The $15B jet dilemma facing Boeing’s CEO
reuters.com
reuters.com
It appears that Boeing has used this "time out" to...do nothing. They are in more or less exactly the same situation they were in over a year ago. This looks like GM in the late 1970's.
> Boeing agreed to deliver the first 747 to Pan Am by the end of 1969. The delivery date left 28 months to design the aircraft, which was two-thirds of the normal time.
surely they can do a ground up design in under 5 years?
It is legitimately very difficult to make a plane as cheap and efficient as airlines want, and as safe and (relatively) quiet as regulators want. Boeing and Airbus are not a duopoly because of a lack of attempts. And even they screw up; the 747-8 and A380 turned out to be duds because they were too hard to fill and four engines needs more fuel than two.
But it is also true that what is going on inside Boeing is not exactly visible to people outside of Boeing. Further, ripping out a previous process and replacing it doesn't really generate externally visible signs, typically it is visible by better results.
Could it EVENTUALLY be replaced by other companies? Sure. Would the US military be OK having their logistics on weapons disabled for 12+ months? Seems unlikely.
Boeing could design an efficient airliner and then use its political muscle to get strict emissions regulations going in the US at least.
Not really. Jet fuel prices peaked in 2008, without adjusting for inflation. [0] So fuel consumption has been a lot less important over the past few years. It is also questionable whether carbon taxes will be placed on jet fuel in many cases. At least in Canada it tends to be exempt.
[0] https://transportgeography.org/contents/chapter5/air-transpo...
More expensive fuel, more intensive oil exploration and refinement.
Make oil expensive enough and Shell et al will find hydrocarbons offworld if need be.
This sort of thing is the logic behind CAFE [1] for automotive, anyway— it forces all the manufacturers to hit a certain baseline efficiency rather than relying on them to all just be slightly less bad than the other guy (or to ignore efficiency altogether and make up the difference in performance/features/marketing).
[1]: https://en.wikipedia.org/wiki/Corporate_average_fuel_economy
I think we should impose more of society's morals onto corporations. If we are disgusted by selfish behavior in an individual, why are we not disgusted by a coordinated group of individuals showing the same behavior?
I don’t think selfishness is the right word here. Are you disgusted when you go to a restaurant and somebody orders food for themselves? I think you mean “when they act selfish at my expense” which is in itself a selfish sentiment.
So any means are justified to produce these profits? We do restrict corporations from doing truly terrible things, so we already project some morality onto corporations. I'm saying we need to do more of that.
It's worked for them.
And their planes are not that old (I think they have focused on the 717) but are migrating to the A220 (previously C-Series). Also you can pick and choose which routes support each plane best.
You don't need the latest flashy thing to have a good service, at the same time, planes that are too old have worse reliability (just ask AA about their cancellations).
In the last 20 years, they’ve gotten two government bailouts and gone bankrupt in between, so “worked” must be being used very loosely when referring to any but the shortest-term business tactic besides maintaining (with the rest of the industry) political pull in Washington.
The killer for airlines is that the older ones often have a lot of capital tied up in the planes and they basically have to keep them flying, whereas a new airline can get the latest and the greatest for effectively the same capital expenditure.
Fuel prices changing rapidly could affect the equation.
And the answer to your question: there are many private regulations entities for different businesses.
If you expect regulation to come from the state, and for stuff such as efficiency, what you're going to get is worse efficiency and higher costs for everything because of regulatory capture. Big players will draft laws to make sure they own the whole market. This happens in any sector you put these perverse incentives. From telecom to health to education to whatever else.
There are 2 different business perspectives to forecast:
(1) The manufacturers' perspective -- the article says Boeing estimates $15 billion to develop a brand new clean sheet airplane that's maybe 10% more fuel efficient. The business risk is that they won't get +$15 billion in new airplane orders to get a positive ROI. (This is not hypothetical when you consider that the Airbus A380 is more fuel efficient than Boeing 747 at max passenger configuration[1] but they didn't get enough new orders to recoup development costs. Therefore, the A380 is considered a financial failure.)
(2) The buyers' perspective -- some airline operators won't see 10% as enough of a savings to buy a new $250 million airplane. Consider that airplane buyers such as Delta Airlines, FedEx, and UPS deliberately buy older less-fuel-efficient airplanes. The savings on buying/leasing the old planes outweigh the projected fuel savings costs.
It's not that strange that a new fuel-efficient airplane is not a slam dunk in business terms. I have a 100 watt incandescent lightbulb in the attic but I'm not going to spend $8 for a brand new efficient LED light that takes 20w because I'm hardly ever in the attic. Even at 1/5th the energy usage, I would take me 20 years to make back $8 in energy savings.
[1] https://www.quora.com/Is-the-A380-or-the-B747-8-more-fuel-ef...
- evolutionary design approaches already result in aircraft ~1% more efficient every year, with much of the R&D offloaded to the engine OEMs
- clean sheet designs have to save enough in fuel vs evolutionary ones to offset the additional operational costs of operating a brand new aircraft type as opposed to a variant model. Airlines like having lots of the same kind of aircraft (and nobody has the production capacity to replace an entire fleet at once)
- clean sheet designs are much more likely to have significant delays, groundings and safety concerns. For an airline, this diminishes the value of the planned-to-be-more-efficient aircraft. For the OEM, it's a massive reputational risk, and if you screw up the clean sheet design badly enough your competitor captures the entire narrowbody market. Boeing lost enormous market share for a patchable software bug in a direct descendent of the most successful aircraft ever; now imagine a "clean slate" which doesn't deliver on its fuel economy promises and has unforeseen issues with the long term structural stability of its wings vs Airbus cheaply updating its established design
- if the project is wildly successful, it's not all good news: you've wrecked the expected commercial lifespan and residual values of existing aircraft models, which doesn't please your customers or your aircraft leasing subsidiary. Also, your competitor learns from your successes and your failures when launching their "clean sheet" aircraft which has lower research costs, a shorter time to market and is more mature when it does launch
Or, to kick HN's favorite Boeing whipping boy, the 737 MAX can't have new engines, only improved SNECMA ones, because the knock-on effects of changing the nacelle size/location would be such that you might as well design a new airplane.
I don't understand how that comment fits Comac development. See their current aircraft: https://en.wikipedia.org/wiki/Comac#Aircraft_in_production_o...
Their 2 planes in production use GE/CFM engines and the 1 in design is expected to use Rolls-Royce or GE.
Granted, I don't understand how China's aerospace industry works, if it's basically just a large industry-wide state conglomerate. But not having locally sourced engines does not really give any information about comac's potential competitiveness.
For example, the 767 had RR, GE, and P&W engine choices. But almost nobody bought the RR option, which turned all the NRE that Boeing and Honeywell did into a sunk cost. On the flip side, the stable mate 757 was almost exclusively RR engines.
If this is going to happen, then what I would expect to see is that COMAC will launch with engines from a western manufacturer and then maybe sell a refit kit (or just do the refit work themselves) later.
At some point Norwegian had 787s from Oslo to Boston and I recall liking those but I'm 90% sure that it didn't affect my purchase.
How many currently know what plan they fly in?
I don't know; the western population currently has no qualms about getting into a chinese made car, talking on a chinese made phone, etc.
When it comes to planes, people only take notice when some start crashing. If the chinese made planes don't crash enough, people won't care.
So clearly Boeing cannot safely sit back and do nothing. They risk ceding this single-aisle duopoly to Airbus entirely, turning it into a monopoly.
Which is explicitly not the case in your comment?
It designed the airliner the market wanted in the form of the MAX; it's just that a disastrous design flaw resulted in crashes and resulting groundings and losses of new aircraft orders. Airbus adopted exactly the same conservative strategy of incrementally updating a familiar design for exactly the same solid commercial reasons, but their aircraft didn't crash.
What they need is a new narrowbody that is to the 787 as the 757 was to the 767: narrow and lower capacity but same cockpit/control layout and handling characteristics (to make fleet crew management cheaper), and capacity overlapping at the high end with the bottom end of the widebody 787.
But developing an all-new narrowbody costs tens of billions, while incrementally extending the 737 to the MAX was cheaper ...
The market for 767 replacements had different demand characteristics (they didn't have many customers with all-767 fleets asking for a new jet with the same type rating), and the launch of the 787 was badly delayed by the new technologies, which are major factors other than program cost why they went for another 737 generation rather than a clean sheet.