Thursday, November 17, 2005

Boeing Slaps Airbus Around

( Full article )

[All emph. add.] Boeing announced Tuesday that it will build a longer version of its 35-year-old 747 in the wake of two firm orders for a total of 18 planes, which will be used as cargo haulers. The Chicago-based airplane manufacturer plans to use technology from the new 787 to make the old plane more fuel-efficient and quieter. But given that the new jet, dubbed the 747-8, will be built on an existing design, this is a relatively low-cost maneuver for Boeing. [...]

Contrast that with the new A380. The gigantic plane cost an estimated $10.7 billion to develop. Airbus has orders for 159 of the jets, but just to break even, it has to sell 250. And the market for jumbo aircraft has not been vibrant: Boeing hasn't sold a passenger version of the 747 for several years. [...]
The A380 may have the capacity advantage, but Boeing is claiming the 747-8's per-trip cost will be 22% less than that of the A380. Given the dire straits of the U.S. airline industry, many carriers may go with the low-cost, albeit older, option.

To be sure, Boeing's new 747-8 probably won't be very profitable for the company, but that's not the point. The idea is to weaken Airbus by limiting or even eliminating profits from the A380, and thus reduce Airbus' capacity to develop new planes...

By Brian Gorman (November 16, 2005)



Airbus is being run exactly as efficiently as one might expect of an EU vanity project.
C'mon, $ 11 billion to develop a commercial passenger airplane ?!?

The U.S. Space Shuttle only cost in the neighborhood of $ 30 billion to develop, in 2005 dollars.
The F/A - 22 Raptor programme used reverse-engineered alien technology to deliver an aircraft more than TWICE as good as the next-best 21st century fighter, the Eurofighter Typhoon, and ONE F/A - 22 can defeat EIGHT F - 15s at once.
Total cost, for development, production, and delivery of 180 of these Star Wars-class fighters: A mere $ 70 billion.

More to the point, Boeing is developing cutting-edge new technology, whereas Airbus is refining existing technology to get more from less.
While that's objectively A Good Thing, it does tend to position Airbus to be the very best manufacturer of horse-drawn carriages, in a dawning era of automobiles.

3 Comments:

Blogger Hey Skipper said...

The real question is which guess about travel patterns is correct.

Boeing's, which envisions higher frequency and lower passenger count, or Airbus, which envisions low frequency and high count.

At this point, it is anyone's guess, but my prejudice is that, based on how networks typically scale, there is a market for the Airbus model.

Just not a very big one. And it is made even smaller by some math not included in the article. All airports intending to accomodate the 380 must make exten$ive taxiway and terminal modifications. Presuming the number of passengers remain the same between the two options, how much more expensive does the Boeing option have to be, per passenger, to offset the millions of dollars per airport modification?

I, too, was amazed at the development cost. Particularly since, as far as I know, there is nothing in the least ground-breaking in the design. Granted, there is more to it than telling all the engineers to display their previously designs at 130%, but still ...

Doing a little back of the envelope math, a 250 jet breakeven point means the per jet dev cost is, roughly, $44,000,000 per airplane.

How much does a new 747-8 cost?

November 17, 2005 8:37 AM  
Blogger Oroborous said...

How much does a new 747-8 cost?

Apparently, the list price is around $ 275mm apiece.

Also:

"The 747-8 Freighter complements the existing 747-400 freighter family, which is the air-cargo industry's standard. Both models accommodate 3.1-meter (10-foot) high pallets, providing operators with maximum flexibility."

"The 747-8 also fits easily in today's aviation infrastructure, flying into more than 210 airports worldwide without additional, expensive infrastructure changes required."

"The 747 freighter family currently constitutes more than half of the world's total freighter capacity. Boeing freighters of all models comprise more than 90 percent of the total worldwide freighter lift."

"Boeing forecasts the need for about 900 airplanes -- passengers and freighters -- in the 400-plus-seat segment over the next 20 years. Boeing also forecasts that large widebody freighters (65 metric tons and above in capacity) will comprise 34 percent of the freighter market by 2024."

900 airplanes with a 400-plus-seating capacity, or the freighter equivalent, would cost around $ 300 billion at full list price.

November 17, 2005 2:09 PM  
Blogger Duck said...

But you have to consider that, besides being a vanity project, this is also, being Europe, an employment project.

November 19, 2005 5:41 PM  

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