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25 February 2005

Luck 'o the Irish

St. Patrick's Day may still be a couple of weeks away, but we've already found our four leaf clover - some really fantastic news coming out of one of the world's leading low-cost airlines.

Ryanair Chief Executive Michael OLeary with brand new 737-800 last October in Seattle photo

Ryanair Chief Executive Michael O’Leary was all smiles when he took delivery of a brand new 737-800 last October in Seattle. Check out his t-shirt.

Ryanair, based in Dublin, Ireland, has agreed to purchase up to 140 Next-Generation 737s, one of the largest orders ever for this airplane. We happen to think the 737 has played a big part in Ryanair's success in Europe. And this agreement means that this remarkable airplane will continue to be a lucky charm for Ryanair long into the future.

This news just reconfirms two things for me:

  • The history of successful low-cost operators starts with the 737.
  • The most successful airlines in this segment continue to prefer the 737.

You may have read that Airbus is claiming that they're the new standard in this market segment. Let's put that into perspective. Take a look at the top-20 successful low-cost carriers around the world as of the end of 2004. Out of those, 14 are all-Boeing 737 operators. Only 3 are exclusively A320 operators.

Boeing and Airbus use by low cost carriers Chart

The 737 is preferred by the large, successful low-cost carriers. This is a snapshot of the market at the end of 2004. All-737 operators shown in blue. All-A320 operators shown in red. The others operate mixed fleets or have indicated that they will.

You'll see that of all the airplanes operated by the top-20 low-cost carriers, 86% of them are Boeing 737s. And even if all the airplanes on order by these 20 carriers at the end of 2004 were delivered today, the 737 would still have about 73% of the share of the low-cost market. And that doesn't even include the exciting order from Ryanair this week.

What's interesting about this story is that the A320 was not designed specifically for the needs of the low-cost model. A320s are heavier, have higher operating and maintenance costs, and have slower turn times than 737s. And because the A320s don't have the value that the low-cost market demands, Airbus has had to discount their prices significantly.

On the other hand, since Southwest Airlines helped Boeing design the Next Generation 737 family, all of these airplanes have been designed with the low-cost carrier in mind.

That's why I like to say that in reality, the low-cost business model is the 737. And the 737 is the low-cost model.

23 February 2005

Talking airplanes with Peter Jennings in Renton

Last week we had a wonderful opportunity. ABC World News Tonight, one of the top television news programs in the U.S., sent its anchorman, Peter Jennings, to Seattle for a couple of days of live broadcasts. For a report about Boeing we hosted Peter and his news crew at our 737 assembly complex in Renton, Washington for most of a morning.

ABC Anchorman Peter Jennings at Boeing photo

ABC News and anchorman Peter Jennings in Renton, WA on February 17. That's Carolyn Corvi in the middle, Jennings on the right, and yours truly on the left.

Along with Vice President and General Manager of 737 Programs Carolyn Corvi, I spent well over an hour with Mr. Jennings, going through airplanes - literally - and walking the line. I have to say it was great to have someone of the stature of Peter Jennings here to see how we build airplanes. He and his ABC news crew were a delight to work with. I got the impression they were truly interested in our story. Jennings wasn't just going through the motions. He actually got into it - at one point he crawled into the cargo bay of one of the airplanes with Carolyn to have a chat.

The newsman was very intrigued with the people story - the employees - and how families seem to go back with Boeing over the generations. In a conversation not included in the final broadcast, Jennings asked Carolyn whether it was true that working at Boeing tends to run in the family. She told him that's very true for many employees. In fact, Carolyn told him, her husband works at Boeing, and so did her Dad.

We spent a lot of time talking about what we call "lean manufacturing." It's a process put into place several years ago in Renton, and it has resulted in the shortest final assembly time of any large commercial jet. The Next Generation 737 is now assembled in 11 days - a 50% reduction since lean techniques were introduced in 1999. We toured the entire length of the 737 assembly line, where the aircraft moves from one assembly team to the next at the steady pace of two inches per minute. Jennings commented to Carolyn, "You must be really proud of what you've done with this production line." Carolyn's reply was interesting. She said, basically: Well it's not me. They did it - the employees. The lean techniques served to enable people to do all these things.

ABC Anchorman Peter Jennings with Boeing employees photo

Peter Jennings chats with employees on the 737 assembly line.

And aside from all the tech stuff, Peter Jennings was really interested in how the people at Boeing feel about being on the front lines in the highly competitive commercial airplane business. At one point the ABC News anchor asked a person on the line, "When some airline buys Airbus instead of Boeing, is that felt on the floor?" The individual didn't miss a beat. He said, "We take it personally, we certainly do."

But what really struck me was when Jennings asked the man whether it was just a matter of preferring airlines to all "buy American." No, he said, "We prefer them to buy the best product. We think we have the best product."

I couldn't have said it better myself.

18 February 2005

The Worldliner on a roll

On Tuesday, we held a small party for about 5,000 of our closest friends - employees, airline representatives, suppliers, international media, government and community leaders - at the plant up in Everett, WA. I guess you could call it a coming-out party for the 777-200LR, a new airplane we've dubbed "Worldliner."

The Boeing 777-200LR Rollout Party photo

A serenade for the Worldliner. About 150 school kids from the Evergreen Middle School in Everett, WA and the Snohomish Children's Choir (Snohomish County, WA) helped kick off the festivities.

It's always an exciting time when we roll out a new airplane, because it doesn't happen all that often in our industry. And it's an especially exciting time for our employees because they're the ones who build these fabulous airplanes.

Celebrating the 777-200LR Worldliner is also an opportunity to thank our suppliers - GE Aircraft Engines, for example, who designed and built the phenomenal propulsion system that will take the Worldliner between just about any two cities on the globe. An exciting time too, for our launch customers, Pakistan International Airlines (PIA), and Taiwan's EVA. We especially thank them, because without them we wouldn't even have had this event.

It was really a fantastic day. It began for me with a morning meeting with a conference room full of media from around the world. It was great to be with folks I consider to be industry colleagues - some of whom are familiar faces I get to see quite often during my travels throughout the year. I never fail to learn something as we share views and ideas back and forth.

And I think I detected a bit of excitement on their part as they learned about the Worldliner. This is an airplane that takes you places that in the past you could only travel to with one or two stops along the way. Now you can go virtually anywhere non-stop from point to point.

The 777-200LR is the only airplane that can do this, flying farther than its nearest competitor, the A340-500. And that's not all. On a route like Los Angeles to and from Singapore, for example, the Worldliner can carry 21 more passengers and 9 to 11 tons more cargo, all while saving more than 20% in fuel. The innovative overhead crew rest areas free-up capacity for as many as six LD-3 cargo containers, something the A340 cannot match.

The Boeing 777-200LR Rollout Party photo

The 777-200LR bathed in multi-colored lights. Launching a new airplane requires a lot of people coming together, and that spirit was in full view at the roll-out ceremony on February 15

But that's airline stuff. I'd like to return you to what really counts to the passenger: comfort and convenience. This is a faster airplane, so you'll get where you're going sooner. You'll have more access to non-stops because of the Worldliner's range. And because it offers wider seats and wider aisles, you'll have more comfort on board than Airbus can provide. You'll get a chance to see for yourself next year, after we deliver this first airplane to Pakistan International Airlines in January 2006.

Meantime, there's some really cool stuff coming up this year with the 777-200LR. The first flight is scheduled for next month, the start of a seven-month flight-test program. So keep your eyes to the skies. Who knows, you may soon be seeing the Worldliner in your part of the world.

14 February 2005

Going the Distance

Today I'm delivering a Valentine to the newest member of the 777 family, the 777-200LR (Longer Range).

The first Boeing 777-200LR rolls into the paint hangar for a new look.

The first 777-200LR rolls into the paint hangar for a new look. The new airplane makes its debut on Tuesday, February 15, in Everett.

You'll be seeing a lot of her in the days ahead as we introduce the world to the longest-range commercial airplane ever built. She will go from here to just about anywhere.

The airplane waiting to be unveiled in our factory in Everett, WA is capable of connecting virtually any two cities in the world. And when we roll her out tomorrow afternoon it's going to be the start of a beautiful relationship.

Really, I should say many beautiful relationships -- non-stops between city pairs - that up until now were just the stuff of imagination. No more long waits in an airport you didn't want to visit in the first place.

The thing that's so special about the 777-200LR is that it gives airlines the additional flexibility to serve non-stop routes (in 777 comfort) that passengers are asking for.

Boeing 777-200LR photo, Going the Distance: The 777-200LR

Going the Distance: The 777-22LR.

Try these city pairs on for size:

  • Singapore - New York
  • Perth - London
  • Los Angeles - Bombay
  • New York - Auckland
  • Chicago - Sydney
  • Taipei - Miami
  • New York - Karachi

That last city pair is a reflection of our first 777-200LR customer, Pakistan International Airlines. It's amazing the possibilities this new airplane opens up.

Just briefly, the 777-200LR can do it because of larger and more powerful engines, and up to three optional fuel tanks in the aft cargo compartment. With a full complement of 301 passengers, this airplane will have a range of 9,420 nautical miles (17,446 kilometers), the longest range of any commercial airliner. That's truly "Going the Distance."

Boeing 777-200LR photo The 777 longer-range airplanes offer overhead crew and attendant rest areas in the fuselage crown above the passenger cabin.

Boeing 777-200LR photo The 777 longer-range airplanes offer overhead crew and attendant rest areas in the fuselage crown above the passenger cabin.

Needless to say, the 777-200-LR can fly farther and faster than the A340-500, and can carry more passengers and cargo, all the while consuming 20% less fuel per passenger. This is good for the airlines and good for the environment.

Find out more about the 777 family by clicking here.

And you can get a look at the dimensions of our 777 longer range airplanes here.

We think our customers are going to want airplanes with more range and with the ability to connect new city pairs with non-stop flights. The 777-200LR does that and allows airlines to carry more cargo on those long-haul routes, too.

Well, now it's time to get ready for the festivities. After the roll-out I want to talk about some world-record distance flights we have planned for this new airplane. It's going to be an exciting year around here, that's for sure.

11 February 2005

Advancing the "Queen of the Skies"

One of the big questions I hear on the street these days is: What's happening with the 747 program?

It's a fair question.

The 747 is an awesome flying machine. They don't call her the Queen of the Skies for nothing. And she is such a popular airplane, such an icon, that people are always asking what's happening with the original jumbo jet. I totally understand.

Boeing 747 photo

The 747. Still the Original.

So, as you may have heard, yes, we have received interest from customers in an advanced version of the 747.

Indeed, the very large airplane segment has had a lot of attention in the news, too, recently, sparking an interest in what Boeing's plans are in this area. Obviously, the "reveal" of the A380 last month generated a good deal of this street talk.

Now, I've said it before, and I'm sure I'll say it again: the A380 is a very big airplane filling a very small need. We see a global market for only about 270 passenger airplanes the size of A380 (500 seats or more).

And what about 747-size airplanes (400-500 seats)? This too, is a relatively small market of about 270 passenger airplanes.

Fortunately, we already have a really terrific airplane platform with the 416-seat 747-400.

So, starting with that platform, the 747 Advanced would incorporate new technologies, and with a stretch of about 11.7 feet (about 3.5 meters) in the passenger version, it meets the needs of our airline customers for a 450-seat airplane.

[The 747 Advanced Freighter would add 17.3 feet (5.3 meters) in length and 16% additional cargo volume.]

What's advanced about it? Well, the breakthrough technology of the 787 engines for one thing. Seating capacity of 450 passengers (the only jetliner in the 400-500 seat market) is another. Then there is a range of 8,000 nautical miles (14,816 km). Cruising speed of 0.86 Mach. A modified wing. An upgraded flight deck. And some very nice interior enhancements.

Boeing 747 photo

The 747 Advanced passenger version: “stretched” in two bands for a total extension of 11.7 feet.

It's a 747 that's more fuel efficient, has lower operating costs, and that is more environmentally friendly than the A380. An airplane, incidentally, that meets future noise regulations -- specifically the QC2 noise standard at London Heathrow.

So, back to that question at hand. Is it going to happen?

Unfortunately, my crystal ball is offline today, but I can tell you this: We like the airplane. We have customers who like the airplane. And we're out talking with those customers right now.

The short answer then is, we expect to make a decision on the 747 Advanced by mid year or so. And to follow through on that, assuming the 747 Advanced program is launched sometime this year, that would allow for entry into service in 2009.

The market will decide the path of the 747. The fact is, we'll be building the 747 as long as we have customers who want to buy it. Last year we logged 10 new orders -- as many as the A380. It was a good year for the Queen of the Skies.

And here's to her having many more.

04 February 2005

737NG: The Next Generation for Japan and the world

Woke up to some really terrific news this morning. Japan Airlines (JAL) has decided to introduce the Boeing 737NG (Next Generation) airplane to its domestic network. This is a great day for us and for JAL's passengers. It's really something to celebrate.

Boeing 737 photo

The best-selling 737NG in our new livery.

Our customers in Japan appreciate the strength of our airplane -- there have been two big contests between 737NG and A320 in this market in the past couple of years, and the 737 has won them both.

JAL has been operating 737s for some time and saw the clear benefits of the Next Generation.

All Nippon Airways (ANA) was an A320 operator, but in 2003 saw the efficiency and economy of the 737NG and purchased it as well.

And let's be really clear about something. Airlines such as JAL and ANA go through an incredibly hard and demanding analysis when they choose a new airplane.

They're meticulous about having the most efficient and cost-effective solution. After all, it's a huge investment for them.

So here's what I take away from all this:

  • The 737NG is the most efficient, high-technology airplane in its class, and Boeing continues to invest in the family.
  • The A320 is an aging product line. The 737NG is 10 years younger, with newer technology and more efficiency
  • Airlines around the world continue to show strong interest in 737, with big results: Boeing delivered 1,500 Next-Generation 737s in the first six years -- reaching that milestone sooner than any other commercial airplane model.

Sometime later we'll talk more about the efficiencies of the 737NG (and their advantages) in greater detail because they are worth talking about: aerodynamic efficiencies, engine efficiencies, structural efficiencies.

But for now, I'll focus on the real winners today -- the passengers of these fine airlines. They're the ones who'll be enjoying the benefits, the comfort and convenience of flying the 737NG.

02 February 2005

787, China, and the next 20 years of flying

Well, there was big news while I was on the road last week. Great news from China, and a new name for a new airplane.

Our new airplane is now the Boeing 787 Dreamliner. It's a plane designed with a market like China in mind. And based on last week's announcement, the 787 is just what China has in mind, too.

60 orders from 6 Chinese airlines is a very big deal. Aviation analysts have been saying so for days. And not just because of the number of orders. As one expert said, it's a real endorsement of our point-to-point philosophy.

Let me explain that a bit.

China is the world's fastest growing aviation market. And we're convinced that the world's most advanced airplanes, the 787 and 777, are going to serve most of that market in the coming years.

As an example, take a look at the current nonstop markets between China and Europe.

chart image

The first map shows 2003, the base year of our forecast, there were 26 Europe to China city pairs, with 406 weekly flights. You can click on the map to enlarge it.

The second map shows what we believe is going to happen in the next 20 years or so:

chart image

Incredible, isn't it? With the increase in air travel, with greater competition and with the right-sized airplanes available, we expect the nonstop markets between China and Europe to more than quadruple - to 114 by the year 2023, with a potential for even greater growth. And the weekly frequencies will increase at roughly that same rate as well, from 406 to 1,674.

(By the way, if you click on the map to enlarge it, the cities shown in blue don't have nonstop service to Europe in our forecast right now, but they very well could during next 20 years.)

Small to intermediate-sized twin-aisle airplanes like the 787 and the 777 will satisfy this growth. Very large airplanes will not be filling that need. They just can't provide the level of service that we as passengers are demanding.

What makes us so sure about all this? This bar chart gives some insight into the future of global airplane travel:

chart image

Just compare the populations of the largest metropolitan areas of China with those in Europe and North America.

China has 12 cities with populations of five million or more as compared to just five metro areas each for Europe and North America.

Those huge Asian markets will need the right sizes of airplanes to fly frequently between new city pairs throughout the world.

In my mind, the potential for new city pairs and frequency of flights between China and the world is virtually unlimited.

Think about it. Why wouldn't the people of these important Asian population centers want to enjoy the same kind of service to the world that Europeans and North Americans have?