The Middle East's love affair with the Boeing 777
, April 26th, 2012
When the biggest names from Emirates Airline, including His Highness Sheikh Ahmed bin Saeed Al-Maktoum and Tim Clark, travel across the world for a celebration with Boeing Commercial Airplanes CEO Jim Albaugh and more than 5000 other distinguished guests, you know a special occasion is being commemorated. Such was the case at Boeing’s flagship manufacturing plant in Everett last month, where the airframer unveiled the 1000th model from its best-selling 777 family. Of course, the fact that Emirates Airline received the landmark aircraft was a happy coincidence, as the Dubai-based powerhouse is currently the 777 programme’s largest customer, with 102 of the aircraft in its fleet and another 93 on order, the vast majority of which are passenger models. In celebration of the 1000th 777, Aviation Business speaks to Marty Bentrott, Boeing’s senior vice president of sales in the Middle East, about the past, present and future of the historical aircraft.
Boeing delivered its 1000th 777 aircraft to Emirates Airline last month. What was the significance of this milestone?
This landmark had multiple significance for Boeing, as well as Emirates Airline. Firstly, the 777 programme has managed to reach the 1000th production mark faster than any other product in Boeing’s history from a wide-body standpoint, which is attributable to each and every 777 customer around the world. In fact, we displayed all their logos at the unveiling of our 1000th 777 last month. Secondly, we are extremely proud that the 1000th 777 was delivered to Emirates, which is our largest 777 customer and ironically, they commenced a non-stop service between Dubai and our home town Seattle in the same week as the handover.
What is the history of the Boeing 777?
Our original 777-200ER was introduced into the marketplace in 1995, followed by the 777-300. Today, the model of choice is the 777-300ER, because the increased capacity and range of the airplane has became a real economic benefit to airlines. I think the first 777-300ER probably entered the Middle East marketplace around 2004-2005 and it’s been a tremendous success story ever since. Once again, the 777-300ER has been dominant in this region too, although there has been selective ordering for the 777-200LR to service destinations that are even further out in terms of distance. If you look at the airline customers in the Middle East that are focused on long-haul as part of their core business, such as Emirates, Qatar Airways and Etihad, the 777 is really a mainstay of their fleets and they continue to order the aircraft, as we saw at the Dubai Airshow last year. In terms of capacity, we have continued to improve the aircraft ever since it entered service, so with each incremental improvement, whether its aerodynamics or engine performance, we’ve been able to further push the capability of the airplane out. This has supported, for example, the ability of Emirates to service destinations in the US West Coast, which if you go back four or five years, would have been focused on the 777-200LR airplane, but now its possible with the 7777-300ER.
How important are Middle East carriers to this particular type of airplane?
They are extremely important. I did some analysis here recently and Middle East customers account for a third of our backlog for the 777 programme, so obviously they have made it a product of choice. I am very confident that they are able to be successful with it, in terms of passenger loads against the ticket prices they are selling. Certainly everyone is concerned about fuel prices at the moment and that puts additional pressure on airline operations, but the efficiency of the 777 versus perhaps some of the other products in the market will provide carriers with some additional flexibility to continue to make money.
Is there much competition in the market for the Boeing 777 from competitors such as Airbus?
Today, I would say no, because as Airbus ended the production of their A340, which really wasn’t selling in the marketplace, there is no near-term product that can deliver to our customers and provide them with the same capability. Airbus from a product strategy standpoint seems to be characterising the A350-1000 as a competitor to today’s 777-300ER, although I personally think there is a lot of debate about that.
Which are the biggest Middle East customers for the Boeing 777?
Emirates is clearly the leader, Qatar Airways behind them, and then Etihad Airways would be third in terms of airplanes in their fleet and airplanes in backlog. In addition, Saudi Arabian Airlines has recently committed to the 777-300ER after being a big customer of the 777-200ER, and Egyptair took their first 777-300ER around a year and a half ago, so it continues to be the product of choice for the region’s large airlines.
What does the future hold for the 777 in terms of Middle East orders?
I think there is going to be some orders in the next year or two. You may not see those orders in large quantities, as airlines will be adjusting their capability intake relative to potential delays in, say, the Airbus A350 programme. I think there’s a lot of uncertainty around the A350-1000, which may trigger some additional demand for today’s 777-300ER. So, I think the market will be okay with small quantity of incremental orders from our Middle East airline customers. I also think some of them will phase out their A340s, and the natural replacement for those airplanes will be the 777 and as we discussed, there is really not a competitive product available in that size and capabilities.
Will those orders come from existing customers in the Middle East?
I think we touched on the carriers in the Middle East that have already committed to the 777 as part of their fleet and when you look around, aside from perhaps Kuwait Airways, I’m not sure there’s large incremental business from the other carriers. As the Iraqis start to develop their infrastructure and develop their airline, I think potentially the 777 could play a role in terms of their fleet development.
There’s been a lot of talk about the enhanced version of the 777, where does that stand at the moment?
We are talking to our customers about a newer 777, out towards the end of the decade. As with any of our products, its important we get feedback from our customers before we get too far down the path of designing what this airplane might be. So, consistent with our product development activity and at least where we think the airplane is going to go, we’ve been sitting down with customers in the region, who are important to the programme, to get their insights and inputs relative to potentially a replacement for today’s 777.
Do you have any timeframe in mind?
We haven’t really been definite in terms of timelines. I would say that airlines - when they think of their operations and fleet replacement cycles, whether that be the A340, A330 or the 777 - would expect something to be operational in this decade.
What feedback are you receiving from airlines in terms of the replacement?
There is strong demand for an engine that is capable of delivering considerable benefits from a fuel burn standpoint. In addition, there are expectations that aerodynamic changes will be introduced to provide even greater efficiency. I would say that our customers are probably looking for something in the order of 10-20 percent greater efficiency on a per seat basis from a new product. I also think they would be expecting us to look at some of the features and capabilities of the 787 and how that could be migrated to a future 777, so those that have committed to the 787 have the benefit of common type rating for their flight crews. Finally, I think customers also expect us to deliver a product that delivers the performance reliability of today’s 777 from day one. As the 777-3000ER entered service, it was over 99% dispatch reliable from day one, versus when we first brought the 777 into the marketplace in 1995, it wasn’t nearly at those levels. So airlines expect 99+% on delivery of the first airplane. They are looking for, as airlines always are, additional payload, additional seats, and additional range capabilities. When you look at how 777s are operated today, there are only a few of the super ultra-long range missions, and the core of the 777 probably operate on 6500-7500nm, so you are really not out on the edge. But certainly airlines here, as in Emirates, want to carry more passengers and more payload including cargo to destinations they are serving, such as the US West Coast or down in South America.