On deck

  • BRYAN CORLISS / Herald Writer
  • Saturday, October 14, 2000 9:00pm
  • Local News

The battle of the jumbojets

By BRYAN CORLISS

Herald Writer

We’re talking baseball: Boeing and Airbus in a true worldwide series.

A quick recap for those tuning in late: Airbus led off the top of the inning with a big blast, a long ball from its new big bopper, the A3XX, that carried clear to Singapore. My oh my.

The home team has its own aging slugger at the plate, the 747. But Boeing team management says it’s revamped its lineup. Rather than loading ‘em up and waiting for the big guy, they’re relying on speed to get from point to point.

And that, is the key to this game between Boeing and Airbus.

Airbus sees the aviation world as sort of a global Safeco Field, which has ever-shrinking fences conducive to big planes carrying 550-passenger loads through the world’s air travel hubs.

Looking at the same playing field, however, Boeing sees an opportunity to play small ball, with mid-size jets bypassing the hubs to fly from point to point.

Whoever’s right will be in line for new contracts that will dwarf the $200 million Mariner shortstop Alex Rodriguez stands to land in the off-season.

"The issue is airline strategies," Tim Meskill, Boeing’s director of airline industry analysis, said last week.

Singapore Airlines’ decision in September to buy the Airbus A3XX superjumbo jet instead of Boeing’s proposed 747X Stretch was widely seen as a big win for the European consortium, which is trying to break Boeing’s stranglehold on the big-plane market.

Singapore’s $8.6 billion order for 10 planes puts Airbus at the verge of having enough orders to make the $12 billion A3XX program viable, industry analysts said.

And its reputation in the airline industry means other carriers are going to look twice at the A3XX, analysts said.

"The 747 is a very fine airplane, but it’s built on 1960s technology," contends John Leahy, the chief of Airbus’ commercial division. The message to Boeing is clear, he told the New York Times: "Spend the money, start out with a clean sheet of paper and build yourself a new airplane."

That’s exactly what Boeing isn’t going to do, Meskill said.

"How many airlines can use an airplane bigger than the (747-) 400?" he asked. "Why are you going to spend $12 billion for an airplane when the demand is not growing?"

Meskill has a multimedia presentation, with charts, graphs and streaming video, to illustrate his objections. Here are the highlights:

Today’s system of international air travel is built around the capacity and capability of late-20th-century jumbo jets like the 747 and DC-10, Meskill said. For most of the past three decades, the big 400-plus passenger planes were the only ones with the range to cross oceans and fly between continents.

In addition, international air travel was tightly regulated, so only a few airports were open to those ocean-hopping planes.

Given that, the industry evolved a system of hubs: Each airline would use smaller jets to funnel international travelers to central points, then would load all these people onto a jumbo jet and fly them overseas to another hub. From there, travelers would switch to another plane to carry them to their final destination.

These hubs now are crowded and at capacity, and the world needs superjumbo jets, like the A3XX, to carry the load and reduce congestion, said Pierre Jeanniot, director of the International Air Transport Association, the world body for airlines.

"Rather than have five 747s a day between these points, we’ll end up with three A3XXs," he told Asian officials in a lecture on the future of the aviation industry, detailed in a report by The Associated Press. "This airplane (the A3XX) is required. There’s no doubt about that."

Well, there’s plenty of doubt at Boeing headquarters, where officials see new developments throwing a sweeping Aaron Sele-like curveball at traditional airline patterns.

New technology now means that smaller, 200- to 300-seat planes like Boeing’s 767 and 777 and Airbus’s A330 and A340 can make the transoceanic treks that only the jumbos could handle before, Meskil said.

And decreased international regulation means there are more airports available to handle those international flights, he said.

So in Boeing’s view, the question is this: Why fly from Los Angeles to New York to board a superjumbo jet to fly to London then change planes for Paris, when you can fly from Los Angeles to Paris direct on a smaller jet?

And if everyone’s flying direct, how many superjumbos are airlines really going to need?

Not so many, according to Meskill, the guy Boeing pays to study these issues.

There are some routes for some airlines where the only way to grow is to go with a bigger plane, Meskill said. Singapore is one of those places, he said. The city-state has only one international airport.

And on high-volume routes that now require 747s to handle the traffic, it’s likely that airlines could fill a larger plane like the A3XX, Meskill said.

But there are only 20 airlines in those positions, he said. And if Boeing and Airbus split the market, that’s only nine or 10 customers each.

"Is this worth an all-new airplane?" Meskill asked rhetorically. In Boeing’s view, no.

Market analysts are asking similar questions, in the wake of the Airbus-Singapore deal.

"Our understanding from our industry sources is that Airbus priced the planes very aggressively and at a price we believe would appear to be uneconomic," Dain Rauscher Wessels analysts Robert Toomey and Laurel Johnson reported to clients recently.

These "irrational pricing tactics" Airbus seems to be using to drive sales of the A3XX don’t make sense given the small number of superjumbo planes likely to be sold over the next 20 years, and the high cost of developing these planes.

In fact, Boeing may have been more interested in driving down Airbus’s sale price than actually winning the Singapore bid, said Jordan Green, president of the consulting firm Avmark Services Limited.

"Would they do things just to force Airbus to bite the bullet? Yes, they would," Green told the Reuters news service. "With the A3XX, Airbus is not making money on the first 10 aircraft. That’s for sure."

Boeing’s not reeling from the Singapore decision, said Bear Stearns analyst Steve Binder. "Our meeting took place just hours after the Singapore Airlines loss, (yet) we found management to be upbeat, focused and confident," he reported to clients recently.

You might say Boeing views the lost sale as more of a lead-off solo home run, rather than a game-ending grand slam.

"Are we drowning ourselves? No," Meskill said. "Are we looking at our competitors and smarting at the loss. Yeah."

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Local News

Customers enter and exit the Costco on Dec. 2, 2022, in Lake Stevens. (Olivia Vanni / The Herald)
Costco stores could be impacted by looming truck driver strike threat

Truck drivers who deliver groceries and produce to Costco warehouses… Continue reading

Two Washington State ferries pass along the route between Mukilteo and Clinton as scuba divers swim near the shore Sunday, Oct. 22, 2023, in Mukilteo, Washington. (Ryan Berry / The Herald)
Ferry system increases ridership by a half million in 2024

Edmonds-Kingston route remains second-busiest route in the system.

A view of one of the potential locations of the new Aquasox stadium on Monday, Feb. 26, 2024 in Everett, Washington. The site sits between Hewitt Avenue, Broadway, Pacific Avenue and the railroad. (Olivia Vanni / The Herald)
Initial prep work for AquaSox stadium to start, with $200k price tag

The temporary agreement allows some surveying and design work as the city negotiates contracts with designers and builders.

The Joann Fabric and Crafts store at 7601 Evergreen Way, Everett, is one of three stores in Snohomish County that will close as part of the retailer’s larger plan to shutter more than half of its stores nationwide. (Aaron Kennedy / The Herald)
Joann store closure plan includes Everett, Arlington, Lynnwood locations

The retail giant filed a motion in court to close approximately 500 stores in the U.S.

Lynnwood
Lynnwood police: 1 suspect in custody, 1 at large after attempted carjacking

Beverly Elementary School went into a precautionary lockdown Thursday afternoon. Numerous officers continue to search for the second suspect.

Robin Cain with 50 of her marathon medals hanging on a display board she made with her father on Thursday, Jan. 2, 2025 in Lake Stevens, Washington. (Olivia Vanni / The Herald)
Running a marathon is hard. She ran one in every state.

Robin Cain, of Lake Stevens, is one of only a few thousand people to ever achieve the feat.

People line up to grab food at the Everett Recovery Cafe on Wednesday, Dec. 4, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
Coffee, meals and compassion are free at the Everett Recovery Cafe

The free, membership-based day center offers free coffee and meals and more importantly, camaraderie and recovery support.

Devani Padron, left, Daisy Ramos perform during dance class at Mari's Place Monday afternoon in Everett on July 13, 2016. (Kevin Clark / The Herald)
Mari’s Place helps children build confidence and design a better future

The Everett-based nonprofit offers free and low-cost classes in art, music, theater and dance for children ages 5 to 14.

The Everett Wastewater Treatment Plant along the Snohomish River on Thursday, June 16, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Everett water, sewer rates could jump 43% by 2028

The rate hikes would pay for improvements to the city’s sewer infrastructure.

The bond funded new track and field at Northshore Middle School on Thursday, Oct. 24, 2024 in Bothell, Washington. (Courtesy of Northshore School District)
Northshore School District bond improvements underway

The $425 million bond is funding new track and field complexes, playgrounds and phase one of two school replacements.

Candidates announce campaigns for Everett city council seat

Ryan Crowther, founder of the Everett Music Initiative, will challenge incumbent Paula Rhyne for the District 2 seat.

Lynnwood City Council Vice President Julieta Crosby speaks during a Lynnwood City Council meeting on Wednesday, Nov. 20, 2024. (Olivia Vanni / The Herald)
Lynnwood picks top eight candidates to replace former council VP

The City Council will make its final decision Feb. 20 after interview process.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.