The 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.
The original 777-200 had a short lifespan; within two years it was eclipsed by the -200ER. The -200ER also had a great run, but after seven years it too was eclipsed. The -200LR was a clever niche that managed to attract sales, but primarily it saw off the A340-500.
The larger -300 also had a brief shelf life, with slow deliveries between 1999 and 2003. The arrival of the -300ER saw the program hit its stride.  By this time it was clear to airlines that the 777 could cover any route that the A340-600 could, and do so with two fewer engines and at a considerably lower fuel burn. The 777-300ER established itself as the benchmark airliner in the 350-seat segment. While this was a cause for cheering in Everett, it also led to the demise of the 747-400, and the less successful 747-8. The 777-300ER is that good.
The following chart shows 777 deliveries by year and variant. The 777’s success essentially rides on two models, the 777-200ER and 777-300ER. Boeing was able to take an exceptionally good design and tweak it – with the LR and F models benefiting from the success of the overall program. A program with a long production run also enabled Boeing’s assembly workers to continually improve processes, ensuring a steady stream of trained people continued to work on the program. Fortunately, sales and deliveries of the -300ER were peaking just as Boeing hit its 787 difficulties. Profits from the -300ER helped considerably to ease cash flow challenges.
The two peak phases can be clearly seen in the chart. Airlines quickly moved to the two ER models and, as time passed, the -300ER became the standard-bearer for the program. In 2013, the -300ER accounted 81% of 777 deliveries.
Engines
The 777 program began with strong competition between the engine manufacturers, with Pratt & Whitney, General Electric and Rolls Royce all competing on early models. But as Boeing developed later derivatives, they wanted exclusively with GE on the 777-200LR and 777-300ER. The next chart illustrates how GE’s exclusivity on the 777 program has been akin to winning the aerospace equivalent of the lottery.
As 2013 came to an end there were 1,178 total 777s delivered. GE’s share of the engine installations is 66%, with 15% for Pratt & Whitney and 19% for Rolls Royce. The next generation 777-X models will be all GE powered as well. The program going forward is exclusively GE for future production, similar to the Rolls Royce exclusivity for Airbus’ A350 program.
The Market Gap
There will be a market gap to fill with the current 777-300ER production and with the introduction of the 777-X models in 2019 and 2020. Currently, Boeing has a backlog of 257 777-300ER models, which at a rate of 8.3 per month, represents a little over 2.5 years of production, enough to carry the company through late 2016. But with the new models not arriving until 2019, Boeing needs to sell 300 additional aircraft in the interim to maintain current production rates.
With a substantial improvement in operating economics, the question is whether Boeing can generate an additional 300 sales for the existing 777-300ER while it builds its order book for the 777-8X and 777-9X variants. This is always a challenge for manufacturers, as the last aircraft produced of a given model typically do not hold their value as well as earlier produced aircraft.
It seems to me Boeing doesn’t have a real competitor against the A350-900 and -1000. Airlines are starting to replace 777-200ER and A340 fleets. Probably looking for something 300-350 seats (3 class).
We have seen have seen the largest 777 operators order A350 already. EK, QR, EY in the middle east. SQ, CX and JAL in the Far East, BA, LH and AF/KL in Europe and UA and AA in the USA.
Knowing the 787-10 is payload range restricted and the 777-8x very heavy what Boeing going to do about it.
“remarkable aircraft”. “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.” “Boeing was able to take an exceptionally good design and tweak it” “the 777 program has been akin to winning the aerospace equivalent of the lottery.” “While this was a cause for cheering in Everett, it also led to the demise of the 747-400, and the less successful 747-8. The 777-300ER is that good”
What an emotions. BTW the last remark, I think A380s replace 747s at SQ, MH, Korean, AF, BA, LH, QF, Thai, so the 777-300ER got some help to say the least.
Here we go again. So of all the carriers you mentioned, only AA, JL and AF/KL have not ordered the 777x. Every one else has or are seriously considering it, even though it’s heavy as you say. The hysteria you project is somewhat pointless. The comment about the 781 should have stayed with you. If we go by what you say the 781 is and what it lacks, it only trails the A351 by 57 frames despite the fact that the A351 has been on order for almost 6 years versus the less than six months for the 781.
I read that the A351 is positioned to squarely take on the 77W. But what I don’t get is why doesn’t the A351 have more orders? Something just isn’t adding up here. There are 452 77W’s in service with an order backlog of over 269 units. Im not a score keeper but doesnt add up.This is all under the assumption that the airline wants to replace it’s 77W with A351’s like JL did. Airbus, you have a problem …..
Why not admit that the 77W and the upcoming 777x are fine products, one of which put the A340 production line in the grave.
Its a mixed bag and more complicated that it seems. Boeing did not foresee the upgraded 777, nor did Airbus the A330 (i.e. its A300 roots). Both were lucky the products were engineered well enough to be able to do that.
Both companies have made mistakes and got direction wrong. Its not been a neat and tidy story line. Its more a trip, stumble, trip and finally stagger to the finish line with something that works.
Boeing benefited from Airbus delay on the A350, Airbus sold a lot of A330s when Boeing screwed up the program.
And don’t think for a second that the 777x will launch seamlessly. Boeing is killing its old suppliers and they have an all new landing gear supplier who has never made gear for anything, just parts.
Airbus though the market was the A35-800 and 900 and only realized late it was the 900 and 1000 (and maybe the 1100 someday.
The saddest part is Boeing is no longer lead by aircraft people, its led by a CEO with a vendetta and how much damaged he has done (with board concurrence) we will only know in time.
the only segment airbus has an advantage(twin wide bodies only) is in the a350-900 since the 787-9 is smaller than it. For every other twin engined widebody segment, boeing has a more suitable offering. a3510 looks good but the market can very easily move up to the 777-9x. Boeing’s biggest problem really is it’s arrogance and laziness which led to JAL defecting and CX buying a3510s. IF 777-9x had been launched before, CX and UA would not have splurged on the a350-10 and JAL would have stayed.
Airbus needs to look at the future and find chicks in boeing’s armor of which there are some to exploit.
1. Sell A380s cheaply to certain non me3 customers. BA is back to making a profit and can certainly use more than 12 measly A380s. Passenger comfort on an A380 is unrivaled and LHR is the most logical choice for an A380. This program needs a boost with a non ME3 order. They need to make a sell here for BA settles for the 777-9x and take the stem 777-9x orders.
2. Maintain A320 sales parity at 60% market share to put pressure on Boeing’s cash flow since 787 is still net negative cash flow and future 77w orders are not going to generate as much profit as before. the future is PWG which the boeing lacks and airbus needs to fully exploit this.
3. Develop a longer new winger version of the a321 (called a322neo) with a 20-25 foot extension, new wing and landing gear and with a PWG engine and ~4500 nm range. This will replace transatlantic 757 missions and offer airlines in asia a plane with similar capabilities as the now deceased 787-3 albeit lighter and one with commonality with the a320. This is a lower cost and lower risk solution and a better proposal for china than the a330 regional.
thoughts?