Bloomberg News

Boeing’s Slow-Selling 747-8 Buoyed on Talks With Emirates

June 01, 2014

Emirates Airline Airbus A380

Emirates has bought more than a quarter of all Airbus A380s produced, with plans to receive its 50th A380 next month. Photographer: Gabriela Maj/Bloomberg

Boeing Co. is talking to Emirates, the world’s biggest operator of the Airbus A380 superjumbo, about a potential sale of its rival 747-8, in what would be a major boost for a program that’s struggled to gain customers.

Emirates’ need for better fuel burn on its largest jets has opened a window of opportunity for Boeing, which has begun discussions about the 747-8, said John Wojick, senior vice president for sales and marketing at the Chicago-based manufacturer’s commercial airplane unit.

While neither the A380 nor the 747-8 are major commercial hits, sales of the Boeing model have been particularly lackluster, forcing the manufacturer to slash production rates. Emirates is the biggest buyer of the A380 and Boeing’s popular 777, the largest twin-engine aircraft available, and the carrier has pushed Airbus to put more efficient engines on its A380.

“The new engines they’re pressing Airbus to put on their plane, we’ve already got four of them,” Wojick said in an interview in Doha, Qatar, at the annual general meeting of the International Air Transport Association. “We think we have a good solution.”

Major Capacity

Emirates’ possible interest come as Boeing sees renewed interest in the 747-8, which at this point is operating only by Deutsche Lufthansa AG, one of four customers for the passenger variant. Talks are at an early stage, and Wojick didn’t say how many aircraft Emirates may want to buy.

“We’re talking to anybody who has the size and capacity requirement, and obviously Tim is someone” who fits into that category, said Wojick, referring to Tim Clark, the Emirates president. “We’d love to be able to get the airplane into Emirates.” Clark said separately that he’s focused on his major order for Boeing 777X, which he announced last year.

Even with 90 superjumbos still to be delivered, Emirates would be prepared to buy additional planes should Airbus commit to adding new engines, Emirates Chief Commercial Officer Thierry Antinori said in a May 20 interview.

“Tim Clark has made it clear he’d like to have a re-engined A380,” Airbus Chief Operating Officer John Leahy said in Doha at the meeting. “We take comments from our largest customers seriously but there are no negotiations underway at the present time.”

Slim Demand

Air China (753) is set to get its first 747-8 this year and Korean Air Lines (003490) will get its first next year. Transaero has also ordered the plane. The 747-8 is also produced as a freighter. Last year Boeing sold 17 747-8s altogether, and the planemaker is producing 18 a year, a rate it aims to maintain, Wojick said. Boeing had to slow production last year amid waning demand, cutting the rate to 1.5 planes a month.

Boeing remains confident about keeping up a steady stream of orders for the current-generation 777 planes, Wojick said, even as the manufacturer is poised to bring a new 777X into commercial service in 2020.

The planemaker is seeking to pair sales of new-design 777X models with current-generation 777-300s, and will in some cases help encourage orders by agreeing to take from airlines older aircraft, including the Boeing 777-200 and also Airbus’s four-engine A340-600, now out of production, he said.

“We have six years to get to the 777x so we got another three years backlog to fill,” Wojick said. “I think it’s a doable task.”

To contact the reporter on this story: Andrea Rothman in Toulouse at aerothman@bloomberg.net

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


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