Boeing may re-wing 777 to snare jet, tanker orders from Airbus

Posted Jun 16th 2009 6:30PM by Joseph Lazzaro
Filed under: Boeing Co (BA)

Kudos to The Boeing Company (NYSE: BA): when a new technology won't do (for the immediate future, anyway), they re-vamp and re-deploy some of the old to best a competitor.

Stung by production and first flight delays to its next-generation 787 Dreamliner, Boeing announced Tuesday that it may build a new wing for the 777, an existing long-range, wide-body airliner, Bloomberg News reported. Boeing's shares fell 65 cents to $48.87 Tuesday afternoon.

An improved 777

The wing will increase the 777's fuel efficiency, allowing the plane to compete better against Europe-based Airbus's A350, which Airbus expects to deliver in 2013.

The delay in the 787 Dreamliner created a void that the 350-seat A350 is filling: the A350-1000 carries 60 more passengers than the 787, but the 370-seat, re-winged 777 should grab-back some orders that may have shifted to Airbus due to the A350's higher passenger capacity. Boeing can also use a tanker version of the 777 to re-bid for a U.S. Air Force tanker order that the USAF has put out for re-bid.

If it sounds like Boeing and Airbus are fiercely competing to snare orders from airlines, you're correct. The bottom line is that the 787 Dreamliner would best the the A350: among other advantages, the Dreamliner is expected to be the world's most fuel-efficient commercial plane, but a commercial plane that's not in the sky doesn't help airlines, which underscores the serious commercial consequences of delivering a plane late. Boeing's re-winged 777 will bridge part of that gap, and quite possibly create a new cycle of service for a very safe, reliable plane.

Boeing said Tuesday it expects a first flight for the 787 to take place by the end of June, Bloomberg News reported. Further, Japan's All Nippon Airways Co. said it has been told it will receive its first 787 in February 2010.

Stock Analysis: Boeing shares remain a Don't Buy, pending 787 test results. Further, if you already own shares I would not add to the position at this time.

Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.

Tags: Airbus, BA, inthenews

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Reader Comments (Page 1 of 1)

6-16-2009 @ 7:47PM

zd14689 said...

Boeing was very condescending when the A380 was delayed and now they are tasting their own bitter medicine. Manufacturers are telling in today's date the clients what they want to hear and not what reality is. Neither Airbus nor Boeing are any different. They both build very nice aircraft's that have their advantages and disadvantages.

In the end if Boeing is going to re-wing the B777 to compete with the A330 for the Airtanker deal, than I have to ask my self the question why did we resented the contract that was awarded to Airbus? In the end Airbus was right and Boeing was wrong with the aircraft they offered. And because of that Boeing wanted a do over? They knew that they had an inferior product and needed a reason to get back into the game after making bad decisions? And how long is that going to delay the purchase of new aircraft's for our Air Force that they so badly need? Do they have to wait another 5 years before they finally can receive the first aircraft?

At the end, both manufacturers have their place in the game and will always be in a competition of who is #1 and who is is #2. No matter what they always will compete, just that this time they won't be able to buy each other.

6-16-2009 @ 8:07PM

Hugh Jampton said...

Is there any truth to the rumour that Boeing are offering a souped up version of the B17 for use as a tanker.

6-16-2009 @ 10:46PM

Nergol said...

No, I'm pretty sure Boeing will not be offering a souped-up version of the B-17 to the USAF any time soon. Nice thought, though

6-17-2009 @ 6:31AM

sgentilejr said...

The ongoing Boeing Vs Airbus battle will be over in a few years when China starts selling lower cost commercial aircraft. It is sad, but that is how the Chinese operate. They copy and duplicate other companies products, cut corners and lower the quality so they can sell for less and take over the market.

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8-26-2009 @ 7:09AM

seo.sunilsahal said...

I have the impression the 777 is much heavier, more expensive to buy and operate then e.g the KC767 and KC30. Does it even meet the 7000ft runway requirements? I don't think so.
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