Tuesday, September 25, 2007

BA: Who Put The Bomp In The Bomp-A-Bomp-A-Bomp?

The silence around here is deafening and it makes me think that BA's planned fleet renewal buy may be the best kept secret since 'who put the bomp in the bomp-a-bomp-a-bomp?'.

Of course, the subject is what BA chooses to order for its heavies. It's of major significance for several important reasons, not the least of which is that BA is seen as one of a very few blue chip operators in the field.

BA is looking to replace at least 34 of their long distance fleet, and the reason why it's so significant is that it will either be a vindication of the Boeing 'smaller and direct' theory of traffic or the Airbus 'cram 'em in and let 'em change planes at a hub' theory-at least in the ultra large end of the class. In the next to ultra large class, it'll be a choice between 'soon to be available' and 'no chance before 2013'.

I tend to discount the likelihood of any significant seating capacity growth in the A380. In fact, seat numbers have quietly declined since the program got started, and I've often expressed what I think this signifies.

This was accompanied with a subtle shift in the marketing/publicity spin from 'bulkliner to the masses' to 'luxury cruiser for them what can afford it', which might be a way of rationalizing the problem

Simply stated, it's the weight, stupid, and it's not going anywhere.

On the other hand, with the exception of Lufthansa, the 748-I has not set the world on fire with orders, only garnering 25, although the 748-F has done well with 65 orders. The 748 has a major advantage in that the tooling and development costs are long since paid for, and it's proved to be a rugged and durable hauler of people and cargo. Also, the lead time to deliveries may well be less than Airbus can promise.

The other interesting choice will be in the slightly smaller class of aircraft that seat around 300-350 passengers, and this will be between the 777, the 787, or the A350.

Here are some random observations.

The lack of information is informative in itself. BA and Boeing are not in the habit of strewing their mess from the rooftops, so the lack of information tells us something right there. Airbus has also been pretty quiet, and it's not like them to hide their light under the proverbial bushel.

The 777 is available today and its operating characteristics are well known. It doesn't break any new ground technology wise, but neither does the A380 or the 747-8I. The 787 is a cutting edge product utilizing CFRP technology that has a 5 year lead over the A350.

The number of orders that the 787 has received suggests the industry thinks Boeing has got it right.

The takehome is that the 777 is flying today, the 787 is headed that direction, the 747I is also headed that direction, but there's only one A380 that's in what one might call completed form, and the A350 design has yet to be finalized. That suggests that Airbus is failing to execute on its project management promise, and that may well be a critical factor.

In addition, the decline in the dollar makes Boeing look better every day.

On the other hand there is a persistent drumbeat to 'support the home team' that BA is hearing, mostly from Airbus, because the wings are made in Britain. That's no mean consideration, either.

Ultimately the shakeout will come and the lion's share of the order may well go to Boeing, with some orders to Airbus for delivery in 20-nevernever to mitigate the eurowhining from across the channel.

That's how I'm going to call it.


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