James Wallace vom Seattle Post-Intelligencer wrote:Tuesday, November 22, 20052-engine 777 speeding by Airbus
Fuel economy a big boost to Boeing salesAs it sped down the runway after landing at London's Heathrow Airport on Nov. 17, the Boeing 777-200LR flashed past a Virgin Atlantic A340-600 on an adjacent taxiway.
It was hard to miss the symbolism.
The Boeing Co.'s jet had just set a distance record for the longest non-stop jetliner flight ever and was literally speeding by the Airbus competition. Virgin Atlantic, first customer a few years ago for the A340-600, is one of the few airlines that continues to embrace the old Airbus mantra that four engines are better than two.
The two-engine 777 is winning the lion's share of competitions against the four-engine A340, with Boeing's latest victory coming this past weekend when Emirates announced a $10 billion blockbuster order for 42 777s.
"The success of the 777 is snowballing, and the A340 is spiraling downward," said Richard Aboulafia of Teal Group, an industry consulting firm near Washington, D.C. "The market has decided that getting rid of turbines is a great idea."
In other words, the soaring price of fuel has driven a stake through the heart of the Airbus argument that for reliability reasons on long-haul flights, four-engine planes are safer than those with two engines.
Edmund Greenslet, editor of The Airline Monitor, said the A340 is headed for extinction, "like the dinosaurs."
Including Emirates, Boeing has 106 net orders this year for its 777 and may end up smashing the record of 116 net orders it received for the 777 in 2000.
At least two airlines have committed to the 777 but have yet to complete the deals.
Earlier this year, Air India chose the 777 over the A340.
Vasudevan Thulasidas, chairman of Air India, said in an interview that Boeing won because of the superior operating economics of the 777. The Air India order for 15 777s still needs the approval of India's cabinet before it can become final and be counted as a firm order by Boeing.
Also pending is a commitment from Doha, Qatar-based Qatar Airways for what it has said will be at least 20 777s.
Even though Qatar is the launch customer for a new variant of the A340-600 that is now in flight testing, the airline said at the Paris Air Show in June that the 777 would become its standard widebody plane.
Emirates has also ordered 18 of this new high-gross-weight version of the A340- 600.
Airbus and its A340 could still have a respectable showing in 2005 if it can win one or more of three yet-to-be-decided campaigns with Singapore, Qantas and Cathay Pacific airlines. Its best bet would appear to be Cathay, which already operates the A340.
Singapore, even though it has five A340-500s in operation, is Boeing's biggest 777 customer.
"You are watching a shift occur, and based on what I'm hearing, you will see a move away from four engines to two," Robert Milton, chairman and chief executive of the Air Canada holding company, said earlier this year in an interview. The airline will phase out its long-haul Airbus planes, including the A340, in favor of Boeing's 777 and 787.
As part of Air Canada's evaluation of the 777 and A340, Milton's finance people plugged into the sales equation fuel prices based on oil hitting $100 a barrel.
"The overwhelming economic outcome of two engines vs. four really came to the fore," Milton said.
Boeing's 777 backlog, not including the Air Canada and Emirates deal, is 186 planes -- more than double the A340 backlog.
So far this year, Airbus lists 14 firm orders for all its A340 family, including 11 for the A340-600.
It has won no orders in 2005 for the A340-500, the long-range plane that will now have competition from the 777-200LR when it enters service in early 2006.
Airbus launched development of the four-engine A340 in 1987. The first was the A340- 300, which entered service in 1991. The smaller A340-200 entered service in early 1993.
In December 1997, Airbus launched development of two longer-range models, the A340-500 and the bigger A340- 600s. The A340-600 entered service with Virgin Atlantic in August 2002. The A340- 500 followed, with Emirates putting the world's longest-range jetliner into service in late 2003.
To date, airlines have ordered 26 A340-500s, of which 20 have been delivered and are in service. Airbus has won orders for 115 of the bigger A340- 600s, with 48 in service.
Boeing has already won more orders for its 777-300ER than Airbus has for its competing A340-600, even though the Airbus plane had a two-year head start in the market place.
Boeing's 777-200LR lags the A340-500 in orders, but is starting to catch up.
The best chance that Airbus has to regain momentum against the 777 may be with a twin-engine plane of its own -- the A350.
One version, the A350-900, will seat about 300 passengers, according to Airbus, and is aimed at both the 787-9, Boeing's bigger version of the plane, as well as the 300-seat 777-200ER.
Boeing has sold more than 400 777-200ERs, the best-selling model of the family.
Tim Clark, president of Emirates, believes the A350- 900 will do serious damage to the 777-200ER, a plane that Emirates likes and has in operation.
"They will eat (the 777- 200ER) with that aircraft," Clark recently told the trade magazine Flight International, referring to the A350-900.
Emirates has been pushing Boeing to develop a bigger version of the 787 that would seat close to 300 passengers.
However, that would put the 787-10, as it has been called, in direct competition with the 777-200ER. Boeing has said it does not want to do that.
"They like to say 'We already make a good 300 seater,' " Aboulafia, the Teal Group analyst, said of Boeing. "Not a good answer. Against the older technology of the 777-200ER, the A350 numbers will start to look good."
Some industry analysts, including Aboulafia, believe Boeing will have to develop the 787-10.
"The only thing worse than cannibalizing your own market is having the other guy do it," Aboulafia said. "Boeing needs to bite the bullet. Take the 777 damage and get on with the 787-10."
But the A350 won't enter service until 2010. Meanwhile, Boeing's 777 is likely to continue racking up wins over the four-engine A340.
P-I aerospace reporter James Wallace can be reached at 206-448-8040 or
jameswallace@seattlepi.com.
