Please start here. Having the airline CEO make these remarks about the future of the 747-8I even as it took delivery of its seventh last week is a significant message. Boeing is in the midst of rolling out a refinement on its 747-8 – so the OEM remains committed to the program. There are also rumors of campaigns that could see more orders. But, as always, rumors in this industry are like the weather, constantly changing.
The market has spoken about the 747-8, and it has spoken softly. The airplane has been getting good reviews from Lufthansa, the only airline flying the passenger version at present. Indeed Lufthansa has said they find the 747-8I and A380 offer similar economic numbers. Yet the airline slowed 747-8I deliveries even as it ordered a third tranche of A380s.
Lufthansa therefore has extraordinary impact on the VLA market. The CEO’s latest words are important because for the first time it seems there may be a crack in the airline’s commitment to the 747-8I. The re-orders for A380s were an unspoken message – but now we have the CEO saying the future of their commitment to the 747-8I is seeing a sunset. It will be interesting to see if Lufthansa will take all the 747-8Is it has on order.
Most observers seem to concur that the arrival of the 777-9X will be the death knell of the 747. Boeing has managed to develop the already impressive 777 into the benchmark 777-300ER. Taking the design a step further to the 9X is no doubt highly attractive because new materials keep weight down, while allowing for much better economics and probably require less powerful engines. That means a growth 777 is likely to offer what airlines want: ~400 seats with ~7,000 NM range with 15-20% lower costs.
The sunset of the 747 in passenger mode does not impact its future as a freighter. It will be some time before the 777F takes away business. Nor does the sunset on the 747-8I impact the A380 program, in our view. The A380 at over 500 seats remains in a class of its own. And in major O&D markets where slot constraints are standard, this airplane is the only efficient option.