Challenging times

I’m back at the blogging desk after a brief absence. Family and civic responsibilities have been keeping me busy. This past week I was serving on jury duty. Never did get to serve on an actual trial, though.

But my other duty did see me serving as a chaperone for my youngest son’s 5th grade class on their outdoor “learning experience” at Camp Colman just outside of Seattle. Spending 3 days and 2 nights with 75 ten and eleven year olds - believe me, there’s nothing quite as rewarding, exciting, and challenging!

Except maybe when you consider the challenges our industry is facing right now. You’ve seen the news these past couple of weeks about U.S. carriers trying to cope with high fuel prices. It’s an extraordinary time and airlines are in a difficult position, especially those in the United States. They’re moving quickly to respond to these challenges.

With fuel prices at unprecedented levels, several U.S. carriers have elected to reduce capacity later this year. What we’re seeing is the removal of the oldest and least efficient airplanes from fleets - the MD-80 series aircraft as well as “Classic” 737 airplanes (737-300, -400, and -500).

You might ask, what does this mean for Boeing and for the industry as a whole? It means that airlines will continue to have strong demand for the world’s most capable and fuel-efficient commercial airplanes - such as the Next-Generation 737.

image/photo

Coming off the assembly line: the Next-Generation 737 - the most modern, most fuel-efficient airplane in its class.

The “Next-Generation” is much more efficient than older “Classic” aircraft.

When you compare a 737-800 to an MD-83, for example, the 737-800 carries about 18 more passengers, has about 720 nautical miles more range, a 17% lower fuel burn per trip, a 27% lower fuel burn per seat, 19% overall lower cost per seat, and a 50% smaller noise footprint.

This is why there are 2,200 Boeing Next-Generation 737s on order right now. So, just how efficient is the Next-Generation 737? Some argue that it is as fuel efficient (or more) as a Toyota Prius. Check out this interesting piece.

My thought - if you were really to drive from New York to Los Angeles as they suggest in the story, it would take a couple of days by car nonstop instead of just a few hours by air. As the article points out, “if you have to be somewhere and you don’t want to waste a lot of gas” and if you don’t want to leave a big carbon footprint, a Next-Generation airplane is the way to go.

But getting back to the recent challenging times for airlines - we definitely share our customers’ concerns about fuel prices. We’ll continue to be focused on staying close to them, and as their partners, provide fuel-efficient technologies and solutions.

Comments (7)

Yvonne Fang (Tianjin, China):

Yeah, the high fuel price is really a big challenge for airlines.
Look forward to your support and great solutions.
ps: You are also a great father.

G (France):

It is very delighting to read, "But my other duty did see me serving as a chaperone for my youngest son’s 5th grade class on their outdoor “learning experience” at Camp Colman just outside of Seattle. Spending 3 days and 2 nights with 75 ten and eleven year olds - believe me, there’s nothing quite as rewarding, exciting, and challenging!", in a corporate blog like yours.

We appreciate to see that people "up there" are not so different from us. You also have children, you also have civic obligations and you also have very much normal social life. I suppose you must pay high gasoline price like anyone of us and you must also suffer from this increasing inflation.

Thanks for posting your story.

Now, let's come back to serious matters.
Yes, the industry lives a very challenging period. I remember having posted this comment about a year ago. "The US property bubble popped about one year ago. A serious economic downturn is likely to follow in the coming months. I think the current airplane order frenzy will cease around mid 2009. The turbulence may start sooner if some major and unexpected events happen before 2009."

It seems that things happen a little bit faster than I anticipated. Who would have thought one year ago that prices of oil based products would go to such a high level? In 2003, jet-fuel price was at about 90 cents per US-gallon. Today, its price is almost at 4 dollars per US-gallon. It is not a surprise that airlines ground airplanes and that some of these airlines simply disappear.

Many orders will be canceled and deferred, this is absolutely sure.

Now, we have to see it on the brighter side. This crisis will push airplane manufacturers to think about even more efficient products. The parked airplanes may never get airborne again if you introduce better products in several years when we will be getting out from this crisis. Your engineers will have to work hard today to be able to present something good when this tsunami will be over.

James (Honolulu, Hawaii):

The older airplanes the airlines are parking in the desert... that's a lot of aluminum, plastics and other materials... anybody ever thought of recycling those birds?

Chris C / South Africa:

No doubt these are particularly worrying times for our industry with the fuel-price around USD $130/barrel. The only positive factor I can think of out of this unprecedentedly high fuel price is that it propels the aviation world to seek the most fuel-efficient airplanes, despite their new acquisition costs, and further, creates a heightened sense of urgency for the airframe manufacturers to continually invest in new technology to create super-efficient airplanes, such as the 787 Dreamliner and the A350.

A great example at seeing how continued investment in state-of-the-art technology has dramatically helped fuel-efficiency can be seen with the phenomenal 747. When the “ageless” 747-400 took flight in 1989, some 20years after the first 747-100, it boasted being 37% more fuel-efficient than the 747-100, and today, 20 years on, we have the 747-8 boasting at being 16% more fuel-efficient than the 747-400!!

Paulo M (Johannesburg, RSA):

The CNN "interesting piece" applies:

A while back, a local weekly motoring paper published a piece on the the most efficient modes of transport - but left out air transport. I couldn't resist the opportunity - and won letter of the week! Basically, I demonstrated how some of the motor industry's leading green cars (Toyota Prius & Tata Neon) compare to the Boeing 747-8 Intercontinental.

There has been much hype about the Tata Neon. It will achieve 20km per litre of fuel - or return a consumption of 5 litres per 100km. Of course, it's a no-brainer that the 747-8I goes further on less. I choose the 747 because you get a good forty years of comparisons with a single product - massively improved.

For the 747-8I, you're looking at a per seat/mile cumulative improvement of around 40% over the 747-100. And this measure still obscures the massively improved capabilities of the aircraft overall - in areas such as cargo lift and, the fact that it is the fastest cruiser still. (The fastest cars tend to be the least efficient.)

There's also the constant fairy tales about commercial aviation (see Randy Baseler: 14 June 2006 - Myth-busting). This week, the entire tourism industry got some slack in a local business daily - accounting for about 5% of all global emissions. The air transport category accounts for about 40% of that 5% - about 2% of the global figure. Interesting figures, when you consider that tourism is the world's largest employing industry. Also of interest, is that the world's telecommunications networks, devices, etc., have been quoted to account for about 2% of global greenhouse gas emissions.

I suppose, this is what you should expect in a high-flying industry. It's all about higher, faster & further - with green additives cleaner, quieter & more efficient.

Norman (Long Beach, California, United States):

Glad to have you back! I know about jury duty, I had to do it twice and even though I did not get selected to serve in the jury, the second time around, the multiple felon defendant had outbursts and was swearing in the jury selection. No kidding.

I am glad schools are still participating in the camping experience for the fifth grade as it was when I was in the fifth grade, we camped up in Lake Arrowhead near San Bernardino.

High fuel prices are in everybody's mind now that
fuel prices is now at $137 today.

US airlines are certainly experiencing the brunt
of the fuel crisis as American is grounding a multitude of MD-80's, and United is grounding 94 737's, and six 747-400's.

Unfortunately the mind set ten to twenty years ago
in the US airline industry when fuel prices where low and stable was that the age of aircraft and the fuel consumption of the engines was not a top priority. At the time a good second hand sixty's era jetliner at a low price was better most of the time than buying or leasing a new fuel efficient airliner. Though fleet cutting would still happen as we see in many modern fleet airlines around the world, perhaps we would not have to see our airlines
have to eliminate one-fourth of their fleet to stay
solvent.

The third generation "next generation" of 737's have
been an example of fuel efficiency, as well as ease of maintenance, and lower noise. The fuel efficiency of the 737 as well as the advent of discount airlines that has sprung around the world has made the next generation of 737's a phenomenal seller and one that will continue to sell well in to the next decade.

The Boeing 787 sales spree is based on the aircraft being fuel efficient twenty percent more so than it's already fuel efficient competitors like the 767 and the A330, so I found it rather amusing when according to the Seattle Post Intelligencer via Airliners.net Airbus Chief Operating Officer John Leahy said that the "787-8 is to small to be a wide-body plane" and even said "I'm even discovering that
my A350-800 might be a bit small", well with over 800 787-8's on the order roster, maybe Leahy is purposely overlooking an important market segment to make a case even against his own A350-800.

Nick Hein (Morgantown, WV):

I'm a former McDonnell/Douglas and Boeing employee. In the late 1980's I worked in transport design on propfan and unducted fan concepts that came about because of the first fuel crisis. We were predicting improvements this technology would bring about 60% lower fuel burn. The concepts were shelved shortly after because fuel prices came back down and no one wanted to pay for the development of something that might take years to pay off. I know that larger ducts on turbofans brought about some improvement in efficiency, but I'm wondering if you know how much that change is by comparison. (I'm thinking the comparison then was made to an MD88.)

What I'm really wondering is whether the propfan will be economical this time. I know that conditions have gotten bad enough so that cruise speeds could be lowered, which would bring about additional savings.

I'm passionate about sustainability (to the point that I have given up driving and cooking) and would like to see airliners be as efficient as possible.

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