Tag Archives: 747

A380 sales compared to 747 sales at program start

Some weeks ago, in a discussion with a colleague we tried to put into context whether the A380 sales were such a dismal or not.

My colleague first plotted A380 orders since the program launch (2001) in comparison to those of the 747 (1966). I show below the result:

A380 and 747 orders referenced to the year of launch of each program.

A380 and 747 orders referenced to the year of launch of each program.

Both programs show an initial sales rush at the time of program launch. In both cases the rhythm of sales slowed down after the second year. In the first 11 years of program, each had managed:

  • A380: 262 orders.
  • 747: 357 orders.

Thus, we can see that the Boeing 747 was selling better already from the beginning of the program.

However, I wanted to make yet another comparison: aircraft orders taking as reference the year of first delivery, having heard so often the industry mantra that some potential customers would want to wait to see the aircraft in operation before placing orders. See below this second comparison:

A380 and 747 orders referenced to the year the 1st aircraft delivery of each program.

A380 and 747 orders referenced to the year the 1st aircraft delivery of each program.

In this case, and due to the shorter time to develop the Boeing 747 since program launch (1966), the difference in sales is narrowed:

  •  A380: 262 orders.
  • 747: 281 orders.

You can see that still, 5 years after the 1st delivery of each aircraft (2007 for the A380 and 1969 for the 747) Boeing had sold more aircraft, but with this reference the margin is lower, 19 aircraft.

Boeing 747. The Boeing 747 was the first wide-body in commercial aircraft history and still is the twin-aisle with the highest amount of aircraft sold (1,528 a/c as of today, probably to be soon overtaken by the 777) and delivered (1,464 a/c as of today). However, it has taken over 40 years to reach those numbers. The 1,000th unit sold was reached after 25 years of sales in 1990. The 1,000th unit delivered was also reached after 25 years of aircraft deliveries, in 1993.

Thus, in my opinion, when we want to measure the success of the A380 we cannot be distracted by the figures of other commercial aviation segments (single-aisle and small / intermediate twin-aisle) but we have to check what the 20-year forecasts for the Very Large Aircraft say:

  • ~1,300 aircraft according to Airbus GMF,
  • ~600 aircraft according to Boeing CMO,

and then see what could be expected market share for the A380 against those forecasts and whether it is getting the orders to reach it or not.

You can find orders and deliveries figures in both manufacturers websites or summarized here: A380 and 747.

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Twin-aisle aircraft deliveries 20-year forecast

I read in the following article “Airbus seeks to increase Washington State supply business; aims for 13 A350s/mo” (from Leeham News) how from a presentation of a A350 supplier (ElectroImpact) at an aerospace suppliers event in Washington State, it was concluded that the Airbus aimed at building 13 A350s per month, as the mentioned supplier had built its factory with capacity to extend production rates up to those 13 aircraft.

This would be news because in its presentations Airbus talks about a production ramp-up up to 10 a/c per month (as does Boeing for the 787, which 10 aircraft/month should be reached by the end of 2013).

Having analyzed several times Airbus’ Global Market Forecast (GMF) and Boeing’s Current Market Outlook (CMO), I believe that those production rates of above 10 aircraft per month should be expected by industry followers just by seeing the numbers included in those forecasts.

In 2012, the GMF forecasted about 6,500 twin-aisle to be delivered in the next 20 years. The CMO indicated 7,210 aircraft. In 2013, Boeing CMO slightly reduced the figure to 7,130 a/c.

Comparison of Airbus GMF and Boeing CMO 2012-2031.

Thus, both companies expect between 6,500 to 7,200 twin-aisle passenger aircraft to be delivered in the following 20 years (excluding freighters, 747 and A380 – these 2 considered as Very Large Aircraft in the studies).

1st approach. If we were to take the mid-point of both forecasts, about 6,850 a/c, and simply divided by 20 years, we would reach to an average figure of 343 twin-aisle aircraft to be delivered per year between the 2 manufacturers, or 28 a/c per month. If Airbus wanted to maintain the long-term 50% market share, it would have to aim at delivering 14 a/c per month between all its twin-aisle products, which soon will be A330 and A350.

2nd approach. However, current twin-aisle production levels are in no way close to those 343 a/c per year. In 2012 there were 258 deliveries thanks to the introduction of 787s, but in the previous decade the average was about ~165 a/c per year. Thus, manufacturers must have a deliveries’ ramp up to accommodate those 6,850 in the next 20 years. Not knowing what that ramp-up is, I just linearized from where we are today and what is to be delivered.

I plotted in the graphic below all the deliveries of twin-aisle (excluding Very Large Aircraft) from the 1970s to 2012, and then what a forecast could be departing from 2012 deliveries’ figure to accommodate ~6,850 a/c in the next 20 years.

Taking a look at the graphic, one can already understand that if we take the GMF and CMO forecasts as good ones, the manufacturing rhythm will have to accelerate in the following years, especially in the second decade. In the late 2020s, over 400 twin-aisle would have to be delivered per year (over 33 per month), thus manufacturers will have to churn above 16 a/c per month each, that is the double of what they produced during the last decade.

Twin-aisle deliveries: historic series (1970s-2012) and forecast (excludes VLA -A380  & 747).

Twin-aisle deliveries: historic series (1970s-2012) and forecast (excludes VLA -A380 & 747).

Market shares. One could wonder whether this growth will favour more one company or the other. I compared market shares (excluding VLA):

  • in 2012: Boeing delivered 155 twin-aisle (26 767s, 83 777s, 46 787s) vs. Airbus 103 a/c (101 A330s, 2 A340s)… 60% / 40%.
  • in 2003-2012: Boeing delivered 839 twin aisle (148 767s, 642 777s, 49 787s) vs. Airbus 880 a/c (44 A300s, 687 A330s, 149 A340s)… 48% / 51%.
  • in 1993-2012: Boeing delivered 1,687 twin aisle (572 767s, 1,066 777s, 49 787s) vs. Airbus 1,521 a/c (175 A300s, 31 A310s, 938 A330s, 377 A340s)… 50% / 45%.

[The shares in the past decades include marginal deliveries from Ilyushin models and McDonnell Douglas models, which share I kept out of Boeing even after the merger in august 1997, these are ~30 a/c to be added to the 1,687]

Seeing that market shares have been fluctuating but always around 40-60% for each company, they could expect to have to at least deliver 40% of those 6,850 a/c in 20 years, or of those above 400 a/c in the late 2020s.

Backlog. Finally, just to see how the twin-aisle mix for each company is going to be, let’s look at the aircraft on order (backlog) that each company has as of today (end June 2013):

  • Airbus (43%):
    • A330: 260 a/c to be delivered.
    • A350: 678 a/c to be delivered.
  • Boeing (57%):
    • 767: 56 a/c to be delivered.
    • 777: 339 a/c to be delivered.
    • 787: 864 a/c to be delivered.

Thus, of the 6,850 twin-aisle to be delivered in the next 20 years, about 2,200 are already contracted as of today (plus the above 130 a/c delivered within the first half of 2013), thus 33% of those 6,850 a/c is more or less secured and among those the split is 57 / 43 for Boeing.

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Was Orville Wright’s the first flight ever?

Last Monday, December 17, it was 109 years since the first flight of the Wright brothers at Kitty Hawk. However, there was some skepticism in Europe about the flight. I had already read about that skepticism in the book “The Airplane: How ideas gave us wings“(1) (by Jay Spencer (2))

In the book, the reader gets the idea of the skepticism, of how in France there was also a race for performing the first flight and how it was not until the Wright brothers flew in Europe years later (1908) that people got convinced of that first flight in 1903. When I read about that, the idea that came to my mind was French chauvinism.

Let me now start connecting the dots…

Flyer I (picture by 350z33, available at Wikimedia)

  • Visiting the National Air & Space Museum, in Washington D.C., you could see a real scale Flyer I, the aircraft with which the brothers first flew. When you see the aircraft you first notice that the surface controls are at the front of the airplane, or that the airplane has no independent ailerons but the wing is bent at the tip…
  • Reading the book “The Airplane” there is chapter dedicated to the evolution of each configuration item of the aircraft. One of them is dedicated to the landing gear. In relation to the Flyer…

[…] European experimenters put the Wrights to shame by adopting wheeled undercarriages from the outset. The Wrights stuck with skids far too long, perhaps because they viewed their airplanes as scientific proof-of-concept vehicles first and practical machines second.

  • Last summer, when we visited the Aviodrome (3) museum in The Netherlands, we found another Flyer model of the Wrights. This one was a bit more complete: it showed the skids and how the airplane was propelled into the air thanks to a system composed of rails and a kind of catapult.
  • Finally, when reading about French aviation pioneers for the previous post in this blog, I got to read in the Wikipedia article about the Brazilian residing in France Santos-Dumont the following passage:

The Wrights used a launching rail for their 1903 flights and a launch catapult for their 1904 and 1905 machines, while the aircraft of Santos-Dumont and other Europeans had wheeled undercarriages. The Wright Brothers continued to use skids, which necessitated the use of a dolly running on a track. The Fédération Aéronautique Internationale, founded in France in 1905 to verify aviation records, stated among its rules that an aircraft should be able to take off under its own power in order to qualify for a record. Supporters of Santos-Dumont maintain that this means the 14-bis was, technically, the first successful fixed-wing aircraft.

Thus, it was not just simple French chauvinism as the more simple explanation given either in “The Airplane” or Wikipedia article about the Wright brothers may point to, but there was at the time a discussion about the way in which the aircraft were indeed propelled into the air. That is a legitimate discussion, not chauvinism. (4)

Since I am not invested in either position, to me the first flight will always be the generally accepted of Orville Wright on December 17, 1903. That is the one I celebrate (see tweet below). However, you can see how sometimes to get a clearer picture and connect some dots it takes visiting 2 museums in DC and The Netherlands, reading a book and serendipity researching in the Wikipedia. 🙂

(1) “The Airplane” is a terrific book of which one day I hope to write a review. By the way I purchased the book at Boeing HQ in Chicago almost 2 years ago.

(2) Jay Spencer is also coauthor of “747” another great aviation book of which I wrote a review here.

(3) Aviodrome is a great museum north of Amsterdam, at the height of the Smithsonian institution National Air & Space Museum… if only it had free entrance as well. I will have to write about this museum too.

(4) That same federation did not accept as a first flight one made by the French Clément Ader in 1890, because it was an un-controlled flight.

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Boeing commercial aircraft discounts (update for 2011)

Some weeks ago, Boeing released 2011 results [PDF, 252KB]. The company reported revenues of almost 69bn$477 commercial deliveries and 805 net orders for its commercial aircraft. All these were widely reported by the media and mean a good year for Boeing.

Last years I wrote in some posts what was my estimate of Boeing discounts: the relation between what is announced by the press, what appears in its list prices and sometimes as backlogs and what it is indeed computed into the profit and loss account. In this post I wanted to update, if necessary, the figure I calculated for the average discount of Boeing.

Most of the necessary information can be found in its website. Boeing list prices can be found here.

The number of gross and net orders (after cancellations) year by year can be found here.

Last year deliveries can be found in the report of financial results. From there we can also deduct the figure of Boeing Commercial’s sales of services. That is not directly reported but can be deducted (all Boeing services-related sales are reported as well as Boeing Capital Corporation division and Boeing Defense’s “Global Services & Support” unit)

As in the post of last year:

  • I needed to make one assumption: new orders come with a 3% down payment in the year of the booking, while the remaining cost I assumed that was paid on the year of delivery (for simplicity I didn’t consider more intermediate revenue recognition milestones linked to payments, the 3% figure was taken from the AIAA paper “A Hierarchical Aircraft Life Cycle Cost Analysis Model” by William J. Marx et al.). [1]

Having put all the figures together, the calculation is immediate. Boeing Commercial Aircraft revenues in 2011 (36,2bn$) are the sum of:

  • the discounted prices times the delivered aircraft in the year (including possible penalties from delays),
  • less the down payment of the current year delivered aircraft, as the down payment was included in previous years results,
  • plus the down payment of current year net orders (this year’s this calculation was a bit trickier as it included 737NG deliveries BUT 737 MAX orders),
  • plus services revenues.

The discount figure that minimized errors last year was 41%. Using this figure, the error obtained this year in relation to Boeing Commercial Aircraft reported revenues is 0.1%. That is a little higher discount than previous years (39% for 2010 and 38% for 2009). The only explanation for that would be the built-in penalties for 787 and 747 delays into revenues plus the launch of a new aircraft, 737 MAX.

Thus, the updated discount for Boeing commercial aircraft is 41% (!).

[1] Last year, I received a comment from the analyst Scott Hamilton on the level of downpayments. He mentioned they could reach up to 30%. I tried this time to compute the calculation using that input, but the figures of discounts to be applied each year to minimize errors are not consistent, thus I stayed with the 3% used in the above-mentioned published paper.

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Beluga vs. Dreamlifter

While looking at the small-scale models of aircraft at home, some days ago, I locked on the Beluga and the Dreamlifter (Airbus and Boeing transport aircraft to bring major components from one factory to another). I had become used to the sight of the Beluga but seeing then both together I realized that they are indeed bizarre.

While Airbus relied on the Beluga since years ago (and before, it used the Super Guppy; now resting at the museum by Airbus factory in Toulouse), Boeing only decided to modify 747s for this purpose to reduce transportation times in the 787 manufacturing.

In this post I didn’t want to make any technical comparison, just wanted to show this picture and ask: which one do you think is the prettiest (or the ugliest)? I haven’t made up my mind yet.

Dreamlifter vs. Beluga.

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747

I attended a course at the AirBusiness Acedemy of Airbus some weeks ago. In one of the coffee breaks I hanged around in the building’s library and I found a book that I wanted to read, so I picked it: “747”, by Joe Sutter with Jay Spencer.

Joe Sutter is the engineer who led the engineering development of the Boeing 747, the Jumbo. The book, a biography of Sutter, covers all his life but it is mainly centered in the happenings, decisions, struggles, individuals, etc., involved in the development of the 747 and other aircraft.

I particularly liked the many engineering problems that he mentioned in the book, why & when they encountered them and how they overcame them: e.g. how they debugged the B 377 Stratocruiser, the decision of placing 737 engines under the wing, going for 4 main landing gears in the 747, etc., and the innovations that they introduced in commercial aviation with different aircraft: first pressurized aircraft (B 307 Stratoliner, with the issue they had with the vertical stabilizer), the jet engine mounted in pylons under the wings (with the B 367-80 prototype –now resting at the Air & Space museum at Dulles, DC- which evolved in the 707; configuration mainly used until today), the first wide-body aircraft (B 747), etc.

He also described many details about dealings with customers (e.g. Juan Trippe in Pan Am, Iraqi customers), competitors (including Russian delegations during Cold War), and colleagues at Boeing (with some heated discussions and internal politics, where he doesn’t save any detail).

As a curiosity, I finished the book while flying from Chicago to Frankfurt some days ago aboard a B 747, the first time I flew in one. I was sitting by the wing and took some pictures of the wing (first with a triple-slotted flaps) at different moments of the flight.

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The book is a very interesting read which I recommend to anyone with passion for aircraft (engineer or not).

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Boeing forecast for A380

The last two issues of Boeing’s Current Market Outlook, included a slide in which Boeing wanted to prove that their forecasts have been more accurate in the last 10 years. They compare actual aircraft demand versus both Airbus and Boeing forecasts in the year 2000.

Boeing Current Market Outlook, different views.

I find it interesting that all segments are described as such, segments: “Single-aisle”, “Twin-aisle”, “Large”… except for Airbus forecast in which Boeing introduces the model “A380”. As if wanting to point that Airbus was wrong in its A380 forecast… as if wanting to steer demand.

Let’s see the numbers:

  • Actual demand (2000-09): ~300 aircraft.
  • Boeing forecast (2000-19): ~700 aircraft, assuming equal split (among the 2 decades): ~350 a/c in 2000-09.
  • Airbus forecast (2000-19): ~1,300 aircraft, assuming equal split: ~650 a/c in 2000-09 (although A380 first flight took place only in April 2005).

As of today, Airbus has sold 234 A380s, including the latest 32 from Emirates. The prospects for the aircraft seem brighter as operators started operating it, on the other hand Boeing 747-8 orders have stalled since 2007.

A bit of history.

Yesterday, I was digging into back materials and I found two interesting pieces. Both from Boeing’s website in the year 1996 (using the way back machine). The first one is from a webpage about delivering value it could be read:

“In an industry defined by continual change, customers expect Boeing to help them prepare for the challenges ahead. That’s why we work closely with customers to understand their long-term requirements.

Customers have expressed interest in many potential airplanes, including:

  • An airplane smaller than the 737-600, seating 80 to 100 passengers.
  • An airplane larger than today’s 747-400.
  • A capable and cost-effective supersonic jetliner.
  • Derivatives of current models.”

Of those potential airplanes: we have seen the Embraer 190, the Airbus A380, derivatives and the only one that never came true was the supersonic jetliner

Artist image of Boeing Sonic Cruiser.

The other piece is from a news release on the occasion of the Farnborough air show of 1996 (2010 edition is taking place right now). There, Boeing stated:

Most major aerospace companies agree that airlines will require 500 to 700 airplanes capable of carrying more than 500 passengers. Boeing forecasts 500 airplanes will be needed by the year 2015.

Much of the demand for these very large airplanes will be generated by steady growth in air travel to and from Asia, and by capacity constraints at some of the world’s largest airports.

The 747-600X, with its ability to carry 548 passengers on routes up to 7,750 nautical miles (8,900 statute miles or 14,350 km), is designed to fill this market need. It will allow airlines to accommodate traffic growth without increasing the number of departures scheduled for busy airports.

During the next 20 years, airlines also will need approximately 600 airplanes capable of carrying between 400 and 500 passengers.

The Boeing 747-400 and 747-500X are designed to fill this market need.”

At this point it is useful to remember that in 1993 Boeing together with Airbus consortium companies started the feasibility study for the Very Large Commercial Transport (VLCT). Boeing left the joint study two years later. Nevertheless, still in 1996 it stated in its website that demand of aircraft carrying above 400 seats (747 and A380 of today) in the following 20 years would be between 1,100-1,300 planes, very close to Airbus forecast of the year 2000. The reasons behind that demand were the same Airbus argues nowadays: growth in Asia, constrains in largest hubs…

Later on, Boeing changed its forecast down to 700 aircraft.

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An aircraft worth its weight in gold?

Airbus announced last January that it had raised the list prices of its commercial aircraft by an average of 5.8%. It had not updated its prices since 2008. You may see the current prices here: Airbus list prices

Boeing also discloses in its website the range of list prices of its aircraft. Those prices haven’t been increased in the last two years.  

Few years ago, I saw for the first time a comparison of prices of aircraft per kilogram. It was prepared by a teacher I had at EOI Business School in Seville, Felipe Moran, who later has become a co-worker. With this post I will start a series of comparisons, the first one being precisely that one: an update on price per kilogram of aircraft. 

We already saw where to get the prices from. The other input we are going to use is the weight of the aircraft, what is called: Operating Empty Weight (OEW). You may find this information in various places, I recommend you to pay a visit to Boeing’s “Airplane Characteristics for Airport Planning”, where you will find very detailed data of all its commercial aircraft.  (While gathering this info I also came across the following section dedicated to fun facts of the legendary Jumbo 747).  

Combining these inputs we can build the following table. 

Price per kg of commercial aircraft.

Some facts may counter intuition: 

  • There doesn’t seem to be a clear discrimination between older and newer aircraft (A380 and some 787 models rank among cheapest, while A350-900 and 787-9 are among the most expensive).
  • Smaller Airbuses rank among the most expensive aircraft in a per kg basis despite the suggested price war that was reported by the specialized press in the recent years.

With the exceptions of A350-900 and 787-9 there seems to be a very slight trend in bigger aircraft being cheaper in this per kg basis. One may argue that once the frame of a certain size is built, building a bigger one might not cost that much

Now, let’s talk about the Military Transport business. Do we think those aircraft are more or less expensive? On one hand, those aircraft are not carrying systems such as the in-flight entertainment and, on the other, the scale of the market is smaller (with few exceptions such as the C-130) and they do carry diverse military systems, protections, etc. What is the trend weighting more in the balance? 

Military transport aircraft price per kg.

As you can see, military transport aircraft are on average 25% more expensive on a per kg basis. There is much more technology in them than people tends to think… they are clearly not just flying trucks. 

As you may have noted I have not included any sources for the prices of these aircraft, since they are rarely disclosed. I have used prices reported by the press and US budgets. 

Let’s stretch the argument a bit more… What is the trend for fighter aircraft? This time scales are bigger than in military transport. Does this make them cheaper? See the table. 

Fighter aircraft price per kg.

Not even close. Fighters are around 3.2 and 4 times more expensive than military transport and commercial aircraft, respectively, on a per kg basis.  

We can see in the following graphic all these aircraft together and maybe spot those trends. 

Aircraft prices per kg.

Now that we have an idea of how much aircraft cost per kg (1,700$ commercial aircraft, 2,100$ military transport aircraft and 6,700$ fighter aircraft)… is this expensive? Expensive compare to what? 

Let’s relate these prices to something closer to us. 

Cars: 

  • The best-selling car in Spain in 2009, was the Renault Megane (with 52,156 cars sold). It costs about 17,700 € (or 24 k$) and weighs 1,150 kg, this yields: 21 $/kg, clearly cheaper, about 80 times cheaper than commercial aircraft on a per kg basis. 
  • More up-scale cars such as the Mercedes Class E 350 CDI (56,000€ and 1,825 kg) or the Audi Q7 4.2 TDI (85,000€ and 2,605 kg) are more expensive per kg, 41$/kg and 44 $/kg, respectively. This is 40 times cheaper than commercial aircraft.

It may be worthy to note that in the cars we see the completely opposite trend than that we saw in airplanes: the bigger the car the more expensive on a per kg basis. 

Let’s compare this yet again with some other unrelated luxury item: Jamón Ibérico Puro de Bellota de Jabugo 5J. Today it was on offer in El Corte Ingles website for only 449€, a piece of about 7 kg, yielding: 87 $/kg. This is twice more expensive than buying a Mercedes (this may be the reason why it was an offer from Sanchez Romero supermarkets) but still 20 times cheaper than a commercial airliner. 

To end this post, let’s answer the question posed in the title of the post: 

The kilogram of gold is in the order of 35,400$, clearly more expensive than any aircraft. 

After all, nowadays, we may find no aircraft worth its weight in gold.

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