…Everybody Has One.

Hindsight, foresight, predictions, wrongs, rights and all that falls in between.

You may have read a 2005 Seattle Times column, in which a view on the impending demise of Boeing Commercial Airplanes was depicted:

“Boeing’s family of jets is dominated by the 737, whose basic design dates to the 1950s. The 747, brilliant as it was, is old and tired. The 777 is a great jet but struggles against the A330-A340 family market segment. The jury is still out on the new 787, and will be until well after this plane enters service.”

The context of this piece was that Boeing should keep an eye over its shoulder because Bombardier was about to take the number 2 airplane manufacturing spot away from Boeing.

We all know how that turned out. And as far as the jury being out on the 787, I think that jury has long ago returned its verdict loud and clear - and long before EIS, I might add. In fact all of these notions proved dead wrong.

One only needed to look a few months after this premature eulogy was published to see that the “tired” 747 awoke to send the ailing Airbus A380F to the cemetery, and the 777 “struggled to cope” with a record 153 sales in the 12 month period for 2005.

Thats even despite the fact that Airbus has shaved millions off the A330 and A340 prices and has had to offer the former as a temporary substitute to the likes of Aeroflot and Singapore Airlines before they (ever?) take their A350 deliveries nearly a decade from now….loss-lead deals galore! While the backlog may look sexy, the accountants must be scratching their heads wondering when Airbus will actually realise that profitability, not market share is what counts!

“The success of the 777 is snowballing, and the A340 is spiraling downward” said Richard Aboulafia.

“You will see a move away from four engines to two” Robert Milton, chairman and chief executive of Air Canada.

Image courtesy of Boeing.com

Moving to the 737, this airplane proves the “survival of the fittest” theory by winning orders all year round, every year. And the “verdict” on the 787 is overwhelming. It’s the airplane that the market wants. Not the A350.

The Dreamliner is the fastest-selling airplane in the history of commercial aviation. Period. Even with the revised planned first flight, the 787 still secured 33 new orders since the July 8 Premiere and orders currently stand at 710 (as at time of writing) and has had a bumper sales year so far in 2007.

While it’s a given fact that whatever prediction is made today, the future will always remain open to the possibility that our analysis will either be short lived, or short on the reality of the marketplace.

For three years, Airbus’ one-trick pony has carried their sales forward in the absence of a widebody offering that matches the market requirements in terms of timing and size.

Interestingly, the predictions Airbus has made in respect of the 2 year delayed A380 become more questionable after reading this article. Here’s a good quote below:

As airlines sacrifice seat numbers for passenger comfort on Airbus’s new A380, airports may not see quite the strategic benefits they had hoped for from the double-decker jetliner.

The A380 was sold as a plane able to seat 555 passengers, but early customers such as Singapore Airlines and Qantas Airways are planning to carry way below this level as they look to maximise space for big-spending, premium-class passengers.

That’s not ideal for hub airports such as London’s Heathrow and New York’s John F. Kennedy. They, and others, have invested huge sums into accommodating the A380, based on the assumption it will help them expand passenger traffic without adding to congestion or breaching limits on aircraft movements.

Initial A380 commercial flights - which are due to start late this year - won’t be carrying the 35-40 per cent more passengers than Boeing 747 aircraft - as Airbus had envisaged.

This message was echoed almost a year ago by British Airways CEO Willie Walsh.

British Airways chief executive Willie Walsh has warned that the Airbus A380’s arrival at its congested London Heathrow hub next year will hampe rather than help the airport’s runway capacity crisis due to the approach separation distance required for the ultra-large airliner.

[...]

“Even if separation distances are eventually reduced, the likely slow growth of A380s in service will postpone any meaningful capacity advantage until well into the next decade.”

Airbus itself questions the A380 market capability with the fact that billions of dollars will be required to upgrade airports to accomodate this leviathan. Given that breakeven for the model has risen beyond 420 frames, its pretty evident that this prediction was awry from the outset. The current 747-8I fares no better, even though its a low risk derivative of a tested airframe.

For the A380, the risk is bigger - take a look at what Richard Aboulafia has to say about it: Clicky!

“It’s probably the single biggest mistake in aviation history. Even if the development program weren’t technically botched, you still have the problem that it’s just the wrong plane.”

So timing is important, as we already know. Randy Baseler gave us this journal entry prior to his departure.

Image courtesy of Boeing.com

Even after he went, Randy B and Randy T have got it right and the product line up at Boeing Commercial Airplanes shows that the strategy of tearing the skies apart for direct travel is what people want. Why else has Airbus gone down that same road with the A350, even though it brings next to nothing new technologically to the arena?

With Airbus mapping 2008 as the year to rectify the glitches on the A380 and starting to deliver the mammoth airplane, just how much (or otherwise) we will see in the A350’s development will be key to how Boeing responds with the 777.

Whatever prediction is made, the golden nugget is the narrowbody sector. There will be a plethora of orders for a 737/A32X replacement. What ultimately defines the success between the two depends on whether the Boeing vision via the 787 or the Airbus vision with the A350 proves to be the one the market seeks.

Some predictions are right, some are wrong.

Predictions are pretty similar to opinions.

In the immortal words of Clint Eastwood : Opinions are like assholes - everybody has one.

7 comments September 19th, 2007