A Commercial Aviation Consultancy

Boeing

Very few company initiatives will have as dramatic an impact that the “Partnering for Success” program introduced by Boeing creates.  This new program fundamentally changes the way Boeing does business with companies that manufacture components for its aircraft, which is about 2/3rds of the content.

The new program, in a nutshell, calls for a 15-25% price reduction to Boeing, in exchange for participation in the anticipated higher volumes as the industry continues to grow and Boeing expands production rates.  As a part of the program, Boeing also increases its control of the aftermarket, prohibiting direct sales of most spares, providing Boeing another opportunity for mark-ups to its end-user airline customers. 

UnknownThe Boeing 777 has proven to be a remarkable aircraft.  Even though the airplane entered service nineteen years ago, it has maintained strong momentum in the marketplace.  Boeing has demonstrated, once again, that it is a master of derivative designs.  The next generation 777X will extend that to new levels of efficiency.

The evolution of the 777 is interesting to review. The chart below illustrates how Boeing rapidly refined their program with derivative models to improve performance. Each iteration enabled Boeing to obtain additional orders to drive program profitability.

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Today ANA announced orders for 70 aircraft worth $16.6Bn at retail prices.  The long haul portion of this order has been much anticipated after rival JAL’s order for A350s.  The A350 order by JAL was significant because this was the Japan breakout order Airbus had been seeking. Continue reading

The current political tensions in the Ukraine have resulted in economic sanctions imposed by the US and its western allies on Russia. We have no interest in politics, but when political actions impact the industry, it hits our radar screen. The aerospace industry is global, and just like dropping a pebble into a pond, the impact will ripple to the other side. Here, those ripples could have major impacts.

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