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29 March 2005

Beer and Wiener schnitzel

I'm back recently from spending 10 days bouncing between 5 countries.

I'd like to post a few thoughts about the adventure.

The trip was a great chance to meet again with reporters, airlines, airplane finance people, investors, and industry analysts from across Europe. In general, they seemed upbeat about where the industry is going, a completely different attitude from just a couple of years ago.

First stop was Geneva, for the Aircraft Finance Conference. I was asked to speak a bit about why I think the 787 Dreamliner is the most efficient airplane for the middle of the market. With several hundred in the auditorium this was a great opportunity to share our vision for the future of air travel.

Randy's European Travel Map

A travel menu serving up visits to 5 great European cities in 10 days.

From Geneva I flew north to Finland. I hadn't been in Helsinki for 10 years, and it was great to be back, even if the temperature was about minus-10 degrees Celsius. Indoors, anyway, I got a warm reception from the Finnish Aviation Press Association.

In France a couple of days later I noticed that the weather map said Helsinki was down to minus-25 degrees or so. That's cold. And it figures that all the while, back in Seattle it was unseasonably warm and sunny.

At Boeing's office in Paris I joined in a discussion with French media - a terrific opportunity to get a fresh perspective. One reporter for La Croix asked me about this blog, and ended up doing a piece on it. I can kind of understand the motivation. As I look at the stats, quite a few of the thousands of visitors to this site are from France (and Belgium, and the UK too!).

I had a little downtime in Paris, so even though it was cold, I walked from my hotel near the Opera Garnier (where the Phantom of the Opera once lived) to the Eiffel Tower. Those who know Paris will recognize that as a pretty healthy walk.

Randy presenting in Frankfurt

In Frankfurt, the eyeglasses are on, contact lenses out, as I present Boeing's perspective on air travel -- which, as my bleary eyes could attest to, I did quite a bit myself that week.

Then it was on to Germany, where it was media roundtable time again.

Now, one of the first things I wanted to do when I arrived in Frankfurt was have a great meal. The title of today's entry might give you a little idea of what I chose off the menu.

A day later, I was off to my final stop, Madrid. In Spain, one of the obvious topics was Iberia Airlines' choice of Airbus single-aisle jets over the Boeing 737.

I told reporters we were disappointed in not winning this one. We certainly offered Iberia a very competitive proposal. The Next Generation 737 rated highly, but in the end Iberia based its decision on already having Airbus airplanes in its fleet. And Airbus made a financial offer that we weren't prepared to match.

Even so, Iberia has been a very good Boeing customer, and we're looking forward to further discussions with them about the 787. And apart from Iberia we have other very good customers in the Spanish market such as Air Europa and Spanair.

Still, someone asked me: Are you guys out of Spain?

My answer was, no, of course not. In fact, just before I arrived in Madrid it was announced that Gamesa Aeronautica of Spain is going to work on the Large Cargo Freighter (LCF) project. This is the modified 747 that's going to transport large composite structures of the 787 Dreamliner. Part of the LCF will be designed in partnership with Gamesa, the first Spanish supplier supporting the 787 program.

Randy presenting in Madrid

Talking about long-term passenger traffic growth with reporters in Madrid.

I expected some tough questions. That comes with the job. It was no surprise.

But I should say that in the business sense, as well as in hotels and restaurants, in every country, people were friendly and professional. I felt very welcome.

And that should come as no surprise, either.

Yes, it's a tough business, like many others.

But differences between Boeing and Airbus are just part of the competitive nature of the commercial airplane industry.

For me, the business side of this game doesn't cross into personal feelings. We're all so interconnected now, culturally and economically. Our friendships go back a long time and they'll continue on for generations to come.

Having said that, I'm looking forward to my next trip. And another helping of Wiener schnitzel.


22 March 2005

In focus

We've had an interesting couple of weeks as a company, that's for sure. But none of that has made a bit of difference down here on the ground. The focus at Commercial Airplanes is, as always, on our customers and on the future.

Boeing 737 photo

New Next Generation 737s for Singapore Aircraft Leasing Enterprise.

And right on cue, we get some great news that puts us back in the game big time.

Today, Singapore Aircraft Leasing Enterprise (SALE) announced its intention to purchase 20 Next-Generation 737s with options for 20 more. SALE has one of the youngest fleets in the leasing industry, and this is their first direct order with Boeing for the Next Generation 737 product line.

The new airplanes will help SALE expand its operations around the world.

And once again, the Boeing 737 comes through as the most advanced and most preferred commercial airplane in its class.

All good stuff.


17 March 2005

Extended twin-engine operations

One of the more gratifying parts of doing what I do is hearing from so many people who have such an interest in everything to do with airplanes. And I'm constantly amazed at the depth of knowledge folks have, and the smart questions they raise.

For example, here's a thought-provoking note sent to the blog recently:

I have been quite enamored by the engineering story of how 777 was designed and built. It's a great story of innovation, supplier collaboration and the use of technology for practical results.

The 777-200ER is the real deal. I never believed that A380 made much sense - Boeing's vision of interconnecting cities is not only practical but represents the way folks will like to travel.

The only thing that perplexes me about 777 is that it only has 2 engines. Perhaps I'm conservative, but somehow 747's 4 engines gives me comfort that there's a lot more redundancy built-in in case of engine failure. Sure, the stats may show that the probability of such failure is very small, or that 2 engines is statistically as safe as 4. But it's more psychological I guess. Did Boeing conclude that 4 engines would push the cost way up?

C.J. Tan

Thanks for the note, C.J. Here's the short answer: we've been studying this issue a long time, dating back decades. It's something known as ETOPS, or extended twin-engine operations. ETOPS goes back to the days when engines were less reliable and a twin-engine airplane was restricted to flying no more than 60 minutes from a diversionary airport, where it could touch down if a problem arose in-flight. Old-timers like me might even remember when it was called the "60-Minute Rule."

But since we launched the twin-jet Boeing 767 into service on transatlantic routes in the mid-1980s, engines have improved significantly, and twin-jet airplanes operating on ETOPS routes now operate to higher standards of reliability. And ETOPS rules have been increased to as much as three hours or more (in the case of the 777), based on the success of the 767 and 777 families.

Boeing 767-400 photo

The Boeing 767 - the ETOPS pioneer.

We now have a lot of years of data and flight records showing that twin-engine airplanes are more efficient, more economical, and most important, more reliable than four-engine airplanes.

Twin-engine airplanes encounter far fewer diversions and turn-backs than four-engine airplanes. A good example is the fact that the four-engine Airbus A340 has twice as many turn-backs and diversions as the 777. For the passenger, of course, this means that on a twin-engine airplane like the 777 you're less likely to be inconvenienced by departure delays or unscheduled stops.

In terms of the "comfort" or psychological factor you mention, consider that since 1985, airlines around the world have flown almost 4 million ETOPS flights. ETOPS twin-engine operations and airplanes are clearly the most convenient and reliable way for people to fly.

Now, since operating with twin-engines is proven safe and reliable, it only makes sense to take advantage of the increased efficiency they offer. Twin-engine airplanes consume less fuel, weigh less, have fewer emissions, and operate more efficiently than four-engine airplanes.

We figure it amounts to 5% to 9% lower operating costs for airplanes of comparable capacity, range and level of engine technology. And by consuming less fuel, twin-engine airplanes are also friendlier to the environment.

Twin-engine ETOPS flight also benefits the traveler. It allows airlines to offer more direct flights to more destinations with more frequencies, and with fewer connections and delays.

And if it's any further comfort, independent research has shown that three out of four passengers prefer to fly on the 777 than its competitors. Time and data have shown us that twin-engine airplanes are safe, reliable, and efficient. That's why they're here to stay.

If you want to read more about ETOPS flight, you might want to take a look at this article from Boeing Frontiers online from a couple of years back. It's a good overall look at the subject.


11 March 2005

First flight of the Worldliner

We've been going out around the globe for the past several years telling Boeing's story very aggressively. In fact I just got back from a long trip to Europe talking with people across the Continent about passenger desire for more point to point service.

Boeing 777-200LR photo

The 777-200LR takes off at the start of its three-hour first flight on March 8. Boeing test pilots took the airplane to 15,000 feet (4,572 meters) and an air speed of 270 knots, or about 310 miles (500 kilometers) per hour, customary for a first flight.

That's why it was so fun this past Tuesday to see the 777-200LR Worldliner take off into the blue sky over Paine Field in Everett, WA for its first flight. Here is an airplane that will truly open up the world to non-stop flights at a range of up to 9,420 nautical miles.

I think it's great that here we are, already into the flight-test program for the Worldliner, just three weeks after the roll-out. The program is on schedule, and we're looking forward to our team working through the milestones.

Now, sometime before the Paris Air Show in June, we expect that the A380, which Airbus unveiled in January, will begin its own flight-test program. It's going to be interesting to see that fly.

Boeing 777-200LR photo

The Worldliner touches down at Boeing Field in Seattle, followed closely by the T-33 chase plane which supported the takeoff and landing.

I believe these airplanes represent two different views of the future of air travel. The 777-200LR gets you where you're going, without long waits. The A380 is all about waiting. Waiting to board, waiting to connect, waiting to get your luggage, waiting to get to your destination.

Just something to think about while we wait for the A380 to take to the air.


07 March 2005

What happened to "4 engines 4 long haul"?

A few weeks ago I was in Washington, D.C., talking with a lot of people about aviation and all of the changes that have been going on in the industry in recent years. These changes are being driven mostly by the more competitive marketplace that airlines have found themselves in.

Boeing 787 Dreamliner image

Our all-new breakthrough airplane: the 787 Dreamliner.

And while I was in Washington, it dawned on me that it had been about two months (and now almost three) since Airbus announced it was going forward with the A350 in direct competition with our new airplane, the Boeing 787 Dreamliner. I remember that day, December 10, very vividly, because I did eight telephone interviews with reporters, all wanting to know what Boeing thought of the Airbus announcement.

Well, I told the reporters it was "a great day for Boeing." It certainly wasn't what they expected to hear. It caught them a bit off guard.

What I was really saying was this: It's great for Boeing because with the announcement of the A350 (a twin-engine airplane based on the A330), Airbus has validated what we've been saying since the launch of the 777 - that twin-engine airplanes are more efficient for short, medium, or long-range flights than airplanes with four engines.

What's even more interesting about the A350 offering is that it throws the Airbus product strategy out the window. Their strategy for 20 years has been that twin-engine airplanes like the A330 were the most efficient way to service short and medium range routes, but that you needed four engines for the long haul, or "4 engines 4 long haul" as their slogan went.

So, what happened? Apparently something changed.

Here's another way to think about it. The A350, being an A330 derivative, is good enough to obsolete the A330 and A340. But the key is, the A350 still falls short. It just isn't a breakthrough product like the 787.

Graph: The 787 is the most efficient airplane, with the lowest operating costs

The 787 is the most efficient airplane with the lowest fuel consumption by far.
The A350 would adopt some new technologies, making the A330 and A340 obsolete. But the all-new technology of the 787 is still significantly more efficient than the derivative A350.

Another thought popped up about the A350 offering. Last year I got a lot of questions about whether the A350 had slowed enthusiasm for the 787. I said back then that the enthusiasm was still there, but airlines were watching to see what Airbus would do. Today I think it's clear where the enthusiasm and momentum is.

Ethiopian Airlines 787 Dreamliner image

Ethiopian Airlines is one of the latest members of the 787 family, and the first to bring the Dreamliner into service in Africa.

On December 10, when Airbus defined their offer as the A350, they announced one commitment from one airline, for 10 airplanes. Since that day, there have been no new orders for the A350, and the airplane has not officially been launched.

On the other hand, just since December 10, the 787 program has added 11 new airline customers from around the world announcing their commitments for 111 airplanes. Now that's momentum! And it says to me clearly that the market prefers the breakthrough technology of the 787.

So when someone asks me about the A350, I still respond that it's great when the competition validates our strategy.

They've validated the need for airplanes that take people "where they want to go, when they want to go."

And the competition has also validated that twin-engine aircraft with a range of about 8,500 nautical miles (15,700 km) are the efficient way to go for long range.

So, I just have to ask again. What happened to "4 engines 4 long haul"?


03 March 2005

Viking dreams

In case you haven't heard, Icelandair has just joined the 787 Dreamliner family. Over the weekend they announced a firm order for two of our new airplanes.

It's inspired me to come up with some warm words for our good friends in Iceland. Namely, that I think it's great to see this long-time Boeing customer join in the growing enthusiasm about the Dreamliner.

Icelandair 787 Dreamliner image

Icelandair’s 787 Dreamliner. The ancient Viking explorers could have really used one of these to get around.

We've had a strong relationship with Icelandair going back some 30 years. They've been operating Boeing 757s and 767s. And just recently Icelandair's parent company, Flugleidir, purchased 10 Next Generation 737s.

And now the Dreamliner. She's really going to fit in perfectly with Icelandair's rapidly-growing network of long-range routes. They've been flying between North America and Europe. But the 787 will really open up the world for these guys. It gives Icelandair the ability to pursue new markets across the globe. The Dreamliner is the perfect airplane for that kind of point-to-point travel.

You know, it hasn't even been a year yet since we launched the Dreamliner, and already we have 193 announced orders and commitments for the 787. Icelandair is the 16th airline to select the 787. They join another new launch customer, Ethiopian Airlines, which announced an order of up to 10 787s last month.

Icelandair's chairman says that what sold him was the 787's unprecedented efficiency, economics, range, and passenger comfort.

Hearing that great endorsement, it sure seems like the Dreamliner's breakthrough advantages are becoming clear in the marketplace. Clear as a moonlit night in Reykjavik.