BOEING OUTLINES THE "VALUE" OF ITS 747 PLANS
FARNBOROUGH, England, Sept. 2, 1996 -- The president of Boeing Commercial Airplane Group today launched a new version of the 757 twinjet and announced that the company is offering for sale two new models of the Boeing 747.
Ron Woodard hosted a press briefing at the Farnborough Air Show near London and said that the Boeing focus on delivering value continues to be its biggest competitive advantage and the guiding principle when it comes to developing new or derivative Boeing airplanes, including the stretched 757-300 and longer-range and higher-capacity 747s.
"The choice of which airplanes to build and when to build them is not made by Boeing alone," Woodard said. "The marketplace, driven primarily by how our customers perceive value, determines whether derivatives of current airplane types, or entirely new designs, best meet future needs."
He said that "the new 757-300 adds an important new member to the 757/767 family -- one that offers operators significantly lower operating costs while retaining the important features and capabilities that have made the 757 such a popular airplane."
The new 757, which will offer about 20 percent more passenger capacity than the 757-200, was launched on the basis of a proposal acceptance from German holiday airline Condor Flugdienst for up to 24 airplanes.
Woodard noted that Boeing forecasts the need for nearly 16,000 airplanes over the next 20 years, worth more than $1 trillion. Of that total, he said large airplanes (400 seats and above) account for 18 percent of the total in terms of dollars and only 7 percent in terms of units -- far less than either the "single- aisle," 737-757 market or the "intermediate twin-aisle," 767-777 market.
"A lot of people think that the future belongs only to big airplanes," Woodard said, explaining that the single-aisle and intermediate twin-aisle segments each account for 41 percent of the future market in delivery dollars. "This ... puts the market into perspective.
Woodard pointed out that the Boeing market forecast for 500-seat airplanes and above is in line with estimates from other aerospace companies, while the Airbus forecast is about twice as large.
"A few years ago, when we looked at the superjumbo called the Very Large Commercial Transport, we estimated the non-recurring cost to be anywhere from $12 billion to $15 billion," Woodard said. "We concluded that there simply wasn't a large enough market to justify that size of investment. We don't think much has changed since then.
"Our experience is that the cost to develop derivative airplanes is substantially less than the cost of all-new airplanes," he continued. "Even so, the non-recurring costs to do major derivatives of our 747 -- including development expenses and investments in tooling -- will be in excess of $5 billion. It's hard to imagine that Airbus can do a totally new airplane for (what they say will be) an $8 billion investment."
For about a year, Woodard said Boeing has been working with more than a dozen airlines in preliminary design and configuration studies of two new 747s to join today's 420-passenger 747-400. The effort has produced what Woodard called "double derivatives," combining the benefits of the 747-400 with the systems and some of the interior features of the new 777. The results are two airplanes now being offered for sale, including:
* The 747-500X, an airplane capable of carrying 462 passengers up to 10,000 miles -- 1,600 miles beyond today's 747-400 -- with 10 tons-plus of extra cargo capacity.
* The 747-600X, with seating for 548 passengers and a range of about 8,900 miles.
"The 747-500X and -600X meet all future requirements that we can identify," Woodard said. However, he added, if a need develops for an even larger airplane, Boeing would be well-positioned to meet that need with a larger derivative called the 747-700X.
"We could 're-body' the 747-600X with a wider fuselage, while retaining the existing wing, systems, engines, struts and landing gear," he explained. "The 747-700X would carry up to 650 passengers and have a design range equal to that of the 747-400."
He emphasized that Boeing is focusing its efforts on developing the 747- 500X and -600X. "We've had a very positive response in our discussions with several airlines and we expect to have some decisions very soon."