New 777 Depends On 787 Success

Until Boeing shows tangible signs of progress on the 787, any notion that a new 777 replacement could be tabled will remain on the backburner for now - but talking about it pressures Airbus and its progress on the A350XWB family too.

 

The biggest customer for the Boeing 777, and incidentally the only customer thus far to have owned and operated all six variants, Emirates has been vocal for a number of years now about nudging Boeing in the direction of either an updated 777 or an all new replacement.

 

Before that can happen, Boeing has numerous hurdles it must overcome in the next 2-4 years before it can actively consider what it wants to do with the current 777 family. Part of Boeing’s strategy relates directly to the A350-1000XWB. With Airbus giving no indication about operating empty weight of the airplane, Boeing cannot determine exactly just how much of a competitive threat it could be for a number of reasons:

 

·         A350-1000XWB orderbook is anaemic – just 75 orders from 4 customers

·         A350-1000XWB offers just 11% greater seating than A350-900

·         A350-1000XWB cannot haul both freight/passengers over comparable distances/existing airline mission profiles covered by the 777-300ER

·         A350-1000XWB is largely weight/range restricted due to lower-thrust rated engines, meaning high gross weight variants are off the table without a new wing and engine

·         A350-1000XWB unable to operate at hot/high airports year-round due to weight constraints as fuselage/wing combination are a stretch of smaller model, lower optimisation, unable to grow further

 

To that end, Boeing’s ongoing saga with the 787 has proven to be a perennial drain on resources across the company. Engineering resources are stretched (and that’s probably why the 747-8F first flight was delayed, click here for more), the supply chain is nowhere near stabilised, the acquisition of the Charleston, SC, site further erodes its cash balance coupled with continuing compensation payments being made to customers for the delays to the 787. Throw on top the 777 rate cut due just eight months from now, revenue and income will become more marginalised – that’s before we factor in the costs that will inevitably be incurred by the new KC-X tanker competition.

 

The steps Boeing has taken with the 737 and 747-8 families is probably not one that it will take with the 777.

 

Just as the A350-1000XWB is at the upper end of its market, the 787 cannot grow beyond the 787-9 model without either new wings/engines or a significant range reduction.

 

General Electric will likely again be a sole-source provider of engines, but the key to getting any new 777 to market depends on where Boeing aims to position it vis-à-vis the 787, A350XWB family and ultimately whether the 747 makes way for a large twinjet.

 

The one key component that will become the deal-clincher is Boeing’s experience in composite materials for major aero-structures with the 787. There is a widespread belief that Airbus’ positioning of the largest A350XWB between the current 777 and 747-8 families leaves it open to losing market share the way the A340 did when the 777 arrived – a bigger, more capable long-range airplane solution.

 

All of that remains to be seen, however.

 

While it’s good that customers are indeed talking about replacing the biggest twin-engine airplane family today, the focus for Boeing has to be in restoring faith in the 787. No talk of a “second line” or presuppositions about what Emirates wants will change the fact that until it flies, Boeing has a long way to go before customers can expect an all new 777.

 

They may have been patient thus far, but as history shows, seat count per airplane continues to fall –then the current 777 may well be usurped by the A350 family – the only way Boeing can remain a competitive player is by producing some long overdue results on the 787 to show that it’s still in business and means business.