PPRuNe Forums - View Single Post - Boeing says it could end 747 production
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Old 29th Jul 2016, 08:26
  #7 (permalink)  
philbky
 
Join Date: Jun 2008
Location: Kerry Eire
Age: 73
Posts: 609
Boeing's problem isn't just aviation or even airline driven. As a former US President once said, 'it's the economy stupid'.

Eight years ago the world economy slumped. This should have been the time airlines would have been ordering airframes to replace the 747-400 on a like for like basis.

There are very cogent reasons why they didn't. The trend to twins was, and still is, in full swing. Apart from fuel, spares and maintenance economies the downward pressures on air fares militated for big twins. With stormy economic conditions airlines looked to minimise the cost of fleet replacement. The same economic conditions cut the amount of freight being carried, and freight carried in passenger aircraft holds was, and still is, often the difference between a profitable flight and a loss.

Given a reduced economy, a reduced amount of freight, a reduced overall cost of passenger tickets and the ability of large twins to carry freight and at the same time reduce overall costs, it was a no brainer that the 747 replacement would not be on a like for like basis.

As for pure freighters, they are a niche market and, specialist carriers apart, with reduced levels of freight compared to previous years the major carriers found no need to buy.

Economists are good at telling us that the world economy is, in general, cyclical. What they are not good at, be they employed by governments, banks, companies or airlines, is forward thinking and planning for the cycle. Knee jerk reaction to economic change is the norm, with little forward projection.

What is unusual in the economic conditions experienced since 2008 is the sustained and growing numbers of passengers carried. This shows no signs of slowing and this brings its own problems.

VLAs will be required in the future both to carry ever growing numbers of passengers, large freight and to deal with slot restrictions. Whilst Boeing may well run down and eventually close 747 production, someone, somewhere will have to produce an equivalent.
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