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29 April 2005

A hot rod's final delivery

It's been an incredible week, the likes of which we haven't seen in a while. First Air Canada and then Air India announce they're selecting 787s and 777s to renew their fleets. Then you throw in the A380 first-flight hoopla, and needless to say, we've been a little busy around here.

But I don't want the week to go by without a few fond words about a great airplane. The very last 757 departed Boeing Field in Seattle on Wednesday. This final delivery almost got lost in all the other news going on.

Shanghai Airlines' 757 photo

Final delivery. Shanghai Airlines' 757 soars into the skies over Puget Sound.

We formally completed the 757 line back in October, but this week we actually delivered the last airplane to Shanghai Airlines, which had requested an April delivery. Their new 757-200 is the 1,050th and final 757 produced in Renton, WA. Can you believe that?

55 customers ordered 757s over the past 20 years or so. And about 1,030 of the 757s are still in service around the world today. Did you know that of the 35 commercial jetliners introduced since the 1950s, only seven models have ever sold more than 1,000 units? That's a real achievement. A tribute to the Boeing folks who made it happen.

As a "cub" economic analyst for Boeing, I did some airplane operating cost trade studies related to the 757 when we were first developing the airplane. I could see then that it was going to be in big demand by the airlines because of its efficient technology. Over the years I've been involved in many sales campaigns with some of our best customers with this fabulous product.

Probably the greatest memory is from the early 1990s when I was head of the 737/757 product marketing group. I had the amazing opportunity to fly on a 757 demonstration flight to Lhasa, Tibet. Now, this is one of the highest airports in the world, at 11,600 feet elevation. That's thin air up there, surrounded by the foothills of the Himalayas.

 757 Lhasa, Tibet, 1991 photo

With yours truly on board, the 757 demonstrates a single-engine take off at the airport in Lhasa, Tibet in 1991.

But we successfully and safely demonstrated that this twin-engine airplane had enough power and performance to do a single-engine take off and turn back to the airport. Soon after that came the first regular twin-engine jet service to that region.

When we gave birth to the first 757 back in 1981, it set the standard for aviation technology and efficiency. Here's the interesting thing: that very first one didn't go to a customer. It's a Boeing-owned test airplane, still in use today.

I'm told that pilots like to call the 757-200 the "hot rod of the skies." Mainly because it's a very powerful airplane, and it almost literally jumps into the air. Considering that nearly all of the 757s we ever built are still flying, I think this hot rod will be soaring into the skies for a long, long time.

On another note related to events this week, you might want to take a moment to click over to BBC News for a really good, balanced mix of views on the A380 and its potential impact on travel. Interesting reading.

27 April 2005

Big bird aloft

Bien joué. Well done.

Anyone in aviation can tell you that first flights rank way up there on the list of exciting, memorable, and emotional highlights in our industry. You might even add "spine-tingling" to those descriptions.

So, it's got to be a great feeling for the Airbus team, now that the A380 has completed its first test flight early this morning (Seattle time). "Hats off" to them.

I'm sure everyone involved is feeling very proud today. And they should be.

Of course, we have our differences with Airbus on the future of ultra-large airplanes and whether this is really the way passengers want to fly. But that's a topic for further discussion some other day.

Today is the A380's day, and I send my congratulations.

26 April 2005

O (Air) Canada!

A few days ago I was talking about the concept of a "game changer."

Well, the news this week is really re-defining the meaning of "game changer" in our industry. Just for starters, Air Canada changed the game big-time with a decision to modernize its fleet with Boeing 777s and 787s. There's other big news breaking this week, but today I want to focus on Air Canada.

Air Canada 777 - 787 airplanes image

Air Canada's new fleet could include
up to 60 Boeing 787 Dreamliners
and up to 36 Boeing 777s.

And what I find significant about the Air Canada announcement is their choice of the newest, most current members of the 777 and 787 families, including the 777-200LR, 777-300ER and the 777 Freighter. Air Canada's plans also include 787-8s, as well as becoming the first airline to announce plans for the 787-9.

Air Canada describes this week's announcement as a decision to "renew and modernize" its fleet. Think about that. Renew and modernize. No question about it, they're building the newest, most modern and efficient twin-engine, long haul fleet.

In Air Canada's words, these new airplanes represent "overwhelmingly attractive economics" as they replace all of the airline's older twin-aisles. Air Canada estimates that the fuel burn and maintenance cost savings alone on the 787 will be approximately 30%.

But what's really fascinating is the way Air Canada plans to make use of the new 777s and 787s to grow its current long-range non-stop routes, particularly to China and Latin America.

Air Canada says it's planning to fly 777-300ERs between Vancouver and Tokyo. Other new airplanes will allow Air Canada to implement its recently announced expansion to China markets. They're also planning to add daily non-stop service from Toronto to Shanghai, increase flights between Toronto and Beijing, and add daily Vancouver to Guangzhou service. Air Canada also plans to expand cargo service to China.

This is the essence of what we've been saying for years about long-range twin-engines flying point to point. The 787 and 777 work perfectly together, allowing Air Canada to respond to seasonal demand with two aircraft models that can fly with the same speed, range, and passenger comfort levels, while offering different seating and cargo capacities to match demand on its routes.

Air Canada's strategy has been about "point to point" for a long time. And by continuing to meet the passenger's desire for more non-stop service, Air Canada is locking in its reputation as one of the world's premier long-haul carriers for many more years to come.

With apologies to the National Anthem, it just makes you want to sing: "O Air Canada! With glowing hearts we see thee rise."

22 April 2005

Rapid rewards

There's a great piece out this month in Air Transport World, if you get a chance to see it.

It's essentially a profile of Southwest Airlines and its CEO, Gary Kelly.

What really caught my attention is a section talking about SWA's focus on non-stop flights.

Approximately 80% of SWA passengers are on nonstop flights, with perhaps 14% connecting and 6% through. "We focus on nonstop traffic," Kelly states. "We'd prefer fewer connections. It's what customers want least. It raises the bar. It is extra work for no more money. It's a lot cheaper for us to fly you nonstop."

Kelly really hits two key points on the head here: non-stops are what passengers prefer, and they're the best economics for airlines.

19 April 2005

The game changer

Wow. That's about all I can say. Wow.

Well, okay, there are a couple of other things I can say about the excitement around the world for the new 787 Dreamliner. Our newest launch customer is Korean Air Lines, with orders for 10 Dreamliners, and options for an additional 10.

Korean Air Lines' new Dreamliner photo

Korean Air Lines' new Dreamliner.

Clearly the market is speaking here, demonstrating the trend for efficient, mid-sized, long-range airplanes. And there's no doubt the passenger comfort and breakthrough technology of the 787 is going to enhance Korean Air's already top reputation as a regional and long-haul carrier.

And I just have to observe something about the momentum that's building for the Dreamliner. Back on December 10th, Airbus offered the A350. They have since announced only one airline customer order for 10 airplanes. But just since that same date, the 787 family has added 12 new airline customers with 121 orders and commitments.

Which brings me back to what I started talking about here a while ago - why the A350 falls short of the 787.

That topic really fired up some comments, some of them pretty hot. Such as:

Ignoring reality might be dangerous to your economy!
Rolf S.

Well, I happen to think we're firmly rooted in reality. And the reality of what I was getting at in the earlier post is that there's no comparison when you put these two airplanes head-to-head.

First, understand that the 787 is a breakthrough airplane, a "game changer." It's a complete set of new technologies.

Breakthrough technology 787 vs. A350

The 787 brings together, in an all-new integrated design, the latest advances in aerodynamics, and breakthrough efficiencies in structures, systems, and engines. Those highly efficient and quiet engines have been designed so that the power systems are interchangeable between engine manufacturers - a totally new concept.

This is a commercial airplane with an all-composite fuselage, wing, and tail. Another first.

And by using composites we're reducing the weight of the 787. That leads to much better fuel efficiency and lower operating costs.

Composite material, as compared to metal, is more durable. It doesn't corrode. It has better fatigue characteristics. These qualities also enhance the passenger experience, which I'll get to in a moment.

carbon-fiber composite fuselage section photo

Earlier this year we unveiled the first carbon-fiber composite fuselage section, or "barrel." By building the sections as full barrels with integrated stringers - the supports that run through the structure - we reduce parts, improving aerodynamics and fuel efficiency.

So, how does the A350 stack up?

Aerodynamically, the A350, as proposed by Airbus, would incorporate some improvements. But it's still based on the A330, an airplane designed 15 years ago. And while the A350 would use the 787 engines, they'll be adapted to the A330 platform, so you won't get the efficiency of a totally integrated design.

But the biggest difference is in the A350's structure. It's a heavier airplane, with higher fuel consumption, and higher operating costs than the 787. And the systems being used in the A350, again, like the A330, were designed 15 years ago.

All in all, a compromise. And because this is basically an A330 derivative, you're going to get the A330 passenger experience, based on a 1970s design cross section.

The 787 interior mock-up photo

The 787 mock-up in Seattle gives a view of the cool mood lighting on the Dreamliner.

On the other hand, from your first moment on board the 787 you'll notice a difference - open space designed in a way you may never have seen before.

The mood lighting in the cabin is pretty cool, too. It can change intensity and color with the time of day. Even the huge luggage bins are going to make your experience more comfortable. You'll never have to stress out about overhead space for your stuff.

And remember the composite material I talked about? It's a big part of why we think you're going to love flying on the 787. Using composites means we can put in the largest passenger windows on a commercial airplane. We can also lower the cabin altitude and increase the humidity in the cabin to a more comfortable level.

That all adds up to getting where you're going feeling relaxed and refreshed.

And what's the comfort level on the A350/A330? Same old, same old.

So, let's get back to reality here. Which would you choose to fly?

13 April 2005

Five card draw

I'm not a poker player. But I know enough about the game to realize that the way Airbus might play it would get them thrown out of any Las Vegas casino.

What I'm taking about is the government "launch aid" Airbus receives to develop new airplanes. It's just not a fair way to play the game. And that's why the U.S. Trade Representative and the European Union have been trying to reach an agreement to end those subsidies. Monday, a 90-day negotiation period expired, with no agreement.

It's a complicated issue, but it has caught the attention of some commenters who feel that I sometimes steer clear of certain topics like this in the news.

It's not that I expect you to trash Boeing and drag all the skeletons out of the closet. At the same time, when the word is out on some story and there is silence .. the story becomes the elephant in the room.

Great case in point: I'd really like to hear your take on what is going on between Airbus, the EU, and Boeing. It appears that this is going to the WTO. However, many are suggesting that Boeing benefits just as much from government help as Airbus does and that you'd be better off negotiating directly with them rather than taking a hard line at the WTO.

You have a knack for making things like this clear, and interesting. Here's hoping you'll share a little bit about this case.

Louisville, Kentucky

It's an excellent point. I haven't been trying to avoid the subject. But it's true, I haven't mentioned it here. Although it does come up frequently when I'm out talking to airlines, analysts, investors, and the media.

So, here's my take.

Success in business is partly about taking risks. And in the airplane business, it is expensive risk-taking. When Boeing produces a new airplane model we invest our own money, and sometimes borrow funds to finance the project.

Airbus does that too, but gets a distinct advantage that we don't have. Since the early 1990s, they have been getting up to a third of their development funding up-front and "risk-free" from European governments. That's "launch aid."

Prior to 1992, Airbus received as much as 100% of its new airplane funding from European governments! And considering the cost of developing a new plane, that equates to a multi-billion dollar (or euro) head start.

So, what do I mean by "risk-free?" That means, if the airplane does not make its sales target, Airbus simply does not have to pay back the loans. For them, it's just an "oops." Or, for you golfers, a mulligan.

Boeing accepts full commercial risk for every new airplane we build. But Airbus shifts its risk onto the backs of European taxpayers. Now, maybe this made sense 35 years ago when Airbus was an infant company trying to break into the commercial airplane business. But today, they're mature, and claim to be more efficient and profitable than Boeing.

Airbus now has a full product line, and governments have invested heavily to get them there. And the hard fact is, for the past few years, they've been delivering more airplanes and winning more orders than we have. So why on earth do they still need government subsidies to compete?

Airbus defends its subsidies by claiming that Boeing benefits from Pentagon and NASA contracts. But Airbus' parent companies, EADS and BAE Systems, have combined defense and space revenues that exceed Boeing's. So, if there is a benefit from having space and defense in the corporate portfolio, Airbus benefits equally from these kinds of contracts.

Another Airbus claim is that Boeing gets "tax breaks" from the state of Washington. But these state incentives are available to all commercial aerospace companies, not just Boeing, and even to Airbus if they choose to set up an operation in our beautiful state. There are already a number of Airbus suppliers here, and they benefit too.

Now, what I don't get is why the state and local incentives Airbus and EADS get in Florida, Mississippi and Louisiana apparently don't count - not to mention incentives they get in France, Germany, the United Kingdom, and Spain. Somebody should ask them.

Finally, Airbus complains that Boeing's Japanese suppliers get government support. Well, similar government support goes to Airbus suppliers in Belgium, Sweden, Italy, and other countries. Boeing and Airbus can do business with any suppliers they choose, and pay market rates for parts and equipment. So what's the complaint, really?

The bottom line in this fracas is launch aid. These risk-free loans distort the commercial airplane market. Airbus gets them from European governments. Boeing doesn't get any. Period. It's really long past due for Airbus to drop it.

With the help of launch aid, they've built the A380, the most heavily subsidized airplane in history. Airbus chose to go with a very large airplane. Fine. But now they also want to go after the middle of the market with the A350. And they want yet another handout to help launch it. Did they maybe choose poorly the first time, going after a very small market in the over-500 seat category?

Look, Boeing is out there every day competing for every possible order. We know our airplanes are the best, in both performance and value. We've got no problem with tough competition. As I've said before, this is a tough business. But let's all just compete on a level playing field.

According to the rules of the poker game of five card draw, first you get dealt a set of cards. And then you get one opportunity to discard unwanted cards and draw new ones. Airbus got dealt a set of cards. They took their draw. And they got a good hand. But now they want another new set of cards. That's against the rules.

It's time for the dealer to say, play the cards you have. No more handouts.

08 April 2005

Godspeed, Peter

I'd like to say a word about a real gentleman from the broadcast media who just got some sobering news. Peter Jennings of ABC's World News Tonight announced this week he's been diagnosed with lung cancer.

As Jennings himself noted, millions of people are living with cancer, and he plans to learn from them "how to cope with the facts of life that none of us anticipated." I can appreciate exactly what Peter is saying, because I was there myself 7 years ago with throat cancer, and have fully recovered.

ABC Anchorman Peter Jennings at Boeing photo

Peter Jennings, with Carolyn Corvi, on the 737 assembly line in Renton on February 17.

You may recall, Peter Jennings paid us a visit just a couple of months ago, so the news has something of an immediate connection. He and his news crew spent a few hours touring the 737 assembly line in Renton.

I thought he was extremely gracious and full of curiosity about what we're doing at Boeing Commercial Airplanes. Jennings struck us all as being every bit as personable and approachable in person as he is on the air.

We wish him well on his journey of treatment and recovery ahead. And our thoughts and prayers are with him.

05 April 2005

Trading spaces

It's not exactly "Extreme Makeover: Blog Edition." Maybe something more along the lines of "Trading Spaces." Whatever you want to call it, we've got some new software and a new look, and I couldn't be more thrilled with our new home.

In the 10 weeks or so that we've been blogging at Boeing, we've gotten hammered by blog improvement experts offering advice on building the proper blog. Actually some of the criticism has been far from constructive.

You can't be serious with such a blog. I just can't find anything of interest in it. Maybe you should think about credibility.

Nick F.

Today is the last day that I read Randy's blog. This isn't a blog at all.

Fred S.

Take down your "Blog." You embarrass us, everyone who reads it, and you make the world a dumber place.

Dan S.

I wish people would just say what's on their minds, don't you?

Anyway, we appreciate all the comments. We'll be sharing some of them here - positive and negative. You'll notice some other features we've activated. We got nailed pretty hard for not having RSS, or news feed capability. Now we do. We've also added permalinks, a search feature, archives, and links to a lot of background material.

A note about comments. I've read and heard a lot of remarks along the lines of: a blog isn't a blog if it doesn't _______. Fill in the blank. One person emailed this comment:

Blogs are where your employees go to expose you.

I didn't realize that the blogosphere had such a rule. Sorry, that's just not what we're about. Sure, we're going to post some of your comments. Even critical ones. But it's not a free-for-all.

A number of articles have been written in print and on the Web, implying that Boeing's blog and others like it just aren't "real" blogs. Why not? Because we don't rip on the company in the blog. Because we don't trade in gossip. That's funny. I happen to like the fact that I work for Boeing and talk about aerospace. I never saw myself as the "Hollywood Reporter."

So, what's a blog? According to the official rules of one recent blog awards contest, "a ‘weblog' is defined as a page with dated entries." That works for a simple guy like me.

The blogosphere exists so people can talk about whatever they want to talk about. Here, we're going to talk about the future of flight. The exciting things on the horizon for air travelers. The new trends and technologies that are shaping this exciting industry. Quite a few people have emailed to say that they've very much enjoyed reading about just those things in this blog.

You're welcome, of course, to start your own blog if you like. We kind of like ours the way it is. But our door is always open to advice from neighbors - even if an occasional brick gets tossed in.