BOEING Begins Drafting The 747’s Obituary…….

BOEING Begins Drafting The 747’s Obituary…….

Earlier today, Boeing released its forecast for the commercial aviation market for the next 20 years.   This typically discusses what Boeing sees coming for the industry including demand for certain type of aircraft and the demographics of future customers.

What was noticeably absent from the 2017 version of this forecast was any talk of the 747.  They have acknowledged that the 747 platform is being wound down, without any serious orders forthcoming.

For the first time in decades, Boeing is now looking to a future driven only by 2-engine aircraft, primarily the 737, 787 and upcoming 777x platforms.    The forecast suggest that the aircraft market over the next 20 years will require over $6 trillion in new aircraft deliveries.

D-ABYT prepares for her first ever flight, a B1 test flight at Paine Field.

Of course this makes all the sense in the world since technology has allowed 2 engines to do the work of 4, and deliver passengers to their destinations in more comfort and safety than ever before.   But for the aviation romanticists in the world that have always seen the 747 as the most beautiful aircraft in the sky, such a sobering moment doesn’t pass easily.

In their comments, Boeing stated that they were simply being realists in their projections and see that the era of 4 engine aircraft is drawing to an end.    I guess all that’s left is to enjoy the Queen of the Skies for as long we can….

Related:  Lufthansa 747-400 Gallery

Lufthansa 747-8i Gallery

 

Boeing Hints That The 747 Dynasty Is Nearing Its End

Boeing Hints That The 747 Dynasty Is Nearing Its End

Boeing released their SEC 10-Q filing today and hidden among all the charts and commentary was a suggestion that our beloved 747 aircraft may be coming to the of her reign as Queen of the Skies.

In the excerpt below, Boeing talks about the lack of orders and a slow down in freight demand being the primary reasons that they are considering closing the 747 production line.   Also reiterated was a previous announcement that 747 production would slow from 1 a month to .5 month in September, basically meaning that only 6 747s will leave Everett each year until production ceases.   They also canceled plans to return to 1 747 produced per month starting in 2019.

From Boeing’s 10-Q Release on July 27, 2016:

747 Program Lower-than-expected demand for large commercial passenger and freighter aircraft and slower-than-expected growth of global freight traffic have continued to drive market uncertainties, pricing pressures and fewer orders than anticipated. As a result, during the second quarter of 2016, we canceled previous plans to return to a production rate of 1.0 aircraft per month beginning in 2019, resulting in a reduction in the program accounting quantity from 1,574 to 1,555 aircraft. This reduction in the program accounting quantity, together with lower anticipated revenues from future sales and higher costs associated with producing fewer airplanes, resulted in a reach-forward loss of $1,188 million in the quarter. The adjusted program accounting quantity includes 32 undelivered aircraft, currently scheduled to be produced through 2019. We previously recognized reach-forward losses of $885 million and $70 million during the second half of 2015 and the first quarter of 2016, respectively, related to our prior decision to reduce the production rate to 0.5 per month and anticipating lower estimated revenue from future sales due to ongoing pricing and market pressures. We are currently producing at a rate of 1.0 per month, and expect to reduce the rate to 0.5 per month in September 2016. We continue to have a number of completed aircraft in inventory as well as unsold production positions and we remain focused on obtaining additional orders and implementing cost-reduction efforts. If we are unable to obtain sufficient orders and/or market, production and other risks cannot be mitigated, we could record additional losses that may be material, and it is reasonably possible that we could decide to end production of the 747.

Keep in mind that these kind of disclosures are normal for companies as part of their Safe Harbor disclosures and basic ‘CYA’ strategies so that investors don’t retaliate will lawsuits suggesting they were mislead.   But this is the first time that Boeing has had such ‘strong’ language in a 10-Q when it has come to the 747.    Trust me, I read 10-Qs as part of what I do in real life, and the Boeing versions are among the ones that are at the top of my list when they are released.

With this kind of writing on the wall, I am of the opinion that the 747 has already been canceled in the minds of Boeing Executives.   You don’t put this kind of language out to shareholders if you’re not serious.   Today’s announcement is basically the warning shot so that we are not surprised when a future announcement makes it official.

This issue could potentially affect the Air Force order for the 2 or 3 747s that are slated to replace the current aircraft serving as the US President’s transport.

If I could write a fitting end to the 50 year legacy of the 747, I would close the program in dramatic fashion by having the last 747s to leave the production line to be the ones that would serve at the President’s pleasure.


Fleet Update For LUFTHANSA and SWISS:  NEW Planes Coming!

Fleet Update For LUFTHANSA and SWISS: NEW Planes Coming!

Over the past week Lufthansa Group made 3 separate announcements concerning the fleet, including new orders and an update for existing orders.

The first announcement dealt with SWISS and their decision to order 3 additional 777 aircraft.   These 777-300ERs will join the 6 777s already on order from Boeing and will begin to show up in the fleet during 2016.   The 777 aircraft will allow SWISS to start retiring a portion of the 15 A340-300 aircraft currently in service.

SWISS now has 9 777-300ER aircraft on order.

SWISS now has 9 777-300ER aircraft on order.

 

Next, Lufthansa provided an update on their A350 order.  Beginning at the end of 2016, the first of 25 A350s will start showing up in the fleet with the first handful of the type operating out of Munich and will allow for the gradual phase out of A330 and A340 aircraft.    Ultimately Lufthansa will have 25 A350s in the fleet based in Frankfurt and Munich.   One outstanding feature of the A350 is the fact that it will only take 3/4 of a gallon of fuel to carry one passenger 62 miles (2.9 liters per 100km).   That equates to a 25% increase in fuel efficiency over most new aircraft today AND it’s 30% quieter.

LH's new A350 will bring a distinct new look to the fleet in Frankfurt and Munich.

LH’s new A350 will bring a distinct new look to the fleet in Frankfurt and Munich.

 

To round out the busy week of announcements, SWISS announced that it will be the first operator of the new Bombardier CS series beginning in the first half of 2016.   In 2009, SWISS was announced as the launch customer for the type.

SWISS' new Bombardier CS100

SWISS’ new Bombardier CS100

For those of you attending the Paris Air Show, Bombardier will have a CS100 on display in SWISS colors.   Bombardier also plans to bring the SWISS CS100 to Zurich after the air show as part of its tour.  Hopefully, all of the delays are behind the program and we can finally start seeing these new planes replace the aging Jumbolinos!