6 ms·

Aircraft sales is a really weird industry. It's gone the way of the AAA video game in the sense that its so expensive to build one now that there are only a sel

Aircraft sales is a really weird industry. It's gone the way of the AAA video game in the sense that its so expensive to build one now that there are only a select few companies that can do so. And going forward companies will go for iteration rather than new designs as each new design is almost a literal bet the company proposition. Just look at the 32 billion the article asserts that Boeing has already spent on the dream liner!! There was a great article that gets posted here every now and then called something like why can't we fly any faster and it turns out the answer is that consumer's don't want to pay for it. I think something similar is happening with air craft design in the sense that we're seeing less improvement because no one, in terms of passengers, wants to pay for the cost involved to really inovate. As to a comment about space travel/tourism eating Boeing's lunch, I think that's a pretty uniformed comment. How many private company has more space flight knowledge, patents, or design experience than Boeing? There aren't many and I don't think there will be that many due to the costs involved. I mean Boeing has spent 32 Billion on the dream liner, what is Space X's valuation? If I had to guess, the future of air craft design is increased partnership, not more companies.

navls 11y ago
So you're saying the next big thing is indie aircraft?
- dogma1138 11y ago
  That literally will not fly, at least not in the commercial space.
  - dredmorbius 11y ago
    Perhaps not in commercial space, but given liability structures in private and small aircraft, the situation for quite some decades has been that innovative design has largely emerged in kit aircraft. I recall discussion of this when John Denver died in the crash of his experimental airplane in 1997.
    - dogma1138 11y ago
      You still need to pass quite a bit of regulation for private aircraft because you know if they fall they can kill more than just their pilot. Kit aircraft can only be licensed as "experimental" under FAA rules AFAIK which quite limits the potential customer base which is quite small to begin with.
      - dredmorbius 11y ago
        Understood. Point being that manufacturer liability means that there's been exceptionally little innovation in basic private aircraft (e.g., Cessna, Piper) for decades. Your basic designs date from the 1950s/1960s. Private jets, somewhat less so, but still pretty conservative.
        dogma1138 11y ago
        There's also very little profits in the market, most aerospace companies that sold aircraft to individuals have died, all business jet makers have also died. Learjet wen't bankrupt, it's now owned by Bombardier, Gulfstream is owned by General Dynamics and even before that it had to shed much of it's design and manufacturing capabilities and had to license the designs for their most popular jets like the G100 and 200 series from Israel Aerospace Industries.
        dredmorbius 11y ago
        Thanks for the additional info. I didn't realise the business jet space had consolidated. Most of what I know about Lear is Chrystal Shanda.
arnold_palmur 11y ago
How many private company has more space flight knowledge, patents, or design experience than Boeing? Agreed, do people not realize how involved Boeing is with the commercial space landscape?
dogma1138 11y ago
There can be quite a large amount of innovation even in iterating on existing designs. Boeing is using new materials, and the new high-bypass engines for the 787 and 747-8 are quite a technological achievement. People also forget that Boeing like many other aerospace companies rely on government funding and military contracts. Many of Boeing's commercial aircraft either started as military designs for long range bombers and cargo aircraft or were a sister project of one. Airbus was pretty much a hail mary effort by Europe to revive their aerospace industry, the UK, France, Italy and Germany have dumped billions of tax payer money to get Airbus off the ground. Airbus got preferential treatment in the EU market, and even it relies quite heavily on it's military wing for a large part of their profits. As far as individual programs go the 787 like the 777 doesn't have military variants at this point, the "newest" Boeing aircraft with military versions is the 767 (there are plenty of 737 tankers and CIC/AW aircraft out there, and even 707's) and it does't look like they will ever receive one. But it's also very hard to estimate the worth of a program, the 787 might not break even in the books, but the technology, experience, patents and intellectual property that came out of that program may very well be highly profitable.
- blisterpeanuts 11y ago
  +1 for pointing out that Boeing has significant revenue from military contracts. The Seattle Times analysis seems not to take that into account, but rather focuses on purely commercial aspects. New passenger planes are extraordinarily expensive to develop, and only 2-3 corporations in the entire world are capable of it. Boeing traditionally has introduced new models with advantageous features, then continued selling them for decades, gradually rolling out slightly modernized versions that the airlines can purchase to refresh their fleets without completely retooling to support a newer model (retraining mechanics, purchasing new parts, etc.). The article argues that Boeing will take ~5 years to break even. That actually sounds pretty good. I would give them 10-15 years. The fact that only one Boeing person seems to have been consulted for this article suggests that it's mostly speculation by outsiders and former insiders, and not a realistic analysis based on comprehensive data. If Boeing's betting on military contracts to keep it afloat while the more profitable 787-9 and -10 models come online, so what? Sounds like a reasonable thing for this kind of manufacturer.
caf 11y ago
To avoid the "bet the company" issue, maybe the future of new aircraft designs will be to create a company specifically to design and build one new aircraft. That company will have a management and marketing agreement with the aircraft company that created it, and will issue equity and debt to finance the design and build. Most of its staff will be on secondment from the "parent" company, and it collects royalties on the eventual aircraft sales/leases.
- rdancer 11y ago
  You pretty much have to give equity for that kind of risk, because the interest on bonds you could sell would not be commensurate with the projected cashflow. But "betting the company" doesn't mean in this case that the company would disappear. It would just go bankrupt. That is a scary word, but in a case of Boeing, (some) equity would just be transferred from shareholders to creditors; operations would not be affected.
drzaiusapelord 11y ago
>we're seeing less improvement because no one, in terms of passengers, wants to pay for the cost involved to really inovate. We tried this with the Concorde. The pricing was terrible and it was a turkey in the sky that even rich people didn't care enough to use frequently. Saving x amount of time for y dollars didn't work. As a side note, I saw a Concorde at the Air and Space museum recently. Its huge. About the length of a 787 and with less than half the seating capacity. From a cost perspective, there's no way something like would ever be financially sound. How many people are in such a hurry and willing to pay such a premium? Just because speed has reached a status quo of speed vs fuel, doesn't mean you can't innovate in other ways. The interior and driving experience of a 2015 Honda Civic is far, far better than the 1979 Civic. Yet they both do the same 65 mph on the expressway and both are cheap. Blaming consumers is short-sighted and unfair here. The industry competes largely on fuel efficiency anyway. The 787 is 20% more efficient than the 767, for example. Nicer entertainment systems and creature comforts are an added bonus.

navls 11y ago

So you're saying the next big thing is indie aircraft?

dogma1138 11y ago
That literally will not fly, at least not in the commercial space.
- dredmorbius 11y ago
  Perhaps not in commercial space, but given liability structures in private and small aircraft, the situation for quite some decades has been that innovative design has largely emerged in kit aircraft. I recall discussion of this when John Denver died in the crash of his experimental airplane in 1997.
  - dogma1138 11y ago
    You still need to pass quite a bit of regulation for private aircraft because you know if they fall they can kill more than just their pilot. Kit aircraft can only be licensed as "experimental" under FAA rules AFAIK which quite limits the potential customer base which is quite small to begin with.
    - dredmorbius 11y ago
      Understood. Point being that manufacturer liability means that there's been exceptionally little innovation in basic private aircraft (e.g., Cessna, Piper) for decades. Your basic designs date from the 1950s/1960s. Private jets, somewhat less so, but still pretty conservative.
      - dogma1138 11y ago
        There's also very little profits in the market, most aerospace companies that sold aircraft to individuals have died, all business jet makers have also died. Learjet wen't bankrupt, it's now owned by Bombardier, Gulfstream is owned by General Dynamics and even before that it had to shed much of it's design and manufacturing capabilities and had to license the designs for their most popular jets like the G100 and 200 series from Israel Aerospace Industries.
        dredmorbius 11y ago
        Thanks for the additional info. I didn't realise the business jet space had consolidated. Most of what I know about Lear is Chrystal Shanda.

arnold_palmur 11y ago

How many private company has more space flight knowledge, patents, or design experience than Boeing? Agreed, do people not realize how involved Boeing is with the commercial space landscape?

dogma1138 11y ago

There can be quite a large amount of innovation even in iterating on existing designs. Boeing is using new materials, and the new high-bypass engines for the 787 and 747-8 are quite a technological achievement. People also forget that Boeing like many other aerospace companies rely on government funding and military contracts. Many of Boeing's commercial aircraft either started as military designs for long range bombers and cargo aircraft or were a sister project of one. Airbus was pretty much a hail mary effort by Europe to revive their aerospace industry, the UK, France, Italy and Germany have dumped billions of tax payer money to get Airbus off the ground. Airbus got preferential treatment in the EU market, and even it relies quite heavily on it's military wing for a large part of their profits. As far as individual programs go the 787 like the 777 doesn't have military variants at this point, the "newest" Boeing aircraft with military versions is the 767 (there are plenty of 737 tankers and CIC/AW aircraft out there, and even 707's) and it does't look like they will ever receive one. But it's also very hard to estimate the worth of a program, the 787 might not break even in the books, but the technology, experience, patents and intellectual property that came out of that program may very well be highly profitable.

blisterpeanuts 11y ago
+1 for pointing out that Boeing has significant revenue from military contracts. The Seattle Times analysis seems not to take that into account, but rather focuses on purely commercial aspects. New passenger planes are extraordinarily expensive to develop, and only 2-3 corporations in the entire world are capable of it. Boeing traditionally has introduced new models with advantageous features, then continued selling them for decades, gradually rolling out slightly modernized versions that the airlines can purchase to refresh their fleets without completely retooling to support a newer model (retraining mechanics, purchasing new parts, etc.). The article argues that Boeing will take ~5 years to break even. That actually sounds pretty good. I would give them 10-15 years. The fact that only one Boeing person seems to have been consulted for this article suggests that it's mostly speculation by outsiders and former insiders, and not a realistic analysis based on comprehensive data. If Boeing's betting on military contracts to keep it afloat while the more profitable 787-9 and -10 models come online, so what? Sounds like a reasonable thing for this kind of manufacturer.

caf 11y ago

To avoid the "bet the company" issue, maybe the future of new aircraft designs will be to create a company specifically to design and build one new aircraft. That company will have a management and marketing agreement with the aircraft company that created it, and will issue equity and debt to finance the design and build. Most of its staff will be on secondment from the "parent" company, and it collects royalties on the eventual aircraft sales/leases.

rdancer 11y ago
You pretty much have to give equity for that kind of risk, because the interest on bonds you could sell would not be commensurate with the projected cashflow. But "betting the company" doesn't mean in this case that the company would disappear. It would just go bankrupt. That is a scary word, but in a case of Boeing, (some) equity would just be transferred from shareholders to creditors; operations would not be affected.

drzaiusapelord 11y ago

>we're seeing less improvement because no one, in terms of passengers, wants to pay for the cost involved to really inovate. We tried this with the Concorde. The pricing was terrible and it was a turkey in the sky that even rich people didn't care enough to use frequently. Saving x amount of time for y dollars didn't work. As a side note, I saw a Concorde at the Air and Space museum recently. Its huge. About the length of a 787 and with less than half the seating capacity. From a cost perspective, there's no way something like would ever be financially sound. How many people are in such a hurry and willing to pay such a premium? Just because speed has reached a status quo of speed vs fuel, doesn't mean you can't innovate in other ways. The interior and driving experience of a 2015 Honda Civic is far, far better than the 1979 Civic. Yet they both do the same 65 mph on the expressway and both are cheap. Blaming consumers is short-sighted and unfair here. The industry competes largely on fuel efficiency anyway. The 787 is 20% more efficient than the 767, for example. Nicer entertainment systems and creature comforts are an added bonus.