Bloomberg News

Boeing Defers Wide-Body Strategy Choices to Canvass Airlines

July 09, 2012

Boeing Commercial Airplanes President Ray Conner

Boeing Commercial Airplanes President Ray Conner told reporters, “We’re spending the time right now with our customers making sure we that have the right products in place and the right technologies.” Photographer: Matthew Lloyd/Bloomberg

Boeing Co. (BA:US)’s new commercial-jet chief wants to confer with airlines about upgraded versions of the popular wide-body 777 and 787 Dreamliner before taking any new designs to the company’s board.

The planemaker isn’t looking to meet a goal set by former Commercial Airplanes President Jim Albaugh to present a 777 update proposal to directors in 2012, successor Ray Conner said yesterday. He said Boeing still plans a stretched version of the 787, while declining to give any timing for an announcement.

“We’re spending the time right now with our customers making sure we that have the right products in place and the right technologies,” Conner told reporters in London on the eve of the Farnborough air show. “We don’t have a specific timetable. This is more about getting the airplanes right.”

New designs for the models are among the biggest decisions facing Conner, Boeing’s former sales leader, after Albaugh’s surprise retirement in June. Conner said there will be no major strategy shifts as Boeing seeks to boost output to pare a record order backlog and vies with Airbus SAS for market share.

Airbus’s stumbles with the A350-1000, the largest version of its new A350 family, have given Chicago-based Boeing some breathing room as it studies upgrades to its biggest twin-engine planes. Toulouse, France-based Airbus hasn’t won a new A350 order since 2008 and has only four customers for the plane.

British Airways

British Airways Plc, one of Boeing’s biggest 777 customers, would like answers sooner rather than later, said Willie Walsh, chief executive officer of parent International Consolidated Airlines Group SA. (IAG)

“If they’re going to develop something that’s going to be a step change, we want visibility around that,” Walsh said today in an interview at the Farnborough International Air Show. “The 777 is a fantastic aircraft and my biggest regret is that I didn’t order even more earlier. But it’s difficult to commit to an aircraft knowing that something’s going to overtake it.”

British Airways’ orders for 777s total 51, spread among multiple models, according to Boeing’s website.

On the 787, Conner said the supply chain is performing well as Boeing boosts output to 10 jets a month by the end of 2013. He said modifications are going well on the 787s that rolled off the assembly line months ago as the planemaker endured more than three years of delays on the composite-plastic jet.

Wide-Body Market

Wide-body planes are important to Boeing because they can cost about four times as much as single-aisle aircraft, and it’s a segment where the U.S. company leads. Boeing’s wide-body backlog was 1,367 planes through the first quarter, compared with 1,067 for Airbus, according to data compiled by Bloomberg.

Conner used the meeting with reporters to give an overview of Boeing’s commercial business as the planemaker prepares for briefings and customer visits at the Farnborough show outside London. The event is held in alternate years with an expo in Paris, forming the aerospace industry’s highest-profile forum for discussing new products.

The longer Dreamliner, known as the 787-10, will be a “simple stretch,” Conner said, echoing the view his predecessor laid out in a May 15 meeting with analysts.

777 Options

The 787-10 will have a range of about 6,800 nautical miles (12,600 kilometers), carry 300 to 330 passengers, and have a 25 percent advantage over the current Airbus A330 in the cost to fly each seat a mile, Conner said. The 787-9 can fly as far as 8,500 nautical miles and accommodate as many as 290 people, according to Boeing’s website.

Boeing is considering all options on the 777X, as the new version of that plane is known, Conner said yesterday, after Albaugh told analysts in May that the new plane, Boeing’s biggest twin-engine model, would have new wings and engines.

“We’re looking at everything at this moment,” Conner said of the 777X. “We’re very comfortable with the process. We’re comfortable where we are. When we get it figured out, then that’s when we’ll go forward.”

Conner said his goals are to ensure production increases go smoothly to meet customer demand, reach an agreement with Boeing’s engineering union later this year, hire good talent as output expands and make the decisions on the wide-body planes.

To contact the reporter on this story: Thomas Black in London at tblack@bloomberg.net

To contact the editors responsible for this story: Ed Dufner at edufner@bloomberg.net; Benedikt Kammel at bkammel@bloomberg.net


Coke's Big Fat Problem
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

Companies Mentioned

  • BA
    (Boeing Co/The)
    • $120.41 USD
    • -0.07
    • -0.06%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus