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How Boeing Lured Airbus Into Now-Busted A380
Forbes ^ | February 14, 2019 | Peter Cohan

Posted on 02/24/2019 4:07:37 PM PST by SunkenCiv

It's an outcome that rival Boeing anticipated about 25 years ago when it outplayed Airbus with a brilliant bit of judo strategy (using Airbus's strength against itself), according to my 2008 book, You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing... As the Journal reported, in 2000, Airbus bet over $10 billion on the 555-seat A380 because it wanted to replace Boeing's 50 year old 747 jumbo jet. The A380 went over budget due to development delays and while passengers liked the plane, airlines preferred Boeing's 787 Dreamliner or Airbus's A350... This A380 denouement was envisioned by Boeing's former CEO, James McNerney... he saw that mid-sized planes in the point-to-point airline segment -- pioneered by airlines like Southwest -- would be more profitable than the long-range, hub-segment which flew passengers to big airports and let them sit for hours waiting for their connecting flights...

Boeing was considering whether to develop a "growth version" of the 747... to 500 seats from 420 seats... Boeing proposed to Airbus that the two companies conduct a joint study to assess the market potential for a replacement version of the 747. Why Airbus agreed to this joint study is not clear... In any event, at the end of the joint study, Boeing concluded that the super jumbo market would be far smaller than Airbus did. According to John Walsh, of Walsh Aviation, an aerospace consulting firm, Boeing estimated that demand for super jumbo aircraft would amount to 250 units while Airbus thought the market would total 1,000. At McNerney's urging, Boeing remained focused on market for intermediate-sized jets, which proved to be the better bet... Boeing believed that Airbus's internal conflicts would slow down its response to Boeing's success with the 787 in the mid-range market.

(Excerpt) Read more at forbes.com ...


TOPICS: Business/Economy; Travel
KEYWORDS: 747; 787; a350; a380; aerospace; airbus; boeing; dreamliner
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1 posted on 02/24/2019 4:07:37 PM PST by SunkenCiv
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To: AdmSmith; AnonymousConservative; Arthur Wildfire! March; Berosus; Bockscar; cardinal4; ColdOne; ...

and related to this, “...26% average annual stock price increase that it has generated over the last decade. (I have no financial interest in the securities mentioned in this post).”

http://www.google.com/search?q=boeing+stock

BA - Boeing Co (NYSE)

424.05 +6.69 (1.60%) - Feb 22, 4:00 PM EST
424.27 +0.22 (0.05%) - Feb 22, 6:08 PM EST After hours


2 posted on 02/24/2019 4:08:49 PM PST by SunkenCiv (and btw -- https://www.gofundme.com/for-rotator-cuff-repair-surgery)
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Will Boeing Do a Stock Split in 2019?
Even as the market has come under pressure, the aerospace giant’s shares remain pretty close to all-time highs.
Dan Caplinger
Jan 14, 2019 at 8:16AM
https://www.fool.com/investing/2019/01/14/will-boeing-do-a-stock-split-in-2019.aspx

Better Buy: General Electric vs. Boeing
The flight paths of these two aviation-focused companies have diverged significantly in recent years.
Lee Samaha
Jan 19, 2019 at 8:02PM:
https://www.fool.com/investing/2019/01/19/better-buy-general-electric-vs-boeing.aspx


3 posted on 02/24/2019 4:13:11 PM PST by SunkenCiv (and btw -- https://www.gofundme.com/for-rotator-cuff-repair-surgery)
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To: SunkenCiv

Regardless of the economics, I’ll miss the A380 once it’s gone - one of the quietest planes I’ve been on.


4 posted on 02/24/2019 4:13:58 PM PST by AnotherUnixGeek
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To: SunkenCiv

The Airbus was created for a hub system that is collapsing. Yes, for that UAE airlines the hub system works really well and simply as an accident of geography and some wise investment it will continue to work for them right up unit the Tribulation/Great Tribulation is underway.

The collapse of the hub system is inherently one caused by the fact that two engine planes can now service routes for what used to require (practically, not just legally) more engines.

Moreover, Airbus though was doomed because it was not designed to be from the start a cargo hauler the way the 747 was. It could have been a magnificent cargo hauler. But it’s not. The 747 as a sky truck will be nearly immortal as planes go the way the B52 has been.


5 posted on 02/24/2019 4:15:41 PM PST by Rurudyne (Standup Philosopher)
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To: SunkenCiv; Gamecock; SaveFerris; PROCON; Yaelle; Army Air Corps; KC_Lion
according to my 2008 book, You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing

It will also be in my book, "Astonishing Tales of the Sky."

6 posted on 02/24/2019 4:39:26 PM PST by Larry Lucido
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To: SunkenCiv

I was on a 12-hour flight from Frankfurt to Johannesburg aboard a Lufthansa A380. It was the worst flight of my life. Every seat was full. I was super cramped with no leg room. The in-flight movie/TV selections were also awful. I’m sure the Emirates A380 flights are much better.


7 posted on 02/24/2019 4:47:43 PM PST by Right_Wing_Madman
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To: Larry Lucido

I bought that book Gone With The Wind because I thought it was about airplane gliders.

You just can’t judge a book with two in the bush.....or something.


8 posted on 02/24/2019 4:48:51 PM PST by blueunicorn6 ("A crack shot and a good dancer")
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To: blueunicorn6

Which is why you never put all your books in one basket.


9 posted on 02/24/2019 4:52:28 PM PST by Bitman
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To: Bitman

Very few airlines need a long haul jet... the market is very small.

The A380 is a very good long distance jet but not many people fly 12 to 14 hours non stop to a destination.


10 posted on 02/24/2019 4:58:33 PM PST by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives In My Heart Forever)
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To: blueunicorn6
You Can't Order Change

Of course you can't order change. What would you pay with? Hot dogs? That's backwards.

I went to a Buddhist Learjet maker and said "Make me one with everything." He said "That will be $19 million." I gave him a $20 million bill and he said thanks. I said "Where's my change?" He said "Change must come from within."

I looked inside and there was a million in change.

11 posted on 02/24/2019 4:59:29 PM PST by Larry Lucido
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To: Bitman

See!

You and I think alike!

You should probably be really worried about that, though.


12 posted on 02/24/2019 5:01:30 PM PST by blueunicorn6 ("A crack shot and a good dancer")
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To: blueunicorn6

...I bought that book Gone With The Wind because I thought it was about airplane gliders.
...You just can’t judge a book with two in the bush.....or something

That’s about The stupidest thing I ever hear
I requires great talent to sound that... whatever

My hat off to you


13 posted on 02/24/2019 5:05:01 PM PST by HangnJudge
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To: SunkenCiv
I only scanned the article, however it seemed to miss the fact that (according to the late Joe Sutter, who was responsible for the747 design) double deck airliners suffered from a lack of cargo space for the number of peeps aboard, among other major issues. And, there were many double deck aficionados that had to be "won over" at the time.

The Boeing managers who chose to not go double decker were standing on Joe Sutter's incisive and brave shoulders.

14 posted on 02/24/2019 5:06:47 PM PST by Seaplaner (Never give in-never, never,never...except to convictions of honour and good sense. Winston Churchill)
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To: goldstategop

” but not many people fly 12 to 14 hours non stop to a destination.”


That seems to be coming more common-—several family members have done it several times,and these were not business trips.

.

.


15 posted on 02/24/2019 5:09:41 PM PST by Mears
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To: Larry Lucido

Oh no.

You’re probably a Zen Master, aren’t you?

I tried to do that medication once. You know, where you sit cross legged and hum Stairway To Heaven, but I fell asleep.


16 posted on 02/24/2019 5:13:44 PM PST by blueunicorn6 ("A crack shot and a good dancer")
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To: Rurudyne

“not designed to be from the start a cargo hauler the way the 747 was”

Why is the A380 difficult to convert to a cargo plane?


17 posted on 02/24/2019 5:15:22 PM PST by cymbeline
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To: SunkenCiv

With the 380 out of the way, there is talk here (Seattle area) of an updated 747 making a comeback should the need arise. Airports are already congigured for it (35+ years ago)


18 posted on 02/24/2019 5:16:03 PM PST by llevrok (Vote while it's still legal)
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To: goldstategop

“Very few airlines need a long haul jet... the market is very small.”

I know little about airlines but remember an airline executive saying that a surefire way to ruin an airline is to buy planes that are too large.


19 posted on 02/24/2019 5:16:48 PM PST by cymbeline
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To: cymbeline

Acess no big doors


20 posted on 02/24/2019 5:18:45 PM PST by al baby (Hi Mom Hi Dad)
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