To market

We’re heading into July – and that means it won’t be long before Farnborough Air Show time. That also means my marketing colleagues and I are busy formulating Boeing’s 2008 Current Market Outlook (CMO).

For us at Commercial Airplanes, the CMO is a road map that tells us how people are going to travel over the next couple of decades, and what our customers needs are going to be. The CMO helps shape our decisions on what products to bring to market, and when.

What we’re seeing in the marketplace, and focusing in on with our strategy as we go forward into the future, is providing the best possible options to travelers. That includes the option to travel direct - which incidentally turns out to be the most economic and environmentally-progressive option.

So, what do travelers really want?

Well, you want to travel to where you want, when you want to:

  • With a choice of convenient departure and arrival points
  • At the lowest possible cost
  • While being environmentally responsible
  • And with reliable service
  • Wherever you are in the world
  • While enjoying a reduction in government-imposed restrictions, allowing you to fly direct, nonstop, or with as few stops or connections as possible on the way
  • All the while experiencing a comfortable environment on board an airplane with the best amenities

Our Current Market Outlook is based upon these universal desires of air travelers and the way that airlines have and will meet those desires. When the 2008 CMO comes out next week, we’ll also be talking about passenger growth, and the more and more routes becoming available to greater numbers of the world’s population. And how the shift is not to very large airplanes, contrary to the views of our competitor.

But how about my points above regarding what the traveler of the future is going to want? Have I missed anything?

Comments (15)

Jose Sergio Osse (Sao Paulo - SP - Brazil):

What about security and flight safety issues? Are they valuated an taken into account for your CMO? What are its influences?

F. A. Borowiecki (Everett, Washington, USA):

The traveler of the future also wants (whatever it is) right now. We have become a world accustomed and addicted to speed and instant gratification.

How else can we explain the popularity, growth, and continuing success of such diverse items or topics as fast-food, 'right-turn-on-red', communications and personal electronic equipment, and quick weight-loss programs?

Speed has permeated our society to the effect that people oft-times find it difficult to wait, and the flying population certainly doesn't want to wait to board the airplane, to stow their luggage overhead, to get into their seat, for the airplane to get to where they are going, to de-plane, and finally to get their luggage and get to their final destination.

William Bath (St. Louis, Missouri):

I'm a little surprised that "safety" does not show up at or near the top of what air travelers want and expect. Perhaps this is because air travel is already recognized as a safer way to get from "A" to "B" than by car or other means.

However, I believe it (safe arrival) is a fundamental expectation of all air travelers. Boeing is in a unique position to devise and incorporate features and systems that make flying on Boeing airplanes as well as in the airspace system safer for all the traveling public. We should not neglect this opportunity...

Dan McKessy (Everett, WA):

Providing flexibility to passengers with smaller airplanes may pose a problem in terms of Air Traffic Control and airport slot availability. Is our Outlook balanced in this regard?

Patrick McArdle (Seattle, WA, USA):

Your list does not explicitly mention the most important attribute: safety. This omission may be an admission of our great success. We have built a very safe air-transport system, with such low levels of risk that we take safety for granted.

Boeing makes very good airplanes, and works with regulators and operators to assure safe, reliable, and economical operations. The benefits of aviation are reaching more people than ever, sometimes via new carriers, who may lack the experience and culture of safety which older operators have.

Even as well-established a regulatory climate as the United States can have problems; witness the recent failure of our FAA to mandate proper structural inspections of aging airplanes. Keeping our culture of safety vibrant, and ensuring all of our new partners receive this culture from us, will be one of our big challenges.

--------------

Patrick,

My apologies. It was not my intention. Safe and reliable service is paramount to everything we and our customers do.

- Randy Tinseth

Walt Anderson (Bellevue WA):

As a traveler, I also want convenient amenity choices. I recently travelled on an airline that had seatback LCD screens that offered entertainment as well as food options. I was able to order food and drink, and pick the movie I wanted to watch (I was able to choose from 12, plus TV shows and music videos.) prior to takeoff, and by the time the food cart arrived, my order was provisioned, and I had already started watching the movie.

I didn't mind having to pay for the movie and food, because I was able to get what I wanted, and because the LCD screen contained a card swipe reader and accepted my Mastercard. I also didn't mind the wait to takeoff because I was pleasantly distracted by the movie. The airline offered two wine choices as well, and because the ordering page was malfunctioning, the wine was free for the asking on that particular flight.

Richard Loftis (Everett, WA.):

Your list includes reliable service which is the key to flight schedule integrity and airline profitability.

Flight schedule delays are the most economically damaging events that air carriers face today. A single snow storm at a major hub can cause departure delays that ripple across the country and disrupt flight operations, costing air carriers millions of dollars and frustrating thousands of passengers. Boeing needs to develop a ground based anti-icing system that keeps lifting surfaces free of contaminants during winter weather events. The 787 composite structures contain a copper mesh which could be heated to keep snow and ice from adhering to the surface. This ground based system would be powered by standard GPUs while the aircraft is at the gate, and would greatly reduce the time, costs, and delays associated with flight line deicing operations.

Airlines face a difficult operating environment today with rising fuel costs and customer dissatisfaction. Boeing can revolutionize the industry by building aircraft that are self-deicing, environmentally friendly and efficient to operate.

Norman (Long Beach, California, United States):

This is a very accurate list of what passengers want,
and what they should expect. If I may add to this list it would be a plan to improve air traffic control, hiring new tower officers, updating the manual system in ATC and make more efficient vectors for air traffic.

Passengers do enjoy a variety of airports around the vicinity of a large city, most people prefer the least busy airport in the area and or the closest
eg. LGB,ONT,BUR,SNA to LAX, HOU to IAH, PIE to TPA.

Most passengers especially today with high gas prices "car and plane" want the cheapest prices that they can get, the 787 and the 737 "next gen" is the best way an airline can save money.

The 787 is the most environmentally responsible airliner in the market, companies like Boeing, GE, and Rolls Royce lead the way, not an ideologically divided government with only low expectations.

Reliability and safety is thankfully one trend and the most important one that has consistently gone up every year, every decade, since the beginning of commercial aviation, though the quality of service in passenger amenities has declined steeply, now you have to pay four dollars for stale peanuts, rock hard animal crackers, and the soft drink not of your choice, or just no amenities at all on a transcontinental flight, at least you are getting to your destination safely.

Most passengers prefer to get to their destination without having to stop at a hub city and worry about missing their flight or baggage. The 787 is built for that purpose, as well in that purpose it has a very long range. Though many 787's will be used in a hub format the 787 can be used to serve in "long thin" routs, Chicago to Warsaw, New York to Muscat,
and Los Angeles to Brisbane.

Government deregulation around the world will help airlines save money and cut down in flight time hours
and ultimately benefits both the airline and it's customers, certainly a positive trend in the world industry. Planes like the 777 and the 787 where where designed with this trend in mind.

The Boeing 787 looks to be the most comfortable airliner for passengers, amenities like a wide cabin in the eight-abrest format, large windows, LED lights, high humidity, and higher pressurization.

Air transportation is certainly the the safest form of mass transit in the world in part do to the training on pilots, crews, and mechanics.

Paulo M (Johannesburg, RSA):

Interesting times to market. As Boeing - and a industry at large - head for Farnborough 2008, and Boeing prepares its 2008 edition of the CMO, it will certainly be an interesting time to take note of the most intense flight testing phase for new jets at Boeing in a long time. Quite a lot of new ideas to join an excellently performing fleet of longer-range 777-300ERs, 777-200LRs & Next-Generation 737s.

martin nix (everett):

Yea, Randy, back in 1980, I worked for Sales and Marketing doing the CMO Multiple Regression Analysis. Something that always bugged me was Boeing's religion that the high price of fuel would never happen...and that only energy efficiency was the important thing.

Today nearly twenty years later, reality has sunk in. The high price of oil, and resulting conflicts over it, are a real threat to the airline industry. I think it is wonderful that finally, finally, finally, please finally the company is taking serious development of algae, garbage, waste and weeds to make aircraft fuel. The company for decades has been out of contact with reality over energy. Why wasn't this done back in 1980? Why didn't S&M take this crisis serious then?

Don Scheidt (Seattle, WA, USA):

The points listed are all very good, but somehow, I get the feeling that people are ignoring the elephant in the room.

What about the fuel that powers our elegant, magnificent flying machines? That "lowest possible cost" point is currently a tough one for our customers, and it's not doing CMO forecasts a lot of good either, is it? How are we addressing it, not just with the fuel-efficient 787 and 747-8, but beyond?

Jari V (Helsinki, Finland):

Amenities are important during long flights and at least to us home captains, ie. flight simmers the personal display/tv could give more than the usual movie. We would love PFD and ND as well as outside camera view selectable to display. Heh something other planes don't have. Pilots could also write short messages to some area in display, if this is technically possible. Many people don't understand well English and text is easier to understand. Even in emergency some text in different languages comes much more quickly than announcements. The display could be used much more than nowadays. Really waiting the nice new bird.

Sumit DasGupta (Austin, TX, USA):

And in addition, as all customers would like at a minimum, being treated with dignity and respect by airline staff on the ground and in the air.

FMB (Austin, TX):

I would love anything that helps us sleep through a potentially long flight. This includes seats, air controls, IFE, humidity, etc.

I must admit that I wonder about this dimming technology that is to be deployed on the 787... I hope we will all still be able to sleep. I worry that the "sunglasses" effect may let way too much light in the cabin. But all in all, the number one goal I usually have is to peacefully doze off ;-)

David Dapice (Medford, Massachusetts):

Wouldn't it make sense to make different passenger growth forecasts depending on the price of JetA? I can see very different demand levels at $2, $4 or $6 a gallon. Scenarios rather than point estimates might make more sense, especially if leisure travel is very price sensitive.

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