DTN News - BOEING NEWS: Few customers For Boeing 747 Despite Upgrade

DTN News - BOEING NEWS: Few customers For Boeing 747 Despite Upgrade

Source: DTN News - - This article compiled by K. V. Seth from reliable sources By Julie Johnsson and Andrea Rothman
(NSI News Source Info) TORONTO, Canada - June 4, 2014: (CHICAGO) — Boeing’s iconic 747 jumbo jet is gliding deeper into its twilight years, with a new Air Force One fleet offering the strongest sales prospect for a passenger model that no longer fits most airlines’ needs.

Even as Boeing talks with Emirates airline about an order for the upgraded 747-8, the carrier played down the chances of a deal because it’s buying 150 Boeing 777X jets. That plane will be bigger and more efficient than the current 777, a twin-engine aircraft so capable that it’s cannibalizing Boeing’s jumbo sales.

Commercial success has proved elusive for the 747-8, the latest update to an almost 50-year-old plane known for its distinctive humpbacked fuselage. While the 747-8 is a lock to win bidding that opens this year to replace the president’s fleet, waning demand for the cargo variant further imperils an assembly line that has slowed to just one or two planes a month.

‘‘Air Force One is it, unless a miracle happens in the airfreight business,’’ said Glen Langdon, president of Langdon Asset Management, a San Francisco firm that has extensive experience selling used 747s and other wide-body freighters.

Discussions with Emirates were disclosed this week by John Wojick, senior vice president for sales and marketing at Chicago-based Boeing’s commercial airplane unit, at the annual meeting of the International Air Transport Association in Doha. Emirates is the world’s largest international airline and it operates a fleet of A380s from rival Airbus Group.

Boeing is fighting to land customers, even using trade-ins of older models to seal deals. Boeing faces a ‘‘material’’ accounting loss if it can’t win sufficient 747 orders to recover the costs of development, according to a company filing. So far, Boeing has tallied just 51 sales for the passenger variant, known as the 747-8I or Intercontinental, since Deutsche Lufthansa AG placed the first order in 2006.

This year’s 747-8 order count: one. It wasn’t always so grim. Pan American World Airways announced a $525 million order for 25 of the first 747s in 1966, effectively launching a program that would go on to produce almost 1,500 planes.

But Boeing outdid itself with the 777-9X, the first twin-engine jet designed to carry a jumbo’s haul of 407 passengers. Meanwhile, a glut of the previous 747 iteration remain parked, and Boeing cut 747 production twice last year, to 18 jets a year, as the backlog dwindled.

‘‘We expect 747-8 sales to increase with the economy, and customers flying the airplane tell us they love its strong performance,’’ Randy Tinseth, a Boeing vice-president for marketing, said in an e-mail. ‘‘That’s why we continue to invest in the 747-8, to make it even better.’’

The 747-8’s likeliest sales are to the Pentagon. The Air Force is planning to upgrade the all-747 presidential aircraft fleet by 2023 and has also begun studying whether to replace the ‘‘Doomsday’’ fleet, four 747-200 jets hardened against nuclear blasts that provide a mobile military command, Charles Gulick, an Air Force spokesman, said in an e-mail.

The White House’s fiscal year 2015 budget proposes spending $1.65 billion over five years to replace its aging Air Force One fleet, which began ferrying President George H.W. Bush in August 1990.

*Link for This article compiled by K. V. Seth from reliable sources By Julie Johnsson and Andrea Rothman
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DTN News: Airlines News TODAY September 16, 2009 ~ Airlines May Lose $11 Billion, More Than Forecast

DTN News: Airlines News TODAY September 16, 2009 ~ Airlines May Lose $11 Billion, More Than Forecast

*Source: DTN News / Bloomberg By John Hughes (NSI News Source Info) WASHINGTON, USA - September 16, 2009: Airlines worldwide may lose a combined $11 billion in 2009, $2 billion wider than a previous forecast in June, as fuel costs rise and carriers earn less on fares and cargo, the industry’s main trade group said. Airline losses will be $3.8 billion next year, with “limited revival of growth in traffic volumes,” the International Air Transport Association said today in Washington. The estimate was the first by the group for 2010. The forecasts suggest that signs of improvement in many economies may be slow to trickle through to airlines, which are paring jobs and shrinking capacity in response to a drop in first- and business-class travel. The Montreal-based IATA said passenger yields, or average fare per mile, will fall 12 percent this year, compared with the 7 percent drop estimated in June. “The global economic storm may be abating, but airlines have not yet found safe harbor,” Giovanni Bisignani, IATA’s director general, said in a statement. “The crisis continues.” Revenue for the year is expected to fall 15 percent from 2008 to $455 billion, the IATA said in a statement. Oil prices are expected to average $5 a barrel more than in the group’s June forecast, adding $9 billion in costs for the industry, IATA said. The number of premium passengers paying higher-priced business fares will fall 20 percent, according to the IATA. Bisignani called the revenue drop “shocking” at a news conference, and said such a dramatic drop in yields would be the worst in IATA’s 65-year history. “We are in intensive care,” he said. Regional Forecasts European carriers will post the largest losses in 2009 at $3.8 billion, more than double the previous forecast, IATA said. A world-trade collapse hurt long-haul markets in Europe, and carriers were unable to cut capacity fast enough, the IATA said. North American carriers will lose $2.6 billion this year, also more than double the earlier forecast, the group said. In July, Continental Airlines Inc. said it plans to eliminate 1,700 jobs and Southwest Airlines Co. said 1,400 employees took voluntary buyouts, while United Airlines will shrink international capacity by an additional 7 percent. Delta Air Lines Inc. and the other big U.S. carriers are poised to make more cuts in available seats with the end of the summer travel season, capping the industry’s deepest retrenchment since World War II. Asia-Pacific carriers will post losses of $3.6 billion, in 2009, similar to the previous forecast, IATA said. Latin American carriers are expected to break even, and Middle East and African carriers will lose $500 million each, according to the group. Building ‘War Chests’ IATA revised its estimate of world airline losses in 2008 to $16.8 billion from $10.4 billion. The change was due to accounting differences, IATA said. Revenue isn’t likely to return to 2008 levels until at least 2012. Bisignani said. To sustain themselves for the coming winter, when traffic traditionally falls, airlines have raised $15 billion in cash as “a war chest, to fight the crisis,” he said. Airlines will see additional “casualties,” or bankruptcies, though Bisignani didn’t predict how many, or which airlines, may fail. Government should ease taxation on airlines and “consolidation is a must” in the industry, he said. The Bloomberg U.S. Airlines Index, made up of 12 carriers, has declined 16 percent this year, compared with a 16 percent gain for the Standard & Poor’s 500 Index. Investors may be starting to look past this year to gradual improvement in 2010. The airlines index rose 4.6 percent at 12:40 p.m. New York time, and has gained 9 straight days. To contact the reporter on this story: John Hughes in Washington at jhughes5@bloomberg.net.