Boeing considers a new 747 niche

  • Tuesday, November 16, 2004 9:00pm
  • Business

It’s a big week for the Boeing Co., which is conducting two meetings with airline customers this week about jets that could define the future of the company in Everett for the next couple of decades.

On Monday and Tuesday, Boeing met with air cargo carriers in Seattle. That prompted Monday’s announcement of the 777 freighter. What better forum to proclaim your intention to offer a cargo jet than in front of a bunch of cargo jet operators?

What Boeing didn’t announce was that it also spent a lot of time talking up the 747 Advanced at the conference.

Boeing executives are closing in on a decision about putting a vastly overhauled jumbo jet on the market. The 747 Advanced would incorporate the engines and cockpit technology being developed for the 7E7, and use the ultralight aluminum alloys that Boeing considered for the Dreamliner but ultimately rejected.

The combination would make for a lighter, more fuel-efficient version of the tried-and-true 747 – one that Boeing could develop and sell for far less than the cost of a new airplane designed and built from scratch. The plane could be available around 2010, Boeing said.

In the spring, Boeing showed off some interiors mock-ups that could use the space above the 747’s main passenger cabin as “Sky Suites” – bunks and lounge areas that would create a second premium seating area for passengers on the 747 Advanced.

But the cargo market will determine whether Boeing goes ahead with the 21st-century jumbo jet. Of the 34 747s Boeing shows on its order backlog, 23 of them – more than two-thirds – are factory-built freighters.

The big advantage of the 747 Advanced would be the 7E7 engines, analysts say. Boeing’s previous attempts to upgrade the 747 fell apart because of the cost of developing new engines. With the 7E7 program paying for that, it’s no longer an issue.

But there’s still a question of whether there’s a big enough market to justify the new plane at all, analysts warn.

Boeing is trying to position the 747 Advanced as an affordable alternative sized halfway between the 777 and the Airbus A380. That’s a narrow niche to start with, and with Airbus willing to cut big deals on the larger A380, it may be hard for Boeing to compete.

The question will be whether Boeing is willing to spend the money to keep the 747 line chugging along at one or two jets a month, the analysts say. If they are, the 747 Advanced could keep the company building jumbo jets in Everett for the next decade or more.

* Boeing also is meeting with potential 7E7 customers this week.

The company has tentatively scheduled a press conference to follow the customer meetings on Thursday, presumably to announce some sort of good news – or to at least to let customers extol the virtues of the Dreamliner.

Boeing could use a big 7E7 order. After confidently saying the company would sell 200 7E7s by the end of the year, executives find themselves less than halfway to that total, with only one big order from a blue-chip airline – the 50-jet launch order from All Nippon Airways.

There are a couple of theories about why sales have been slow: Airbus is talking up an A350 alternative, and Boeing hasn’t completed its contract talks with all its major airframe suppliers. Either could be an influencing factor.

But one game-changing order could be floating out there. Last week, Qatar Airlines said it would be interested in ordering as many as 60 7E7s, but only if Boeing accelerates development of the 7E7-9, the 257-seat stretch version of the plane.

Reporter Bryan Corliss: 425-339-3454 or corliss@heraldnet.com.

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