Randy's Journal: Archives
A couple of weeks back I invoked Yogi Berra in saying that "it ain't over 'till it's over." Well, now that all the year-end orders results are in, we can talk a bit about what it all means, and where we're going in the coming year.
One of the big stories, I think, is that the last two years have really been unprecedented for our industry - with about 2,000 commercial airplane orders each year between Boeing and Airbus.
Another big point is that single-aisles are selling like gangbusters. The Next-Generation 737 program again set a record for sales, but the A320 is a strong competitor, and we see this as continuing to be about a 50/50 market.
But looking at the widebody market, in the below 400-seat category, once again the 767, 777, and 787 families have significantly outsold the A330/A340/A350 families. It's a continued validation of Boeing's twin-aisle strategy - which we embarked on about four or five years ago.
The decision at that time, you may remember, was to concentrate our twin-aisle focus on that below 400-seat segment, which is about 90% of our forecast widebody deliveries over the next 20 years.
For two years in a row, Boeing has garnered at least 70% of the widebody market share, once again confirming the Boeing product strategy.
And when you get into the larger airplanes, the 747 and A380, the 747 had an outstanding year with 72 orders, including the 747-8 Intercontinental order from Lufthansa, validating the need for a good replacement airplane for the 747-400 passenger airplanes. In 2006, the 747 program had its best year since 1990.
In the dedicated freighter market, Boeing had 81 orders for 777 and 747 freighters - demonstrating the robust freighter market we're experiencing.
Looking ahead, I think we're going to see continued strength in the freighter market. In fact, as I've mentioned before, the demand for new airplanes overall looks to remain strong.
Today there are about 2,500 commercial airplanes in operation that have been in service 20 years or more. In the next decade another 5,000 airplanes will reach 20 years - for a total of 7,500. Many of those airplanes are going to need to be replaced by new-technology models.
Finally, you're probably wondering what I think about how the orders "race" shaped up in 2006. I've thought a lot about this question in the past week, and the best way to put the sentiment into words is that in a competitive business like this, you win some and you lose some, and it always feels better to win. But it's more important that our customers win.
So, I don't think it's really about celebrating who had the bigger numbers. It's about the quality of the order base, including great customers across all models of our product families, and the value that those products are providing our customers.