Airlines begin push for discounted end-of-line 777s

Airlines are beginning to push for discounts on current generation Boeing 777s, as the airframer looks to bridge a gap in deliveries until the 777X enters service at the end of the decade.

“I think it is common knowledge that aircraft tend to be sold to large and good customers with substantial discounts,” says Christoph Franz, chief executive of the Lufthansa Group, on a potential 777 discount during a media event in New York on 30 January. “So, the question of if there is additional discount to the existing discount, that is an interesting question. Hopefully, we would be able to achieve this discount.”
The list price of a 777 freighter is $300.5 million, according to Boeing.

Photo Credit: Flight Global

The group’s freight arm Lufthansa Cargo operates two 777 freighters with three more on order. However, it has not selected a replacement for the 13 Boeing MD-11s that will remain in its fleet after the last 777 delivery in 2015.

“There are at least 13 MD-11 freighters waiting for roll over,” says Franz. “For us, this gives a perspective that there will be demand in the future for further freighter aircraft and the 777, as we have already five on our orderbook, is a nice aircraft and hopefully we would be one of the customers.”

This is where further discounts could come in.

The Chicago-based airframer faces a steep drop in 777 deliveries after 2016. Deliveries will fall to just six in 2018 from 56 in 2016, Flightglobal’s Ascend Online database shows. They pick up again with the entry-into-service of the 777-9X in 2020.
Boeing acknowledges a need to fill this gap.

“We anticipate being able to build that bridge over the next number of years as we approach 2020,” said Jim McNerney, chairman and chief executive of Boeing, during an earnings call on 29 January. “We are working with [customers] on combined orders for the current 777 as well as the new one. And we anticipate at least the same kind of result that we had with the [7]37.”
Boeing has discounted end-of-line next generation 737s, which helped it land an order from Ryanair for 175 737-800s in March 2013. Deliveries will continue through 2018.

The first 737 Max delivery is scheduled for the second quarter of 2017.
Boeing’s cost control initiatives are critical to any 777 discounts. These include the partnership for success programme where the airframer is forging long-term partnerships with certain suppliers in order to reduce costs in the near term, and its new contract with the International Association of Machinists and Aerospace Workers (IAM) for work on the widebody.

McNerney implied in his recent comments that these initiatives will likely help Boeing maintain its profit margins on the current generation 777 during the bridge.
“Now the partnering for success will be hitting it's mid-stride right around the time that the [777] bridge is being implemented and that’s not by accident,” he said.

In addition to discounts, Boeing could reduce the production rate of the 777 from 8.3 per month – about 100 aircraft per year – to help counter the gap in deliveries.
Lufthansa Cargo became the first operator of the type in the group, when it took delivery of its first 777 freighter in November 2013.

Entry-into-service was uneventful, says Franz. “The best news of it – I didn’t get any complaints,” he says.
Swiss will begin taking delivery of six 777-300ERs begin in 2016 and Lufthansa has an order for 34 777-9X aircraft with deliveries beginning after 2020.

Flight Global

Boeing Joins New BIOjet Abu Dhabi Team to Grow Biofuel Supply Chain in United Arab Emirates

- Collaboration focuses on research, feedstock production and refining capability

- Announcement follows Etihad 777 biofuel demonstration flight in Abu Dhabi

ABU DHABI, United Arab Emirates, Jan. 19, 2014 /PRNewswire/ -- Boeing [NYSE:BA], Etihad Airways, Takreer, Total and the Masdar Institute of Science and Technology today announced they will collaborate on a new initiative to support a sustainable aviation biofuel industry in the United Arab Emirates.
BIOjet Abu Dhabi: Flight Path to Sustainability will engage a broad range of stakeholders to develop a comprehensive framework for a U.A.E. biofuel supply chain. This initiative will focus on research and development and investments in feedstock production and refining capability in the U.A.E. and globally.

Boeing Joins New BIOjet Abu Dhabi Team to Grow Biofuel Supply Chain in United Arab Emirates.

Boeing, Etihad Airways, Takreer, Total and Masdar Institute of Science and Technology today announced they will collaborate on a new initiative, BIOjet Abu Dhabi: Flight Path to Sustainability, to support a sustainable aviation biofuel industry in the United Arab Emirates. Pictured here, Etihad Airways conducted a 45-minute demonstration flight on Jan. 18 with a Boeing 777-300ER (Extended Range), powered in part by the first sustainable aviation biofuel produced in the U.A.E.

Etihad Airways showed the promise of this homegrown effort yesterday with a 45-minute demonstration flight in a Boeing 777 powered in part by U.A.E.-produced sustainable aviation biofuel. The biofuel was partially converted from plants by Total and refined into jet fuel by Takreer, a wholly-owned subsidiary of Abu Dhabi National Oil Co. (ADNOC). U.A.E. is now among a handful of countries that have produced and flown on their own aviation biofuel, which emits at least 50 percent less carbon dioxide than fossil fuel over its lifecycle.
"In collaboration with our key partners, our goal is to support and help drive the commercialization of sustainable aviation fuel in Abu Dhabi, the region and also globally," said Etihad Airways President and CEO James Hogan. "We have made some important first steps in this process and our continued focus will be to develop further initiatives such as this which will facilitate the availability of sustainable aviation biofuels for Etihad Airways in the coming years."
Boeing and Etihad Airways are also among the founding partners of the Sustainable Bioenergy Research Consortium, hosted by the Masdar Institute in Abu Dhabi. The consortium has been researching and developing salt-tolerant plants that would be raw material for the same refining processes used to produce renewable fuel for the Etihad Airways flight.
The flight and BIOjet Abu Dhabi announcement lead into Abu Dhabi Sustainability Week and the World Future Energy Summit. These activities and Masdar Institute's aviation biofuel research are aligned with the Abu Dhabi Economic Vision 2030, which seeks to develop sustainable energy sources to diversify the U.A.E. economy and increase workforce opportunities for Emiratis.



"With further commitment and investment, the U.A.E., a global leader in commercial aviation, is well-positioned to lead efforts to make our industry more sustainable," said Jeffrey Johnson, president, Boeing Middle East. "Boeing works with partners around the world to advance sustainable biofuel development and sees great opportunity for BIOjet Abu Dhabi to have a positive impact in the U.A.E. and globally."
"Takreer is proud to have been involved in refining this aviation biofuel at its Abu Dhabi research center," said Takreer CEO Jasem Ali Al Sayegh. "We support the concept of using biofuel as a sustainable aviation fuel for a cleaner future in line with ADNOC's sustainability policy. We see this strategy as complementary to our future plans in meeting the rapid growth in demand for jet fuel in the country and the region in view of the expansion of the operations of airlines here."
Etihad Airways is an airline industry leader in supporting the development of lower-carbon renewable fuels. A member of the Sustainable Aviation Fuel Users Group (SAFUG), the airline operated the Gulf region's first biofuel flight in January 2011 with a Boeing 777 delivery from Seattle to Abu Dhabi powered by a blend of petroleum-based and certified plant oil-based jet fuel.
Boeing collaborates with airlines, research institutions, governments and other stakeholders to develop sustainable biofuel supply chains around the world, including the United States, Middle East, China, Brazil, Europe and Australia.
For more information, visit http://www.boeing.com/boeing/aboutus/environment/

Source - Boeing Media

Boeing in 'advanced discussions' over 777s for China

Boeing says it is in "advanced discussions for a significant number of 777s in greater China", elaborating on commercial airplanes CEO Jim Albaugh's comments regarding having sold 30 777s to Chinese carriers in recent weeks.
"I think you're going to see sales of narrow-bodies and wide-bodies continue to grow. I'm pretty excited about it. I sold 30 777s over [in China] last week and have a lot of discussions with other customers about more," said Albaugh at the JP Morgan Aviation, Transportation and Defense conference in New York.

Boeing clarified that its discussions are being held with "all airlines in Greater China for 777s", and the 28 February order for 10 777-300ERs for China Southern Airlines was likely to be included in the total for 30.
Orders by state-owned Chinese carriers require government approval before being officially added to Boeing's backlog.

Albaugh expects Boeing to earn more than 84 orders for 777s this year, as he anticipates bookings for the wide-body to exceed deliveries. Boeing's 777 production rate is currently running at seven 777s per month, with plans to go to 8.3 later in the year.

The 777 is expected to follow a wider trend for Boeing orders in 2012 with Albaugh's expectation of a book-to-bill ratio above one as it looks to firm the more than 1000 commitments it holds for the re-engined 737 Max. Additionally, Albaugh said to expect 747-8 Freighter orders in the "next several months" despite softening in the global air freight market. Boeing forecasts delivering between 585 and 600 aircraft in 2012.


Flight Global

Boeing Celebrates 1,000th 777

EVERETT, Wash., March 2, 2012 /PRNewswire/ -- Boeing (NYSE: BA) and more than 5,000 employees, suppliers, customers and government officials celebrated the 1,000th 777 at a special event today. The 1,000th 777 jetliner will be delivered to Dubai-based Emirates later this month.

"As the largest 777 customer, it's very appropriate that Emirates is the recipient of our milestone 1,000th 777," said Jim Albaugh, president and CEO of Boeing Commercial Airplanes. "Emirates has set an industry high bar in providing excellent customer service and we're honored that the 777 is central to its efforts to be a global airline leader."

Last year was the best year on record for 777 sales with 200 orders from 22 customers – topping the previous record of 154 set in 2005. Production is at an all-time high for the program and a 20 percent rate increase begins this fall, increasing from seven to 8.3 airplanes per month. The program will begin building 100 airplanes per year beginning in 2013.   

Emirates is the 777 program's largest customer with 102 777s now in its fleet and 84 passenger airplanes and nine freighters on order. Emirates is the only airline that operates all six members of the 777 family.
"Emirates is honored to be the recipient of Boeing's 1000th 777 aircraft whose advanced long range capacity has been instrumental in our success of becoming a truly global airline," said His Highness Sheikh Ahmed bin Saeed Al-Maktoum, chairman and chief executive, Emirates Airline and Group. "As the world's largest operator of the 777, we have 93 more 777s on order, which is testament to our belief in the product and the role this aircraft will play in our goal to further establish Dubai as a central gateway to worldwide air travel."
"
The ultimate measure of success in this business is when you reach the 1,000 mark," said Larry Loftis, who until recently was vice president and general manager of the 777 program. "Reaching this milestone puts the 777 in an exclusive club and I would like to thank all our employees, suppliers and customers who made it possible."

"Reaching this milestone requires two things," Loftis added. "A product that provides exceptional value and a world-class production system to reliably bring that product to the marketplace – and we have both on the 777 program. As a result, the 777 program reached this milestone faster than any other twin-aisle airplane because of the 777's proven performance, exceptional value, continuous innovation and progressive environmental performance."

The 1,000th 777 is a 777-300ER (extended range) model that seats 360 passengers in a three-class configuration. To date, Boeing has recorded orders for 1,361 777s to 64 customers around the globe. 

Boeing Media

Boeing's Statement on China Southern's Commitment to Buy 10 777-300ER

SEATTLE, February 28, 2012 – Boeing [NYSE: BA] announced today that China Southern Airlines has agreed to buy 10 Boeing 777-300ERs, as the airline plans to expand its capacity to meet growing demand in Asia-Pacific and China.

“We’re very pleased that China Southern, which has been a staunch 777 supporter from the very beginning of the program, has once again selected the 777-300ER to serve its passengers and to deliver value to its bottom line,” said Ihssane Mounir, vice president, Sales, Boeing Commercial Airplanes.

The Boeing 777 is the world's most successful twin-engine, long-haul airplane. The 777-300ER extends the 777 family's span of capabilities, bringing twin-engine efficiency and reliability to the long-range market. The airplane carries 365 passengers up to 7,930 nautical miles (14,685 km).

Boeing incorporated several performance enhancements for the 777-300ER, extending its range and payload capabilities. Excellent performance during flight testing, combined with engine efficiency improvements and design changes that reduce drag and airplane weight, contributed to the increased capability.

The agreement requires Chinese Government approval, and Boeing looks forward to working with China Southern Airlines, a long-time valued customer, to obtain approval. Once approval is attained, the order will be posted to Boeing's Orders & Deliveries Website.

Boeing Media

Boeing's Order and Delivery Page

Boeing, Pakistan International Airlines Finalize Order for Five 777-300ER

• Pakistan order also includes purchase rights for five additional 777-300ERs
• Twin-engine jet order completes Pakistan's flag carrier's wide-body fleet replacement program

EVERETT, Wash., Feb. 20, 2012 /PRNewswire/ -- Boeing [NYSE: BA] and Pakistan International Airlines today announced a firm order for five 777-300ER (extended range) airplanes. Valued at nearly $1.5 billion at list prices, the order also includes purchase rights to Pakistan International Airlines for five additional 777-300ERs.

Based in Karachi, Pakistan International Airlines has been renewing its long-haul fleet to accommodate increased demand for air travel as well as to introduce new routes. "With passenger traffic in our region accelerating, the new 777-300ER airplanes will continue to deliver the highest standards of technology and passenger comfort to our customers," said Capt. Nadeem Yousufzai, Managing Director of Pakistan International Airlines. "The spacious 777-300ER has been an integral part of our long-range fleet renewal program and its excellent operating economics, long range capability and reliability will allow us to expand into new long-haul markets."

Boeing Company Photos

In 2002, Pakistan's flag carrier became the world's first airline to purchase all three passenger models of the 777 Family and in that year was also the launch customer for the 777-200LR (longer range) airplane.
"We are proud that Pakistan International Airlines is a special Boeing customer that continues to invest and trust in the industry-leading capabilities of the 777 family of airplanes," said Marty Bentrott, vice president of Sales for the Middle East, Russia and Central Asia, Boeing Commercial Airplanes. "Boeing values the excellent partnership that was established over 10 years ago and one which we hope to continue well into the future as the airline progresses with its expansion plans."

2011 was the best-selling year for the 777 program with a net order book of 200 surpassing the previous record of 154 orders set in 2005. The 777-300ER brings new twin-engine efficiency to the airline's long-haul fleet. The airplane is powered by General Electric GE90-115BLs, the world's largest and most powerful commercial jet engines. The airplane also features the Boeing Signature Interior that offers wider seats, wider aisles, more headroom and more seating flexibility.

Boeing Media

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