The Boeing Aircraft Company celebrates its centenary
As Boeing turns 100, the planemaker and its rivals are celebrating with stacked order books, Grant Bradley reports
Planemakers are defying global economic uncertainty by booking huge orders, with Boeing forecasting that nearly US$6 trillion worth of aircraft will be needed in the next 20 years.
As it prepares to enter its second century of manufacturing, the company released its annual current market outlook at this week's Farnborough International Airshow.
"Despite recent events that have impacted the financial markets, the aviation sector will continue to see long-term growth with the commercial fleet doubling in size," said Randy Tinseth, vice president of marketing, Boeing Commercial Airplanes.
"We expect to see passenger traffic grow 4.8 per cent a year over the next two decades."
The market for single-aisle planes - which Boeing shares with Airbus' A320 family - would be especially strong, with low-cost carriers and emerging markets driving growth. More than 28,140 new aircraft would be needed in this segment.
"There's no question the heart of the single-aisle market is around the new Boeing MAX 8 and the current 737-800. Airplanes that size already account for 76 per cent of the global single-aisle backlog, and our products have the clear advantage in that space."
As well, there are 9100 widebody planes in the forecast, with a wave of potential replacement demand coming in 2021-28, Tinseth says.
In that segment of the market, Boeing competes against the Airbus A350XWB, A330 and A380.
The Chicago-based Boeing is the world's biggest producer of planes and is projecting a continued shift from very large aircraft to small and medium-sized widebodies such as the 787, 777 and 777X, which it is about to start building.
That trend to smaller planes trend became starker at Farnborough this week when Richard Branson's Virgin Atlantic opted for 12 of Airbus's A350-1000 twin-engined jets after progressively shelving its longstanding order for A380s, the biggest passenger jet in the sky.
Airbus this week revealed that the build rate for the double-decker will be slashed by more than half to one plane a month by 2018. Contrasting with the success of the rest of the Airbus line, Airbus has delivered only 193 A380s, with 126 orders left to fill, though some of them are unlikely materialise.
WATCH: United Airline's boss explains its Boeing links:
Boeing -- which will mark a century of making planes in Seattle tomorrow -- says it is in as good a shape as any time in its history.
Chairman and chief executive Dennis Muilenburg told journalists at Farnborough that it was "playing offence not defence."
Both Boeing and Airbus face growing competition from smaller manufacturers -- Canada's Bombardier and Brazil's Embraer. China has also started making its own single-aisle jet.
During the past week at Farnborough, Boeing has been going head to head with its European rival for sales.
Over the week, Asian airlines provided a big boost for both Airbus and Boeing, as carriers from China to India stocked up on revamped versions of the manufacturers' single-aisle jets.
Xiamen Airlines kicked off the airshow action with an outline deal for 30 high-density Boeing 737 Max 200s worth US$3.39 billion at list prices, while Donghai Airlines followed up by saying it will buy 25 Max 8s valued at US$2.75b. Standard Chartered's leasing arm also ordered 10 current-generation 737-800s worth US$960 million, which will be deployed in northeast Asia.
Malaysian budget carrier AirAsia signed to buy 100 Airbus A321neos valued at US$12.6 billion. Go Airlines India is examining the purchase of 70 smaller A320neos worth about US$7.5 billion, according to people familiar with their plans.
When you have greater discretionary spending, it's been proven that you buy airline tickets with it.
Asian carriers made the running in Farnborough as economic growth spurs demand for new routes and extra frequencies. The trend is prompting low-cost operators which have already amassed large order backlogs to add even more planes, with India's SpiceJet also weighing up an order for as many as 100 737s or A320s.
John Leahy, Airbus's chief operating officer, customers, said at Farnborough that a growing middle class in China, India and other emerging economies such as Indonesia will become increasingly central in driving demand for jetliners.
"When you have greater discretionary spending, it's been proven that you buy airline tickets with it," Leahy said. By the year 2035, he said, 75 per cent of people in what are now viewed as emerging nations will be taking at least one flight a year.
"That's an awful lot of demand for seats in an awful lot of planes."
As well as initial plane sales, Airbus' Global Services Forecast forecast predicts that over the next 20 years, total industry spending on aftermarket services will reach US$3 trillion. Of this total, the cumulative value of Maintenance, Repair & Overhaul activity will exceed US$1.8 trillion by the year 2035.
A Boeing Co. 737 max aircraft performs a flying display on the second day of the Farnborough International Airshow. Photo / Simon Dawson
The International Air Transport Association says airline cashflow is stronger in the first quarter of this year than in the same period last year.
They have taken a hit on the stockmarkets, though. Across the world, airline share prices are now 21 per cent below their level at the start of the year, with the Brexit vote wiping out nearly a quarter of European carriers' values in last month, the biggest monthly fall since 2001.
Keeping score:
• At this week's Farnborough Airshow, Airbus Group and Boeing announced orders and commitments for jets worth US$50 billion at list prices.
• Airbus: 285 aircraft worth US$35b
• Boeing: 127 aircraft worth US$15.4b
• Of the 127 aircraft sold by Boeing, 116 will go to Chinese customers, while Airbus relied on discount carriers from southern Asia for the bulk of its deals.
The planes behind NZ s great aviation mystery
New Zealand played an early role in Boeing's takeoff to become the world's biggest aerospace company.
Boeing's first overseas sale was to to a New Zealand flying school, and the two floatplanes concerned went on to become the focus of one of this country's most enduring aviation and military mysteries.
Today Boeing celebrates its 100th "Founders Day" and company historian Mike Lombardi says that early business relationship with New Zealand was "incredibly important" in establishing the company as a global business.
"With the sale of the airplanes to New Zealand it opened up the whole idea of what we really are today at Boeing -- being a global company with customers around the world," he says.
From small beginings making planes in an old boatyard in Seattle, the company grew to become the leading builder of commercial aircraft, warplanes and spacecraft, with sales of $130 billion a year (over half New Zealand's GDP). By market capitalisation it is one of the world's top 100 companies.
With the sale of the airplanes to New Zealand it opened up the whole idea of what we really are today at Boeing -- being a global company with customers around the world.
When the B&W float planes were built, just 13 years after the Wright brothers first flew, powered flight was still a curiosity.
Most planes were built in garages from drawings in magazines, then taken around the country by "barnstomers" to amaze huge crowds during flying displays.
Lombardi says the B&W planes -- named for the surnames of company founder Bill Boeing and his then business partner Conrad Westervelt -- were the result of of extensive research and design planning, unusual for the time.
"They felt they could build a better aeroplane. That's one of the reasons why Bill Boeing started the business -- he felt there was a new business opportunity with this new technology."
Lombardi says it is uncertain who initiated the contact between Boeing and the New Zealand Flying School (which went on to be owned by the New Zealand Government) but the planemaker was looking to offload the aircraft after failing to sell them to the US Navy.
Boeing's Model 1 float plane, also known as B&W seaplane.
In 1918 the two aircraft -- nicknamed "Bluebill," and "Mallard" -- were sold for US$3000 (the equivalent of US$68,000 today) and US$1500 was paid for the engine. Today Boeing's latest airliner, the 787 Dreamliner, has a list price of up to $250 million, though sells for much less depending on deals with airlines.
In Auckland, pioneer aviator George Bolt first flew the Bluebill for the flying school.
Aviation historian and author Edgar Francis Harvie wrote that Bluebill also became the first mail plane in New Zealand. For some mail deliveries, Bolt dropped the mailbags overboard, aiming for a sheet spread on the ground by Post Office staff.
Mystery surrounds the planes' fate. The New Zealand Government took over the flying school fleet and apparently burned the planes in 1926. Rumour had it that the planes somehow escaped destruction and their remains were sealed in a cave under Auckland's North Head as part of a vast underground military installation, a story that is periodically reignited .
Lombardi can't shed any more light on the mystery.
During trips across the Tasman, I see first-hand the legacy we've built with Air New Zealand and the New Zealand Defence Force.
"I haven't seen anything," he says. "They did a lot of investigation in the 1960s around our 50th anniversary and there was a pretty extensive search done for what they could find and they came up empty-handed."
In response, Boeing built a replica for the 1966 golden anniversary and it is now in Seattle's Museum of Flight.
The Royal New Zealand Air Force has Boeing 757 planes and Air New Zealand has been a big customer, starting with the Boeing 737s first delivered in 1968 and including nine 747 jumbos. The airline was the launch customer of the 787-9 Dreamliner.
Maureen Dougherty, president of Boeing Australia, New Zealand and South Pacific says the initial B&W aircraft began what has become a "special and enduring relationship" between Boeing and New Zealand.
"During trips across the Tasman, I see first-hand the legacy we've built both with Air New Zealand and the New Zealand Defence Force."
An Air New Zealand Boeing 747 takes off from Auckland International Airport. Photo / Paul Estcourt
The Boeing story
William Edward Boeing was born in Detroit, went to Yale and make a fortune in the timber industry in the Pacific Northwest before catching the flying bug when he saw an airshow at the age of 28.
1916: Boeing founds Pacific Aero Products Co., renamed the Boeing Airplane Company the next year.
1918: Boeing exports two of B&W floatplanes to New Zealand.
1920s: After WWI, sales plunge and the company lays of a third of its staff. To survive, it returns to making furniture, speedboats and planes.
Boeing buys several mail carriers in the booming airmail service and forms United Air Lines.
1930: Carries people, as well as mail, and hires nurses to fly with passengers to comfort nervous passengers.
1934: US Government forces Boeing to shed United Air Lines, leading a bitter Bill Boeing to sell his stock and quit the company.
1940s: During WWII, women are called to work at Seattle plant and in two years production is boosted from 60 planes a month to 362 a month. The B-17 Flying Fortress plays a key role in the US bombing campaign against Germany. The B-29 Superfortress carries atomic bombs to Hiroshima and Nagasaki. Jet engine technology from Germany paves way for future ailiners.
1958: The 707 enters service, the world's first successful jetliner.
1967: Development of the 747 starts. The "Queen of the Skies" enters service in 1970, opening the way for mass travel.
1968: The 737 enters service with airlines including Air New Zealand. Sales are slow at first but it eventually becomes a best-seller, the workhorse of the industry for short-haul routes.
1980s: Boeing concurrently develops the 757 and the 767 jets, later sold to Air NZ.
1990s: Parts of the B-2 stealth bomber are built in Seattle and its composite technology is used in the fuselage of the 787 Dreamliner.
About a third of Boeing's revenue comes from non-commercial aircraft.
1997: Boeing buys struggling McDonnell Douglas.
2002: Abandons the Sonic Cruiser programme in favour of the more fuel efficient 787, a plane plagued by design problems and assembly delays. Soon after entering service in 2011 it has problems with its lithium-ion batteries and the global fleet is grounded two years later.
2013: Decision made to build the 777X at Everett, near Seattle.
