Emirates vs. Qatari Airlines 1

[rhodie]

I hold nothing but an interest in Aerospace, but I wanted to ask for opinions on the recent announcements by Emirates and Qatar Air to purchase new fleets from Airbus rather than Boeing.

What impact does this have on the future of Boeing? With the new JSF going to Lockheed/Martin, will Boeing find themselves out of work in the next decade? Is this loss of $24b something Boeing was predicting?

I hope not. Boeing has such a proud tradition, I hope they don't go the way of others like Douglas, Bell, Republic, or North American.

 

[astroclone]

Boeing still has plenty on it's plate to keep it going.
F-18, F-15, Delta rockets, 7X7 airliners, satellites, etc...
T

It's not going anywhere.

 

[IRstuff]

Boeing has made some serious mis-steps in the past few years, notably its bizzare decision to investigate a supersonic transport.

But, it indeed has plenty on its plate and many products and systems that will need the company to be around for a long time.

TTFN

 

[azertyuiop]

you also could see it the other way : Airbus recently lost a $20 billion contract on civil aircraft purchases to Boeing , buyer was Saudi Arabia , the neighbor of Qatar.

I assume the usual business practices for such high value ticket items will have played a role , like high level governement interferences , major maintenance aid packages not included in the official deal , delivery schedules that were more fitting , existing fleet composition etc etc.

Although I personally fear that Boeing has made some strategic mistakes concerning their civil aircraft development options , leading them to lost time + revenue = competitor advantages.

However , I saw on TV a documentary on the very hyped international rivalry between Airbus and Boeing and their respective futures. The diplomatic conclusion was the behind the sales of the planes , 30% of the components for each Airbus plane was imported from the US , and Boeing used 30% of european imports in his own civil aircraft lines , while the engines were evenly manufactured between both area's. The other diplomatic conclusion was that the next generation of aircrafts would be Supersonic Widebody's , so costly that international cooperation would be required between Japan , USA and EU , just to break even on development costs , Boeing nor airbus being able to fund the development of such a high tech plane.

So I suppose the future of aviation lays in cooperation between sake , bourbon and wine/beer/cherry/porto drinkers.

 

[jdsewell]

I just wanted to chime in that Airbus may be making the serious mistake. Several airline industry studies show that larger aircraft may not be the route of the future (granted, many of these studies may be Boeing PR). Additionally, how efficient has Airbus been as an aircraft development house? I always picture the video of the A320 plowing into the trees and the subsequent business that followed.
Development cost for such a large, complex aircraft could severely hurt their pocket book, although their respective governments will ensure their eventual success.
Don’t get me wrong, Phil has made his share of mistakes (I don’t like hearing the phrase “Chicago based Boeing”).
Just my "layman" 2 cents.

 

[jbknudsen]

I must agree with jdsewell on the concern of the continued manufacturing of large aircraft. Recently I saw a documentery on the makin of the A380. 1/3 larger than the 747. LAX (and others) are needing to modify terminals and airport configurations in order to handle the beast. That cant be a good selling point. On the other hand, in the last issue of Aviation and Space Technology, there was a breakdown of aircraft capacities and their loads. By far the category of aircraft that had the highest load percentage was the regional jets (50-90 passenger. The airbus A380 is a beatiful work of engineering and scientific art. Even thought the operating cost is less than the 747, will it matter when the regionals are scooping up all of the passengers?

As for Boeing, Alan Mulally (CEO of Boeing Commercial Airplanes) announced that the company had scrapped plans to build a futuristic Sonic Cruiser (I am guessing it would have competed with the A380) in favor of a 250-seat, fuel efficeint convertional airliner.

It looks like the little guys (Embrair, Saab, Etc.)may be knocking on the back door and taking a large piece of the pie, one crum at a time.

 

[rhodie]

Yeah, the SST proved to be a flash-in-the-pan, but I bet the idea doesn't die. Considering the Concorde and the TU-whatever (the soviet knockoff) were designed and flown in the 60's, it would have been really interesting to see what 30 years of technology could have done with the idea.

As far as that new fuel efficient 250 seater, Boeing is looking for places to build the manufacturing plant right now. The I think the plane is dubbed the 7E7 "Dreamliner". One of the cities I live near has presented a proposal to Boeing. I really hope they manage to secure the project, because nothing is better than seeing brand new beautiful planes rolling off the tarmac during your drive to work!

 

[azertyuiop]

airline development has always been a high risk high capital requirement venture. The JSF is nominaly going to lockheed , but I saw on the Dutch TV a few months ago a whole media circus about joining in or not in the overal development and fabrication costs of the JSF. The discussion centered on the local fabrication on some items of the JSF , to give local dutch engineers and blue collar workers work. They finally settled on an agreement with Lockheed : euro's against a piece of the pie in the total EPC project , so that the price per plane would go down , given the higher number of planes to be fabricated , even if the development and production had to be scathered internationally.

That 'US JSF project' seems to become pretty international , given that the Germans and British now are also discussing a similar agreement to replace all their combat aircrafts , if parts of it is totally subcontracted to their respective country , leading to a still decreasing cost per plane for everybody involved.

Airbus has never been intended to make any profit up until recently , when it was 'privatised'. It has been a financial black hole for most of his career , only meant at developping a new european integrated airspace industry from the ground , with local blue and white collar jobs in the end run , instead of unemployement benefits draining the treasury. The fabrication process dispersed over many european countries is a perfect example on how inefficient a production process can be organised , but 40 000 people over 10 european countries are now directly employed by Airbus , not counting all the subcontracted items that are also allowing 1000's other to have a living. Not a bad achievement , considering that they now have 50% of the worldwide civil aircraft business in their pocket , versus zero 30 years ago. The result of long term political decision making on a supranational level.

Airbus says that they now have over 125 firm orders for their new A380 superjumbo , orders being firm because already having received a formal down payment , which is an unicum in the civil aircraft history , given that the plane doesn't even exist and doesn't even have done a single test flight. The salesmen of Airbus must be pretty convincing , or the clients believing that the project must be technically doable and of absolute necessity for their future market requirements. I personally think it will be a good commercial succes for Airbus , given that the general manager stated that the break even development costs were estimated around 50 planes sold. Only the future will show who was right , but given from where Airbus did come , I wouldn't bet against it too rapidly.

 

[IRstuff]

I'll stake out the counter-position on the question of super-sonic transport. The trend in the last 20 years is:
> no new airports
> make existing ones do more work.

SST's and the like fundamentally cannot carry as many passengers, thus requiring more cycles on gate usage, but there are inherent overheads of gate usage such as re-stocking, re-fueling. Additionally, the overhead of circling and taxiing pretty much nullifies any significant gains in actual transport delay.

The A380 approach, while causing perturbations in jetway and terminal modifications does allow more passengers moved per gate cycle and more passengers moved per takeoff/landing.



TTFN

 

[azertyuiop]

TTFN , I think your view is the main reason behind the A380 project , besides an acknowledgement that the already 30 year old concept of the 747's , 747's that are now operating and aging , somehow must be replaced in the future. The logic then is , why not use a bigger aircraft on the lines already used by those jumbo's , to reduce the number of flights rotations , given the current conjestions occuring on many major international airports ?

Given the profit margins that boeing was earning per 747 ($20 million a pop) due to lack of competition on that segment , and the number of now operating jumbo's , the incentive to try to compete for Airbus must have been attractive in the final decision making process.

 

[harrisj]

The world's airlines are not in business to keep Boeing or any other US industry going. They buy whatever is best for their perceived needs - perceived because nobody knows for sure where civil aviation is going to be in 10 years time (or 6 months, come to that). So there's an arbitrary element in their decision to buy a particular type of aircraft.

I don't think any airline is going to buy a local product on the basis of national fervour - and if I was a shareholder I would be mighty peeved if they did.
Both Airbus and Boeing make good aircraft - they wouldn't be in business otherwise. Many US airlines fly Airbus; British Airways use mostly Boeing - this is normal and healthy and ultimately good for both companies.

Contriving a monopoly for Boeing may sound like good news for the US aviation industry but history tells us that competition keeps everyone on their toes.

I am interested in aviation but have no involvement with any aircraft manufacturer, airline or other agency.

 

[Icey]

Just to add a little info on this topic of Emirates and Qatar buying Airbus's, Qatar has obviously opted to stick to Airbus and thats also the way Emirates started out. They only had 2 Boeing 727's initially which they got rid off earlier on. Emirates has actually ordered about 26 Boeing 777-300's as well. So I think Boeing is gonna be around for a long time to come...

 

[jetmaker]

An additional note.

It is possible that Boeing bowed out of the super-large airplane market simply because they knew that there is simply not enough market for 2 such airplanes. So they decided not to risk the future of the company just to stay competitive.

But then again, Phil and the McD board has made some shortsight decisions in the past. Only time will tell.

 

[davidjh]

There are some very intersting books on this topic. One is "The Sporty Game". I was in the civil airliner business at an airframer. In planning the program a (in)famous curve that is generated is the one showing cash outlay and cash inflow versus time (over several years). The outflow curve had a pronounced deep trough - known in our company as the cash bucket. It was a powerful visual aid in showing the incredible amounts of money at risk

 

[FrenchCAD]

Even if I'm currently working on the A380, I have to admit that I hope it won't put Boeing away from business. It makes a very interesting "duel" and it pushes both companies to improve their products/services/etc

Boeing choosed the wrong way with its supersonic plane imo, eventhough I like those kind of aicrafts. They're not suitable for commercial use. They suffer heavy restrictions and cost alot.

Now, on both Airbus and Boeing visions of future market, I sincerly believe both visions are right. Both markets will develop, the regional market going faster though, as shown by most of the studies. High capacity long range travels (A380) come in a logical way when we think in terms of rentability and lowering of use costs. Plus, we have to admit that it has been proven more than once that a market can be "created". Look at the low costs airliners. They didn't exist a few years ago, and now they're taking their part of the cake. The A380 will make its hole.

Cyril Guichard
Mechanical Engineer