Take aways from Boeing press conference

Boeing's press conference regarding the launch of the B737MAX-7,-8,-9 gave me some thoughts. Aspire Aviation has some excerpts:

  1. “We think that this programme is going to be a terrific one for us, and we think it is going to be a terrific one for the customers and the one that continues the legacy of the 737 which started back in 1965.” -  “We believe very strongly that this is an airplane that is going to allow us not to just maintain market share, but one to allow us to grow our market share.” (Boeing CEO Jim Albaugh) - This is in stark contrast to what Boeing told us for two years - that airlines do not really want a reengined airplane, that the additional weight to due the haevier engines wil eat up most of the better SFC of the engines and so on.
  2.  “The engine that we are going to put on would be a LEAP engine from CFM, right now we’re looking at 2 different sizes: the 68 and the 66 inch fan blade. In either case we remain very confident that this is not going to require a lot of modifications to the gear; certainly with the 66 no modification; and even with the 68 a very low probability to have to touch the front gear.” - “There’re some advantages in the 66 that we like and there’re some advantages in the 68 that we like and we’re doing the final trade right now and we will make the decision in the next several weeks.”  - “We’re going to make this the simplest re-engine as possible.” (Boeing CEO Jim Albaugh) - What we can take away here is that Boeing will opt for the 68" fan, if they can find a way to attach the engine to the wing so that they do not have to touch the landing gear. If they can't find a way with the 68" fan, they will take the 66" fan.
  3. “Obviously we have contracts in place but at the same time we want to make sure our customers are getting what they need. And right now, they need airplanes in the 737NG it is available and it is available in great number through 2017 maybe even longer. I think most of our customers will stay with the NG.” - “There maybe some in the out years that they may want to take a hard look at the MAX and clearly we’ll sit down and do just that.” (Boeing CEO Jim Albaugh) - Now this is dangerous. Giving airlines a right to switch existing orders from the NG to the MAX could lead to a low number of NG's delivered in 2016 at least, maybe starting in 2015. Airbus so far avoided to let customers switch from today's A320 to the A320neo and their order book with the "classic" A320 is filled until well into 2016 today.
But now to something different. Boeing's CEO Jim Albaugh might be a good PR man, but mental arithmetic is obviously not one of his strongest personal strengths. He revealed that surprisingly, most of the five launch customers are from outside of the U.S. Precisely, Albaugh stated that 85% of the backlog are from non U.S. airlines. But wait - we know that AA with their provisional order for 100 aircraft is included in that - and 100 out of 496 is just over 20%, so we can consider AA to be 25% "non-U.S."...
On the other hand it means that Southwest is not one of the five launch customers. But I guess they will jump on board soon, so that the order book will swell soon...

1 comment:

  1. Thanks for the clarification on the 85% number, but when I read the entire paragraph:

    "While Boeing Commercial Airplanes president and CEO Jim Albaugh declined to name the airlines, he noted that 85% of Boeing's backlog is outside of the USA, adding: "And I will tell you that many of these customers we referenced this morning are outside of the US. Are they major carriers? They are the top airlines in the world that have committed to these airplanes."

    It sounds like the 85% number is referring to the 737 in it's entirety and not the MAX. So, it sounds like he's trying to say 85% of the 737s backlog are non-US customers?