Sizing up the 777X vs Airbus–and Boeing

It was no surprise that Boeing’s Board of Directors authorized the sales force to begin showing the 777X to customers for sale, as opposed to the concepts. As we’ve reported (and as did others), this move was expected this week. Entry-into-Service (EIS) is slated for late 2019, and will be driven in part by development of the GE9X engine.

The 777X replaces the 777-200LR and 777-300ER, with the 777-9X at nominally 406 passengers giving Boeing a monopoly position similar to that currently enjoyed by the -300ER. The 8X/8LX is 353 passengers.

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The 777-9X falls just within the Very Large Airplane category of +400 passengers. We believe this will sound the death knell for the struggling 747-8I. The 747-8 nominally carries 467 passengers but Lufthansa, the only operator so far, configures the airplane for 362-386. The 777-9X will likely be far fewer than 406 in Lufthansa’s configuration but plane mile costs should be far superior to the 748. In high density configuration, the 9X will be solidly in VLA territory.

Update, 900am PDT: Boeing dropped five orders for the 747-8F from ailing lessor Dubai Aerospace. The 8F backlog is now down to 33, plus 26 for the 8I.

Air France A350 contract stalled; here’s the way forward

Bloomberg News has this report that the Air France-KLM talks for 25 Airbus A350s remain stalled over the long-running dispute between the company and Rolls-Royce over AF’s desire to overhaul the Trent XWB engines.

The Air France-KLM group offers its own maintenance, repair and overhaul services and wants the ability to provide MRO to others as well as perform the work itself.

Engine suppliers are loath to grant MRO rights to others. Engines are often sold at deep discounts, and in extreme cases, even given to airlines in exchange for the exclusive parts and MRO contracts. This is where the engine makers truly make their profits.

Rolls-Royce is known to be particularly hard-nosed in this regard.

So how will the log-jam be broken?

Rolls wants Air France to order the Trent 1000 for the 25 Boeing 787 orders announced last year. Given the long relationship between Air France and GE, the supplier on AF’s current fleet of a variety of aircraft, this will be a tough pill to swallow. But don’t count it out.

737 MAX ‘commitments’ and what these mean

Note: As a follow up to our previous post about the 787 break-even, Blog by Javier added a third post to simplify his very detailed analysis. You may jump to the link here.

Also: AirInsight has this commentary on the MAX.

Boeing today (Nov. 3) announced it now has more than 600 commitments for the 737 MAX, as well as confirming the 68 inch fan selection and discussed some other issues related to MAX.

Our immediately preceding post synopsized Jim Albaugh’s presentation to Goldman Sachs. Shortly after this, Boeing offered up to the media a tele-press conference with John Hamilton, 737 chief program engineer, to update the status.

One of the things he also referred to was the 600+ commitments by eight airlines for the MAX. Based on questions from the media, focusing on when “commitments” become “orders,” we thought it might be useful for the Reader to discuss this.

Odds and Ends: Qatar, Cargolux and GE

For those who don’t believe there was a connection between the Cargolux-Boeing-GE dispute and the 787 and Qatar, watch the Dubai Air Show. We’re hearing Qatar will sign announce it has selected GEnx for the 787.

Speaking of Max, Boeing didn’t say much about the 737 MAX on the earnings call. In fact, Jim McNerney was downright ambiguous. Boeing is still considering where to build the airplane and it’s still talking to customers. Boeing said in August at MAX’s unveiling that design details would be forthcoming the following month. November is around the corner and we’re still waiting.

Boeing’s union nemesis, IAM 751, is already reaching out to membership about “wants” for contract negotiations next year. Overhanging negotiations will be the NLRB complaint–testimony is supposed to begin next month–and the MAX assembly site. Our prediction: this will be purely a testosterone contest. We have dour predictions at this point.

Airbus and the A350: assembly is supposed to begin by year end with first flight next year. We’ll see.

A hint of things to come–Lufthansa 787 order?

Lufthansa Technik “is set to become a leading 787 MRO” following a deal with JAL, blares a headline in AviTrader’s current issue of MRO magazine.

The magazine writes:

Lufthansa Technik will become one of the world’s leading 787 MRO providers after concluding a Total Component Support (TCS) contract with
Japan Airlines (JAL) to support its fleet of 787 Dreamliners. The agreement runs for a term of 10 years and will see the MRO provide material
support, including repairs and logistics services, for JAL’s fleet of 35 Dreamliners from the moment its first aircraft is delivered next year. Lufthansa
Technik will supply its customer with materials from Tokyo as well as from its existing material locations in Frankfurt and Hamburg.

JAL has GEnx engines on its 787s, which may give GE the edge in engine selection for Lufthansa.

The German airline has been evaluating the Airbus A350 XWB and the 787 for many months for what would be a huge order, perhaps 150, across the Lufthansa group.