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Ethiopian firms up its A350 order, what does it mean for Boeing?

In firming up its Memorandum of Understanding (MoU) for 12 A350-900 XWBs, Ethiopian Airlines, which has operated an all-Boeing fleet until this order, becomes a new Airbus customer. Some people may lament that this is a significant blow to Boeing and is a result of Boeing’s reluctance to launch a 777 successor (“Boeing, airlines on potential 777 successor (Part 1)“, 26th May 09); and Boeing should launch a 777 successor immediately (“Boeing, airlines on potential 777 successor (Part 2)“, 1st Jun 09).

On the contrary, Boeing should focus on executing its troubled 787 Dreamliner and 747-8 programs, and launch a 777 successor later.

Launching a 777 successor without the release of engineering sources from the 787 and 747-8 programs is irrational and futile and will only further complicate the matters up on these already troubled programs, frankly to say.

The Entry Into Service (EIS) of 747-8F was delayed to the 4th quarter of 2010 (“Boeing faces yet another setback with US$1 bln 747-8 program charge“, 6th Oct 09), partly because there is inadequate flight testing resource to accommodate two simultaneous first flights.

Now with any potential new 787 and 747-8 orders as well as potential order cancellations such as the threat coming from Oman Air all depend on the success of ZA001′s first flight, diverting engineering resource for launching any new programs at this stage would be premature.

Moreover, with both the new 787-9 EIS and the 787 production ramp-up scheduled to take place in late-2013 (“Boeing to fly ZA001 in 4th quarter this year“, 27th Aug 09) alongside the construction and implementation of the 2nd 787 FAL in Charleston, South Carolina (“Boeing picked South Carolina to house its 2nd 787 FAL“, 29th Oct 09), Boeing is essentially preoccupied.

Nevertheless, Boeing has made it very clear that it will make a decision on the potential 777 successor.

“Frankly, we’re looking very closely at what Airbus is doing on the A350. Once that airplane is defined (and we think they’ve got many challenges ahead) – we can choose our strategy from there,” Boeing Commercial Airplanes Vice President (VP) Marketing Randy Tinseth said in today’s Wall Street Journal interview.

“Maybe we don’t have to do anything with the 777. It may mean we have to make minor or major improvements on the airplane or it may be we have to replace the airplane at some point which we will,” he added.

Regarding the 787′s perennial delays, he offers this candor and true assessment:

“We’ve disappointed our customers. We’ve modified our first flight test aircraft and in the next few days I would expect to see the next 2 airplanes complete their modifications to start their static testing. We continue to be on track to fly the aircraft before the end of the year.

Gaining back our credibility with our customers is not something we can do overnight,” he admitted.

On the other hand, after a speech from Boeing lately, Alex Pietsch, Renton’s administrator for the Department of Community and Economic Development, believed that a 737 replacement “could come on line sooner”, according to a report.

By then, more knowledge on the performance of the A350 XWB as well as Airbus’ strategy on an A320 replacement following today’s announcement to launch a sharklet winglet that will see the A320′s fuel burning being reduced by “at least 3.5%” will be known.

That would be a good timing for Boeing to make respective decisions on the potential 777 and 737 replacements.

Until then, achieving the 1st flight of ZA001, completing the flight test programs of both the 787 and 747-8 and have them delivered are the key before Boeing can move on.

Hand over to you, Boeing.

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