Boeing’s Big Choices

Speaking at the JP Morgan Transportation and Defense conference today, Boeing Commercial Airplanes President & CEO Jim Albaugh recapped what was a mixed year for the company in 2009 alongside the challenges that lay ahead for 2010.

The biggest focus, as expected is what the company will do to the 737 and 777 families (click here for more) - both of which saw record deliveries last year. The setting of the 737 and 777 Advanced Development teams headed by Mike Bair and Lars Anderson point to a dual examination of midlife upgrades to both airplane families, as well as weighing up the possibility of all-new replacements.

Boeing had noted at last summers Paris Air Show (and on numerous other occassions too) a variety of options to enable the 777-300ER to be improved against the perceived threat from the A350-1000, which to date has suffered sales stagnation with little customer interest in the type while the 777-300ER is available.

With Airbus poised to make an annoucement on its new engine efforts for the A320 family, the failure of the CSeries to gain any serious market traction after six years on sale means that Boeing will not be rushing to make a decision on the 737 until the end of the year.

Image courtesy of Boeing

A summary of the call can be found below:

·         Aim to achieve BCA/DSS balance

·         Well into flight test programs (FTP) of 787-8 and 747-8F

·         787 will change the way people travel

·         Focus on execution, functional excellence and growth

·         Engineer leadership for better program oversight

·         Aim to avoid issues seen on 787 in future

·         Brought back icons of Boeing company

·         Focus on business development

·         Backlog circa 3,400 airplanes

·         Traffic growth continues to climb

·         Airlines back in the marketplace by 2012

·         787 gonna be a challenge (for 2010)

·         Aggressive FTP in front of us

·         Aim to fly 787s for 90hrs/week

·         Ramp up to 2.5 787s by Aug 2010

·         Ramp up to 10/month by 2013

·         Gonna make darn sure we meet commitments

·         787 not profitable enough for the investment made into it

·         Improving productivity will help profitability

·         Decoupled FTP for 787 and 747-8F

·         Staffed for both programs

·         Didn’t feel it got enough value for potential orders in 2009

·         737 & 777 foundation of BCA

·         737: soon be crowded marketplace – no longer a duopoly

·         Do we re-engine, do we go with all new airplane?

·         Do not want a “me-too” airplane (in 737)

·         Focus on value, not price

·         Talking with all engine makers

·         787 technology scaled down & applied to 737

·         No 737 decision at Farnborough

·         Want to be in first place

·         Have to deliver airplane that delivers more value

·         Guarantee that wont happen (i.e. exiting the single aisle market)

·         Need to address ageing workforce

·         Good variety in model mix

·         737 Sky Interior debuts with FlyDubai in October

·         777 – looking to improve fuel burn, MZFW

·         Looking at options for engine capability for Rolls-Royce/General Electric (on 777)

·         787 – strong market demand

·         More confidence to meet guarantees for customers

·         Good info flow between 787-8 and 787-9

·         Working to take weight out of 787-9, further block point improvements on 787-9 to cut weight

·         40% of flutter tests completed

·         Achieved Mach 0.97 in a dive – “solid as a rock”

·         Remained pressurised at 6,000ft when at 40,000ft

·         Month-and-a-half of contingency in FTP

·         ZA003 flies this Sunday (March 14^th 2010)

·         747-8F – three weeks late into FTP

·         First flight of third 747-8F on March 15^th, 2010

·         First flight of fourth 747-8F on March 17^th, 2010

·         747-8F got both range and payload

·         Decision on 747 production rate this summer

·         Remains sold out through 2012

·         777 rate decision due next month

·         Execution on 787 and 747-8F

·         Retired risks, lots of risk still ahead

·         Solid teams in place

·         Both 737/777 gonna be under attack

·         Looking to expand margins on 787 and 747-8F

·         Rebuilding market leadership

·         Aim to deliver more airplanes in FY11 than Airbus

·         Anticipate 777 orders in near term

·         Rate change effective in 2011

·         Need to be able to stay at higher rates

·         A350 will be a good airplane

·         Lots of good years of 777-300ER production

·         Better turnarounds on 787 in FTP

·         Type certification due to allow engineers/FAA on board during certification

·         Not many customers want to defer orders

 

 

 

Tags: 737, 777, 787, A320, A350, Airbus, Boeing

14 comments March 9th, 2010