When problems pile up, solutions run out. The axiom, as old as the wind, once again presents itself as an impossible dilemma for Boeing: with December 2022 – the maximum deadline for 737-10 certification under current conditions – just around the corner, the manufacturer decided to postpone the 777X program by another nine to twelve months, pushing the certification target to mid-2024 and to an entry into service date no earlier than 2025.
As initially reported by The Air Current and later confirmed by Reuters, the manufacturer’s decision is in line with Emirates CEO Tim Clark’s early April statement that he did not expect to receive his first 777-9 before 2025.
The 777X program, increasingly in jeopardy
Emirates, the largest customer for the model with 115 units ordered, would be able to cancel orders without penalty for delivery delays, as would all other customers in the program.
Emirates had signaled some time ago that it intended to switch its 777-9 order to the 787 Dreamliner, and this new delay could add another compelling argument for proceeding with the contract modification.
Qatar Airways, a launch customer for the 777X and embroiled in a particular dispute with Airbus over its A350s, has confirmed incremental interest in the cargo version of the aircraft, but it exists only in brochures now.
Old problems kill new products
The new certification date for the latest iteration of the Triple Seven family is postponed by the manufacturer’s need to focus on the two programs that – badly – give Boeing Commercial its life: the 737-10 and 787.
Both projects had a couple of years to forget: the MAX crisis severely knocked confidence in Boeing’s safety culture and the 787 encountered a series of production and process quality problems in the last year that stalled deliveries, which are expected to restart in the second half of 2022.
The MAX and Dreamliner problems put them head-to-head in a fierce competition to see which was the most expensive program in Boeing’s history, and the 787 still wins by some margin: $32 billion from the start of its design until today, adding fines, delays, redesigns, and penalties.
Let’s add to this dubious honor that, with 1,006 aircraft delivered and twelve years after its first flight, it has not yet reached the economic break-even point. In 2013 it was indicated that 787 project needed to reach 1,100 aircraft to cover costs, and that was one pandemic and seven hundred thousand problems ago.
With an adjusted backlog of 406 aircraft as of April 2022 it is highly likely that the 787, after 20 years of life as a program will be a technological marvel left with the heavy backpack of commercial failure.
On the other hand, the twenty billion that the MAX cost – after recertification and redesigns – considering that we are talking about a modification of the NG, is difficult to digest when the estimate for the development of a new aircraft to replace the 737 was estimated in 2011 to be in the range of 7 to 10 billion.
In this context, the American manufacturer desperately needs to certify the 737-10, because it seems to have made an almost impossible decision: Boeing sacrifices – initially, only in the timeline – the 777X market and allows the undisputed reign of the Airbus A350 in this segment so as not to continue losing ground in a market with a lower unit cost, but infinitely higher in volume: the segment in which today, the Airbus A321neo is king.
Size matters, but not the way you’re thinking
Commercial aviation has changed enormously in recent years and the pandemic (and its subsequent recovery scenario) made it clear that the time for heavy widebodies doing trunk routes seems to be over.
Lighter and more efficient aircraft, with more seats covering point-to-point routes at a lower operating cost per seat is the way the industry has found the demand from travelers. More seats in smaller airframes to allow for lower fares, even if a 7-hour journey with your knees pinned to the seat in front of you requires a visit to the nearest trauma center upon arrival. Be careful what you ask for.
Forecasts from the two major manufacturers anticipate that more than 80% of the new aircraft market over the next 20 years will be focused on single-aisle aircraft. Against that backdrop, splitting efforts to achieve 777X certification – and even moving forward with the development of an eventual freighter, the 777-9 Freighter – seems to take the focus away from what is economically viable.
Even if the new Triple Seven were to be a resounding success in its two variants and win all sales for the next two decades, we would be talking about a potential market of 8,000 aircraft. If we were a little more conservative (albeit optimistic) and Boeing were to achieve a healthy 50% of new orders, we would be looking at 4,000 orders. Two hundred aircraft per year. Seventeen aircraft per month.
Single aisle: past, present, and future cash cow
Neglecting the single-aisle segment means missing a potential market of 33-35,000 aircraft. 1,750 aircraft per year, or 145 aircraft per month. Using the same optimism, 825 orders per year and seventy-two aircraft coming off the production lines per month.
Comparing price tags (list price, because every negotiation is different), selling seventeen aircraft each month for 442 million is much worse than selling seventy-two for 134 million. With the numbers on the table, the 777X is not -or it shouldn’t be- a priority for Boeing. And frankly, putting the program to sleep will solve one problem.
The 737-10 has an uphill battle ahead of it. It has yet to complete its certification and if it is delayed beyond December 2022 it will have to seek a new type certificate, rather than being considered a variant of the MAX family. That will mean different training and certification requirements. And, under the FAA’s revised timelines for certifications following the confidence crisis left by the MAX, December is twenty minutes from now.
In the chess of the commercial market, Boeing decided to make a 777X Gambit. Whether the match has a chance of being saved, is a question that will take years to answer.
