia
Both great points.
If the A380 was in the position that the 747-8 is in, EADS would be delighted.
As it is, the 747-8, despite being several billion dollars is still a more tantalizing option because there are two models to spread the cost between with the very likely possibility of pax-to-cargo conversions.
The A380 has neither of those attributes and never will.
It is beyond a failure from a financial standpoint.
21. Vero Venia | December 5th, 2009 at 17:03
20. boeing investor | December 5th, 2009 at 16:03
Once upon a time, a great analyst said that there was not enough place for two in the 400+ seater market. Today there are two players, so whoever pulls the plug first will let the survival flourish.
If both players continue to play, this becomes a bizarre game of “The one who is bleeding the least is the winner.”
22. Clint | December 5th, 2009 at 18:33
Desperate times call for desperate measures. Just remember that when thinking of this “order” for this 40-year old jet that’s got a plastic surgery. LOL.
23. Cueious | December 5th, 2009 at 19:15
Would this plane make sense for either Cathy Pacific or Quantas.
24. Paulo M (Johannesburg, RSA) | December 5th, 2009 at 19:59
10. Paulo K | December 5th, 2009 at 04:09
”I don’t see that they would have won much of a concession, but….
Nothing much here, sorry - just the word won.
Won is the South Korean currency. About 50 to 60 years ago, at the start of the jet-age, South Korean was one of the poorest countries in Asia, the world. Today it home to some of the most impressive tech companies in the world. Samsung, LG. It is one of the largest ship building countries in the world - if not the largest still. And, Korean Air is the largest air freight transporter in the world. All this from a tiny little country of ~50 million. Great inspiration for my country - for the world.
When the 747-8I flies to these air shows in the near future, it’ll carry the colours of the customer. Then you’ll know who are Boeing’s great partners.
25. Vero venia | December 5th, 2009 at 20:15
24. Paulo M (Johannesburg, RSA) | December 5th, 2009 at 19:59 When the 747-8I flies to these air shows in the near future, it’ll carry the colours of the customer.
Paris Airshow 2011?
26. Curiious | December 5th, 2009 at 20:43
Paulo,
Are you suggesting that those carriers/countries that order and fly the 747-8i represent the true supporters of Boeing because the alternatives are not really warranted or because they are obliged to support the competitive rival despite efficiencies and price.
It is truly an amazing story about South Korea but I am trying to understand your last thought.
Thanks. I enjoy reading your many comments on this site.
27. Paulo M (Johannesburg, RSA) | December 5th, 2009 at 22:45
26. Curiious | December 5th, 2009 at 20:43
I’m not sure myself. Must be an observation on recent air shows. You’ll only ever see a specific Boeing airplane in Boeing house colours at an air show, say Paris, once - while it’s in Boeing hands. Then you’ll only see customer liveries.
Every air show that the A340-600 and A380-800 have been too - at least those I can remember - have been in Airbus livery.
So, Boeing likes to see their planes in customer liveries and interior fittings - like this last Dubai show. Maybe Airbus is trying to hard.
25. Vero Venia | December 5th, 2009 at 20:15
Yeah, probably - that’s what the schedule says..
28. Mike M | December 6th, 2009 at 08:43
>>>Desperate times call for desperate measures. Just remember that when thinking of this “order” for this 40-year old jet that’s got a plastic surgery. LOL.
Are you a dick or does it come natural to you?
Are the 747-8 customers buying a jet thats 40 years old?
Are customers buying the A320 getting a jet thats 25 years old?
Your comment is so retarded, you wouldnt understand a coherent rebuttal so its pointless. Go stand in the corner of your round, padded cell room, freak.
29. Paulo M (Johannesburg, RSA) | December 6th, 2009 at 15:09
24. Paulo M (Johannesburg, RSA) | December 5th, 2009 at 19:59
10. Paulo K | December 5th, 2009 at 04:09
Sorry, got carried away writing my name.
It’s Paula K, my bad
30. ikkeman | December 6th, 2009 at 18:36
Great news- definately didn’t expect this.
I Just hope it’s not an compensation order. I guess there’s a viable market for the in between 777/350 and 380 market.
31. keesje | December 6th, 2009 at 21:10
Congratulations to Boeing if this order gets realized.
They need more then 5 in 3 years though. On other sides, there is some discussion on the backgrounds, motivation and profitability of this order.
“The 747-8I is an incredibly good airplane, and will be, without a doubt, the pinnacle of airborne excellence!”
If that would be the case, it would have sold mre then 25 to airlines in 4 yrs (including an un precedented aircraft ordering boom).
Honestly how would you qualify an Airbus type that sold 25 ships to 2 airlines in 4 yrs ? “an incredibly good airplane, and will be, without a doubt, the pinnacle of airborne excellence” ?
I think Airbus is worrying to much. Contrary if Boeing sets up a supply chain and assembly line, builds 30 of this unique type and has to keep them in the air for 30 yrs, are they the winner ?
32. Paula K | December 6th, 2009 at 22:29
No problem Paulo, typo’s are all too commonplace
@ Keesje “if this order gets realized”
A contract has been signed and is on Boeing’s news too. If KE pull out, it will almost certainly incur penalties - so yep, the deal is realised on a contractual basis.
“If that would be the case, it would have sold mre then 25 to airlines in 4 yrs (including an un precedented aircraft ordering boom).”
The 747-8 has sold 110 between freighter/passenger models since 2005 to date with 1 cancellation if I’m right?
In the same time period, there have been 80 A380 orders with 27 cancellations.
So yes, during the boom years, you’d have expected the A380 to have done a lot better than a “40 year old” airplane
So much for “new tech”
33. keesje | December 6th, 2009 at 23:35
Folks love to combine the 8f and 8i sales. For good reason
Remember the 787-3? 43 firm orders. If an aircraft is not a good idea, Boeing knows & takes action. That’s why they’re still in business.
34. Paula K | December 7th, 2009 at 01:16
@Keesje
“Folks love to combine the 8f and 8i sales. For good reason”
of course, the same applies to the A330/340 which have less commonality together than the 747-8I and 747-8F
…and for good reason!
35. Paulo M (Johannesburg, RSA) | December 7th, 2009 at 07:28
31. keesje | December 6th, 2009 at 21:10
Actually - off the top of my head - Boeing has had a higher average order rate per year since they launched this pinnacle of airborne excellence.
For the 747-8, 110 orders in 4 years is 27.5 per year.
For the A380, what is it 200-220(?), at a rate of 22.2 to 24.4 per year.
Actually, the A380 has consistantly undershot average annual orders of the Boeing 747 since Juan Trippe shook hands with William Allen for a $525 million-21 plane order in December 1965. ~34 is the target.
I read your airliners initial post, and for what it’s worth - we’re all a bit surprised with this order. Certainly, I would have expected this after the Freighter flies - after the world had some time to see how good the plane’s wing is. Performance guarantees.
The 747-8 is a great aircraft. It prevents airlines from misusing a 550-seater when a 450-seater is more appropriate. Different aircraft.
36. Vero Venia | December 7th, 2009 at 07:47
31. keesje | December 6th, 2009 at 21:10
As everybody knows by now, the market for 400+ seater aircraft is a small market. For instance, between 2005 and 2008 there has not been any (or only one) delivery of 747-400 or bigger aircraft. The industry does not suffer from the lack of aircraft in this category. The A380 sales have been very slow lately and the 747-8i sales are slow as well. But that’s normal.
Before the passenger version of the 747-400 went out of production, there were only about one dozen deliveries per year. It seems that future deliveries of big and very big aircraft won’t exceed 20 aircraft per year, both 747-8i and A380 combined.
The truth is that very few routes need big and very big aircraft. Let’s face it.
If there is not much demand for big and very big aircraft, it is not be cause of the aircraft but it is because of the market.
Whilst there is obviously a market for 400+ seater aircraft, it is a small one.
37. Vero Venia | December 7th, 2009 at 07:50
Erratum:
please read “For instance, between 2005 and 2008 there has not been any (or only one) delivery of 747-400 or bigger aircraft. The industry does not suffer from the lack of aircraft in this category.”
In reality there have been 12 deliveries of A380 in 2008. In 2009 there will be about the same number. That’s roughly the number of deliveries of the passenger version of 747-400 before it went out of production.
38. Vero Venia | December 7th, 2009 at 08:06
By the way, there is an interesting spreadsheet in the link below.
http://www.anna.aero/european-airport-traffic-trends/
39. Chris Wallace | December 7th, 2009 at 15:03
Remember the 737-100? The 747-400ER? The 767-400ER? The various SR and D models of the 747 family?
Boeing sold 30 731s, 6 744ERs, 38 764ERs and a few score of the 747SRs and 747Ds. Boeing is willing to engineer models that meet the needs of their customers which no doubt helps them remain customers.
Boeing had no leverage on LH to order the 747-8, since the airline had chosen to go all-Airbus on the rest of it’s mainline fleet. I suppose that is why the order so sticks in the craw of some people. The 748 won LH over on merit alone and that annoys the die-hard Airbus Aficionados who believe Boeing was doomed the moment the A300 flew. And yet they can’t denigrate LH as some two-bit, third-world class airline because the rest of their fleet is Airbus. So they fervently hoped and prayed LH would cancel it as proof Boeing can’t compete with Airbus’ innate and all-encompassing superiority.
And now here comes KE throwing a spanner in the works by ordering the damn thing, as well. KE is a mostly Boeing airline, so of course the 748 only won that RFP on account of a mix of being a Boeing customer (though that didn’t stop Boeing giving it to them for pennies on the dollar, clearly) and President Obama getting on his knees before President Myung-bak and begging him to buy a few.
40. Mike M | December 7th, 2009 at 15:50
Chris Wallace has it exactly right. Thanks for that history lesson, one that Keesje & rednecks at Airliners.com are unable to swallow.
I also came across this:
http://www.flightglobal.com/articles/1999/04/14/50194/sole-a340-8000-may-be-put-up-for-sale.html
Perhaps Keesje can explain the basis for building the sole POS?
:):)
41. cheesy | December 7th, 2009 at 16:35
http://www.flightglobal.com/assets/getAsset.aspx?ItemID=28864
42. Erik Bloodaxe | December 7th, 2009 at 19:53
30. ikkeman | December 6th, 2009 at 18:36
Great news- definately didn’t expect this.
I Just hope it’s not an compensation order.
Oh, you mean like their last A380 order was??? I wonder how much they will get in compensation when Airbus tells them they won’t be getting their first airplane on time… again. MSN035 was supposed to deliver at the end of 2010, but there is zero possiblility of that happening. The A380 has been in production now for 7 years, and they STILL can’t build it right. They had better do some significant improvement on the A350.
Of course, Boeing better pull it’s head out of is ass on the 787.
As I’ve said before, both companies “leaders” are total crap right now. Mass firings ARE in order both in Chicago/Seattle and Toulouse.
43. Edd | December 7th, 2009 at 20:32
>>>cheesy | December 7th, 2009 at 16:35
http://www.flightglobal.com/assets/getAsset.aspx?ItemID=28864
Not quite as imprssive as the planned deliveries of the 787 in 2009!
Both manufacturers are having big problems with their major projects, as well as the economy.
44. Chris Wallace | December 7th, 2009 at 22:16
Even if it is a compensation order, so what? What do you think Boeing and Airbus prefer?
a) Handing a customer a check, which is pure money out that will never earn a return - and possibly be used to by a competitor’s product?
Or
b) Handing the customer a plane discounted to near-cost that might generate zero return at the handover ceremony, but will generate millions - even tens of millions - of dollars in ongoing revenue from all the ancillary sales necessary to maintain and operate that plane in revenue service for years/decades?
45. keesje | December 7th, 2009 at 22:39
Paulo’s may I inform you all A380 are passenger aircraft and most 747-8 freighters? Adding them up is non sense. Should we say A340s are succesfull because 1400 a330/340 are sold?
Vero Airbus, Boeing and GE expect at least 1000 VLAs in the next 25 yrs. What do you know that they don’t?
Vero would you ever publish a graph on 787 2008/09 productions forecastst too?
I would be nice to have the 747 soldier on for many more yrs. IMO this 5 ship Korean 8i order didn’t change everything..
46. Aotearoa | December 8th, 2009 at 01:06
45. keesje | December 7th, 2009 at 22:39
“Paulo’s may I inform you all A380 are passenger aircraft and most 747-8 freighters? Adding them up is non sense.”
Of course they are added up you Tosser, they are the same plane! Remember the still-born 3fatty Freighter? You’d be counting that for sure if it were worth building… but it’s not!
47. Mike M | December 8th, 2009 at 06:10
>>>may I inform you all A380 are passenger aircraft and most 747-8 freighters? Adding them up is non sense.
And?
Do you consider the A330-200/300 to be different from the A330-200F?
Airbus doesnt.
As Aotearoa says so eloquently - Of course they are added up you Tosser, they are the same plane!
48. Vero Venia | December 8th, 2009 at 07:37
41. cheesy | December 7th, 2009 at 16:35
That’s a very interesting chart. I sincerely think the ramp down is not due to production problems but it is because of faltering demand and vanishing financing source.
The first A380 was delivered in 2007, that’s two years ago. So, the only reason why deliveries go down is market demand.
The big question is still if the VLA market will slow down even further or it will grow.
49. Vero Venia | December 8th, 2009 at 07:43
43. Edd | December 7th, 2009 at 20:32
The 787 is not certificated yet. So it is normal that it’s delivery level is still at 0.
Obviously, a delay is never good as I mention in this post: http://wp.me/piMZI-az
The interesting thing is that the current world economic and financial crisis relieve the 787 program. Many airlines are reducing capacity. Many aircraft are now parked in the desert.
The economic crisis is likely the main reason of the A380 delivery ramp down. It is indeed dumb to produce aircraft that must go directly to storage.
50. Vero Venia | December 8th, 2009 at 07:49
45. keesje | December 7th, 2009 at 22:39
The latest CMO states only 740 very large aircraft to be delivered in the next 20 years. You should know that. If you don’t know that please go to my “Crystal Balls” here: http://wp.me/piMZI-bv
With the mutation of the air transport landscape, the future of VLA market is bleak. As you may or may not know, EU-US Openskies agreement entered into effect only in March 2008. More interestingly, the Japan-US Openskies agreement is not yet signed. Both countries are trying to sign the agreement only this month (December 2009). You can also read my post here: http://wp.me/siMZI-2020
51. JustSomeDude | December 8th, 2009 at 09:25
First 747-8F is scheduled to fly mid January, weather permitting… and the second one about a month later… all seems on schedule as far as I know…
AND 787 in possibly one week or two from today;s date, possibly, weather permitting and, and, and, (cross your fingers)…
52. Paulo M (Johannesburg, RSA) | December 8th, 2009 at 11:12
45. keesje | December 7th, 2009 at 22:39
May I inform you that you are correct. And if I may, let me inform you that for the purpose of discussions in this niche upper market segment, total units will count towards reducing that initial R&D. And, like I pointed out, Boeing has the higher order rate. What’s more, Boeing achieved that with a freighter. Isn’t that nice!?
On the Intercontinental, my feelings are as per the short time when the Airbus A340-600 was outselling the Boeing 777-300ER. Of course, feelings don’t sell 200-tonne-plus heaps of several million parts - especially when crafted so beautifully as a 747. So as you can understand, I’m really looking forward to the flight test of the Freighter Jumbo.
By the way, while we’re at it, what really is the bottleneck in the A380 production system currently? Is it still wires? Weight? The market maybe? We all know the SOB joint, and supplier issues (read poor supply chain oversight) put the brakes on the 787.
53. Vero Venia | December 8th, 2009 at 13:17
United buys smaller aircraft.
http://finance.yahoo.com/news/United-Invests-in-Future-prnews-2547784775.html?x=0&.v=1
QUOTE
“United expects to take delivery of the aircraft between 2016 and 2019; at the same time it will retire its international Boeing 747s and 767s. These 50 new aircraft will reduce the average seat count by about 19 percent compared to the aircraft they will replace, and by about 10 percent when averaged over the entire international fleet.
…
The new aircraft will open up new revenue opportunities for United as the smaller size, longer range, and lower operating costs of these aircraft allow the company to profitably serve a broader range of international destinations.” (emphasis added)
54. Vero Venia | December 8th, 2009 at 15:29
By the way, I posted another entry in my blog.
http://wp.me/piMZI-00
55. jacobin777 | December 8th, 2009 at 19:46
Vero Venia, the planned production rate for the A380 was actually at 48 planes per year. This is verifiable.
56. Vero Venia | December 8th, 2009 at 21:29
55. jacobin777 | December 8th, 2009 at 19:46
The planned production rate is not important. Which is important is the market demand. Is the market claiming 40 aircraft per year, or whatever the rate is, or is it claiming only about a dozen per year.
If the demand is only over one dozen of VLA per year then both manufacturers are in deep trouble.
VLA is about the market, it’s not about the aircraft.
Today, we still do not know yet what the trend is for the VLA market. But I think we will know a little bit more in two or three years.
57. jacobin777 | December 9th, 2009 at 20:16
Vero Venia, the planned production does affect a multitude of items-including (but not limited to)
1)Delivery rates.
2)Payments-which Airbus needs for cash flow
3)Financing for R&D/manufacturing.
#3 is IMHO is the most important. I doubt EADS/Airbus would have gotten additional financing (yes, a lot of investment on the A380 came from Airbus/EADS via cash flow, etc.) if investors knew what the delivery rate of the A380 would be. Airbus stated 4/month…even if it say 40/year I think many financiers would be fine-but with 10-15 (or lets just say even 20) deliveries/year? I doubt it. The ROI would be way too long.
58. dannyboy | December 10th, 2009 at 02:37
The hubris at Airbus is deafening. They belittled any attempt by Boeing to rework the venerable 747. Yet since Boeing introduced the 747-8 in Nov 2005, it has outsold the A380 110 to 72. That is 110 airframes that the A380 will never build and many analysts now say that the breakeven point on the A380 is well over 600 airframes. What a waste of taxpayer money.
59. Vero Venia | December 10th, 2009 at 08:33
57. jacobin777 | December 9th, 2009 at 20:16
You’re right with all the points you mentioned. But, those are only the consequences of something more fundamental that is the understanding of the market.
The planned production level has impacts on the three points you mentioned. That’s right.
But don’t forget that the planned production level should be based firstly by the perceived market demand.
You just don’t plan to produce more than the market can absorb.
It’s much simpler than you think. Don’t get caught by complex reasoning at this stage. The basic concept is simply matching the offer to the demand. Don’t go further.
I love simple things, it’s said in my post here http://wp.me/piMZI-sS
So, normally you build a certain amount of aircraft as direct function of the demand unless you’re not interested by making money out of your products.
I concede that it’s a difficult task to understand the market especially in a fast changing environment like the one we are in today. But you can find many hints out there if you open your eyes.
The gap between the planned production level and the actual demand is clearly the manifestation of misunderstanding about the market.
Read the market and the market reads you loud and clear.
Again, that is only my opinion.
On a similar subject, back in July I posted my “Crystal Balls”: http://wp.me/piMZI-bv
60. Paulo M (Johannesburg, RSA) | December 10th, 2009 at 19:23
Boeing has always believed that the VLA market ‘does not justify the an all new VLA - much less two.’ Thus their derivative approach for their 21st century VLA. Obviously, this has to be an outstanding effort. Hence my faith in the product.
Now, while I would rather see Boeing win, there are a few issues that get in the way of either Boeing or Airbus being right about the VLA market.
Firstly, Airbus has screwed up the A380 so badly, we can not make judgements on whether A380 orders are slow because of the Airbus A380’s current state of affairs or market demand. Only once Airbus has fixed A380 production will we know - and by then, the 747-8 will be a very strong factor.
The other thing is the ‘global recession’ - and over-hyped at that too - has severely damaged economies that may have been able to support it - and by extension, the airlines that may have required it.
And here again, Boeing strategy about not being able to predict the future, and offering a ‘low risk solution’ gives it an edge whether it is right or wrong.
I do think Boeing’s right.
61. Vero Venia | December 11th, 2009 at 08:09
60. Paulo M (Johannesburg, RSA) | December 10th, 2009 at 19:23 “Firstly, Airbus has screwed up the A380 so badly, we can not make judgements on whether A380 orders are slow because of the Airbus A380’s current state of affairs or market demand.”
Indeed, we have to wait two or three more years to see if the VLA market grows or shrinks.
Everybody hopes that in 2013, after 5 years of A380 production, there won’t be any industrialization problem anymore.
The first interesting point is both Airbus and Boeing will be delivering VLAs at that time.
The second interesting point is that both the 787 and the A350XWB will also be in production by then.
The third interesting point is that other new aircraft (CSeries, etc) will enter into the market during the same period too. Think about possible A320 and 737 re-engining!
There will be a fierce funding competition between those new aircraft.
2010 to 2015 will be a very interesting period. Too many new aircraft are entering the market in a too short period. Airlines will have much difficulty to absorb all those deliveries. It’s too much for the aviation industry, I think at least one aircraft program will meet severe turbulence.
The word you have to retain is “mothball“. It is possible that some programs will be mothballed in the coming five years.
Too much is too much.
62. jacobin777 | December 11th, 2009 at 19:54
Vero Venia :
You might be correct in your analysis of “perceived demand” but I think Airbus seriously missed the mark on that end as well. Sales of the venerable B747 was starting to tail-off as well. If you look at Airbus old GMF, they were well off in the North American market, as well as some other markets. Making a $10-$15 (now probably $25 billion) investment isn’t a laughing matter. If I was an EADS shareholder and bondholder, I wouldn’t be a happy camper.
We’re basically going TENTH of year of A380 sales (the A380 was officially offered in 2001)-200? Sorry, that’s just a POOR market forecast.
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