Boeing selects 7E7 engines

Pratt left out. GE and Rolls get the contract to build engines for the 7E7.

There is now a nice twist: Boeing requires that the engines be "plug
compatible", which would allow a customer to replace a GE engine wth Rolls
should GE start to charge too much for spare parts.

(Although from Boeing,s point of view, this is probably to simply design to
reduce costs.

No orders yet placed. Boeing hopes to launch it this year, but analysts doubt
that the market will support this so soon since airlines are still seing
volumes lowere than pre 9-11, and thus still don't need extra planes (except
737s for Southwest).

On Wed, 07 Apr 2004 18:43:30 -0400, nobody wrote:

Pratt left out. GE and Rolls get the contract to build engines for the 7E7.

There is now a nice twist: Boeing requires that the engines be "plug
compatible", which would allow a customer to replace a GE engine wth Rolls
should GE start to charge too much for spare parts.

(Although from Boeing,s point of view, this is probably to simply design to
reduce costs.

No orders yet placed. Boeing hopes to launch it this year, but analysts doubt
that the market will support this so soon since airlines are still seing
volumes lowere than pre 9-11, and thus still don't need extra planes (except
737s for Southwest).

This shows the different situations Airbus and Boeing are in. Airlines
need 380s. Capacity restraints are holding back those airlines in the
market for it, and that is only going to get worse. Nobody actually
needs the 7E7, it might be nice if it did some of what has been
promised, but there isn't the same urgency there. Airlines like EK and
SQ know that they have to have larger capacity aircraft to meet demand
and not lose market share. Airlines like UA and AA may like a more
efficient smallish wide-body, but are they in any state order at the
moment?
--==++AJC++==--

AJC wrote:
market for it, and that is only going to get worse. Nobody actually
needs the 7E7, it might be nice if it did some of what has been
promised, but there isn't the same urgency there.

For Boeing, there is an urgency. Airbus is eating it alive because Boeing's
777 is too big and 767 too old. So Boeing had to come out with something
modern to compete against 333.

And yes, there is a market for planes in the 767-330 market.

The problem is that airlines that are betting on the smaller planes aren't
growing and still have an excess of aircraft.

To launch a virtual plane, you need airlines that are growing and need more
planes or bigger planes. Once that plane is launched, then you can enter the
replacement market because airlines know the exact financial advantages of
ditching older planes and replacing it with a new plane that has known properties/price.

On Thu, 08 Apr 2004 04:01:26 -0400, nobody wrote:

AJC wrote:
market for it, and that is only going to get worse. Nobody actually
needs the 7E7, it might be nice if it did some of what has been
promised, but there isn't the same urgency there.

For Boeing, there is an urgency. Airbus is eating it alive because Boeing's
777 is too big and 767 too old. So Boeing had to come out with something
modern to compete against 333.


Yes there is a definate urgency at Boeing, to offer a plane that
healthy, forward thinking airlines will order. They need to find
something that the likes of EK and SQ will see as invaluable to their
future.

And yes, there is a market for planes in the 767-330 market.


And currently only Airbus are serving that market.

--==++AJC++==--

AJC wrote:
And yes, there is a market for planes in the 767-330 market.

And currently only Airbus are serving that market.

But even Airbus is hurting in sales this year (so far). The market just isn't
there. And this is where the "starboard wing" Boeing is at a disadvantage with
the "port wing" Airbus. It is far easier for Airbus to go out on a limb and
engage in a project that is extremely risky and where a sufficient market
hasn't yet developped. For Boeing, it is much harder to convince Wall Street
investors that medium term lower profits due to cost of developping 7E7 will
be made up in the long term when airlines start to order the plane in large numbers.

The numbers may not be sufficient to warrant launching it, but for every month
they delay launch, it probably means one more 330 gets sold and less sales to Boeing.

On the other hand, once airlines think the 7E7 is likely to be built, they may
decide to delay 330 purchases to see what Boeing will have to offer. (just
like 747 sales dried up some time before official launch of 380 since airlines
wanted to see what the 380 would be like).

On Thu, 08 Apr 2004 09:49:29 +0200, AJC wrote:


This shows the different situations Airbus and Boeing are in. Airlines
need 380s. Capacity restraints are holding back those airlines in the
market for it, and that is only going to get worse.

Hmm... A couple of airlines, operating in an artificially restricted
market (the UK), or in very heavily populated areas (Tokyo), perhaps. But
that's too small a segment to pay back development costs.

Nobody actually
needs the 7E7, it might be nice if it did some of what has been
promised, but there isn't the same urgency there.

To the extent that airlines have been buying A330s, there seems to be a
demand. The 767 is past its prime. And this should be the soft spot
where the bulk of the demand will be.

Airlines like EK and
SQ know that they have to have larger capacity aircraft to meet demand
and not lose market share. Airlines like UA and AA may like a more
efficient smallish wide-body, but are they in any state order at the
moment?

But then the same thing is more or less true of the entire business.
There should be less of a need for white elephants today than before the
recession and the security/"terrorism" scare.

"devil" wrote in message
news
On Thu, 08 Apr 2004 09:49:29 +0200, AJC wrote:


This shows the different situations Airbus and Boeing are in. Airlines
need 380s. Capacity restraints are holding back those airlines in the
market for it, and that is only going to get worse.

Hmm... A couple of airlines, operating in an artificially restricted
market (the UK), or in very heavily populated areas (Tokyo), perhaps. But
that's too small a segment to pay back development costs.


You might not have been in Asia lately? Canada and AC is NOT exactly typical
for the industry.


Nik.

On Sat, 10 Apr 2004 05:33:41 +0800, Nik wrote:


"devil" wrote in message
news
On Thu, 08 Apr 2004 09:49:29 +0200, AJC wrote:


This shows the different situations Airbus and Boeing are in. Airlines
need 380s. Capacity restraints are holding back those airlines in the
market for it, and that is only going to get worse.

Hmm... A couple of airlines, operating in an artificially restricted
market (the UK), or in very heavily populated areas (Tokyo), perhaps. But
that's too small a segment to pay back development costs.


You might not have been in Asia lately? Canada and AC is NOT exactly typical
for the industry.

I think I specifically mentioned heavily populated areas and artifically
restricted market (i.e. behind the times) as an exception, didn't I?

Too small to support the white elephant's development costs, I suspect.
(OK, I know, taxpayers will presumably foot the bill of this sex/status
symbol. Not me, thanks god.)

"devil" wrote in message
news
On Sat, 10 Apr 2004 05:33:41 +0800, Nik wrote:


"devil" wrote in message
news
On Thu, 08 Apr 2004 09:49:29 +0200, AJC wrote:


This shows the different situations Airbus and Boeing are in.
Airlines
need 380s. Capacity restraints are holding back those airlines in the
market for it, and that is only going to get worse.

Hmm... A couple of airlines, operating in an artificially restricted
market (the UK), or in very heavily populated areas (Tokyo), perhaps.
But
that's too small a segment to pay back development costs.


You might not have been in Asia lately? Canada and AC is NOT exactly
typical
for the industry.

I think I specifically mentioned heavily populated areas and artifically
restricted market (i.e. behind the times) as an exception, didn't I?

Too small to support the white elephant's development costs, I suspect.
(OK, I know, taxpayers will presumably foot the bill of this sex/status
symbol. Not me, thanks god.)



I think your thinking on this subject is fundamentally flawed. The question
is not whether or not there is a market for the A380 but whether it will
create a market. What you likely will see is something similar to what the
747 achieved only on a much wider scale. It'll popularise intercontinental
travel further and hence taking part in the significant change of what air
travel is that we are (perhaps not in Canada!) witnessing at the moment.

Nik

On Mon, 12 Apr 2004 23:43:49 +0800, Nik wrote:


I think your thinking on this subject is fundamentally flawed. The question
is not whether or not there is a market for the A380 but whether it will
create a market. What you likely will see is something similar to what the
747 achieved only on a much wider scale. It'll popularise intercontinental
travel further and hence taking part in the significant change of what air
travel is that we are (perhaps not in Canada!) witnessing at the moment.

The 747 was a disaster to all parties involved. Until late in the game
when Boeing finally managed to get a postive cash flow from the white
elephant.

A 767 would then have been much preferable. It's largley the 747 which
produced the unbalanced business model that is now plaguing the industry.

Those airlines that are either still buying 747s or 380 are by and large
operating in areas where the prevailing conditions really belong in the
past when countries had a single gateway, flying was a status symbol and
so were big planes.

Hong Kong is an artificiality that's bound to eventually shrink to its
natural size when airlines diversify to the actualy destinations.
Starting with Shanghai.