Skift Take
Boeing’s obstacles produce an uncompetitive environment offered the current state of the aircraft-manufacturing duopoly. And Boeing’s concerns seems formidable.
Dennis Schaal
Boeing needs to get its house in order.
That was the message from Steven Udvar-Házy, executive chairman of Air Lease Corp., who said his company has lost some $500 million in income because of the grounding of the Boeing 737 Max and delivery hold-ups for 787s.
Udvar-Házy spoke to Airline company Weekly Editor Madhu Unnikrishnan at the Skift Air Travel Online Forum Wednesday on the subject, “Futureproofing the Industry for the Years Ahead.”
He called Boeing’s production troubles “aggravating.”
It creates a dilemma for Air Lease Corp.’s customers because they can’t just turn the switch and refleet with the A350 as an option, he stated. A greater shift toward the A350 might need preparations of a minimum of 18-24 months, he added.
Udvar-Házy said Boeing requires to resume deliveries of 787s, and it would be nice to see at least three to 4 each month. That would be significant development, he said.
“it’s been extremely discouraging for Boeing management and for us,” Udvar-Házy stated.
In addition to the shipment hold-ups, Boeing’s difficulty is to establish a new airplane that’s better than the A321, he said. If it does not, then the A321 would even more permeate the marketplace, making Boeing inroads even more hard to achieve.
But developing a brand-new airplane would take a $15 billion to $20 billion commitment from Boeing for a plane that would still have to be functional 30 years from now. But there will be a lot of unknowns and obstacles in that time span about carbon fuels, alternative technologies and noise concerns to make advancement of such an airplane a powerful job.
But can Boeing develop such an airplane that’s better than the A321?
“It’s a real $15 to $20 billion concern and no one has the response,” Udvar-Házy said.
The longer Boeing waits, the more the A321 will permeate markets and airline companies, making a transition to other airplane more difficult, he stated.
Talking about the future of the Airbus-Boeing duopoly, Udvar-Házy said he thinks inroads will be made by manufacturers in Russia and China, however mainly in their own domestic markets in the meantime.
He stated possibly a brand-new entrant can emerge out of Silicon Valley, for instance.