Here is a pointless question that came to me.
Boeing is a very old, very large, and right now very challenged company.
Exactly the kind of company that competition and new blood/ideas replace.
Just what happened to Sears several years ago. And even if IBM or General Motors haven’t been replaced they have pretty much been lapped by other companies.People do get fired for choosing IBM now and what’s good for GM isn’t always good for the US. With all their troubles, perhaps Boeing is on the same downward path. Their troubles are well-known. The future is not.
Will a new SpaceX type of company rise up and take away Boeing (and Airbus) dominance in the airplane market? Clearly no one can go head to head with Boeing, but like IBM it may be that the market will simply shift out from under them and a nimbler company will make the next generation air transport vehicles-whatever they might be. After all, given the collapse of air travel and the resulting glut of older A/C, and the collapse of oil prices to take the economics out of “more efficient” aircraft, any airline could outfit themselves quite well without buying any new A/C from Boeing/Airbus. Perhaps a new company will devise new modes of transport-say lots and lots of cheap smaller A/C with little or no on-board crew. Or something I can’t think of that meets future needs better than 200 million dollar aluminum tubes.
Nature abhors a vacuum. That includes the business world, artificial though it may be.
But * in these uncertain times * people are re-thinking the importance of air travel. Online meetings and other digital alternatives are rising… and rightly so. Nobody wants to ship themselves overseas, fuck up their circadian rhythms, say “goodbye” to their loved ones - knowing there’s a tiny chance that’s a permanent farewell - and subject themselves to foreign cultures/food/customs when they can just flip on the webcam.
Also wanted to point out to the O.P. that for the vast majority of Americans, the abbrev. “A/C” refers to air conditioning. Very, very few people parse that as “aircraft” which is what I * think* you meant.
Commercial passenger airliners are enormously complex things. I don’t see viable alternatives to Boeing or Airbus arriving any time soon. But if there were to be one, it might be Embraer, Bombardier (both existing manufacturers of smaller planes) or something from China, who would absolutely like to dominate the business.
Manufacturing is capital intensive, and aircraft manufacturing particularly so. It isn’t clear anyone is going to need new builds of commercial aircraft anytime soon and the airline business itself may change radically but commercial air travel is fundamentally a technologically conservative business for obvious liability reasons. All of that being said, if there is an industry rife for change and innovation, aircraft design and manufacturing is high on the list. There are some credible reasons why the configuration of commercial aircraft are basically unchanged since the early jetliner era but there are definitely some advances that could improve the efficiency and comfort albeit don’t offer sufficient cost savings to justify some of the radical changes in infrastructure in the current transit system.
All that said, I don’t think Boeing is completely going away. It may contract pretty radically, but it still has facilities to construct aircraft that no one else has and would take billions of dollars for an upstart to develop. The comparison to SpaceX is superficially apt but rockets are actually a lot less complex to build than modern aircraft even though they experience loads and environments that are far beyond what commercial aircraft will ever see.
Understood. I was discussing air conditioning with my neighbor this afternoon-socially distanced of course.
But I figured in this crowd context would make it clear that A/C = AirCraft.
But your point is well taken. One should define the first use of any acronyms.
I really doubt Boeing will ever go away completely-defense work alone will keep it going for decades. And don’t forget spare parts.
But Boeing has a monopoly in the US. Lock-Mart doesn’t compete with them in commercial aviation. Without Airbus they would be a worldwide monopoly. I don’t think that is a stable situation.
Come up with millions in start-up capital and demonstrate a viable idea and the billions will follow. Especially in today’s world where trillions of $s are sitting around with nothing to do. I understand the regulatory hurtles, but it is after all just paperwork. If the FAA/Justice/US Gov’t wanted to, they could lower that barrier quite a bit. And my supposition is that the unspecified idea succeeds in part by growing a business where the paperwork is relatively small.
There are also some up-and-comers out of the former Soviet Union such as Sukhoi and Antonov.
At the moment, Embraer, Bombardier, Sukhoi, and Antonov are only making narrow body “regional jets” that typically hold around 80-100 people in a 2 and 2 across seating configuration. There’s just no real competition for Boeing or Airbus in anything much larger than 100 passengers.
I do find it a bit ironic that Antonov’s passenger jets are small, while their An-225 is the world’s largest cargo plane. They don’t seem to have a happy medium.
I don’t see Boeing going anywhere. Prior to this virus SNAFU, Boeing were well on their way to buying Embraer and Airbus owned Bombardier’s regional jet business. The only way I can see Boeing going away is if it gets split up into smaller businesses, but then it would make most sense to keep the Boeing name attached to the commercial jet business rather than the other bits.
A Chinese company makes the C919, seating 156-168 passengers and aimed at the same market as the Boeing 737 MAX and Airbus A320neo. That may seem a small plane, but they are the biggest sellers for Boeing and Airbus.
There are not “trillions of $s…sitting around with nothing to do” and the “just paperwork” as you term it is hundreds of millions of dollars of effort of compliance and testing that exist specifically to ensure public safety and indemnify manufacturer accountability (hence the scandal in how the FAA handled 737MAX certification) in addition to billions of dollars of investing in facilities, tooling, trained personnel, creating a supplier infrastructure, and the non-recurring engineering cost of designing the flight vehicle which itself can run upwards of a billion dollars.
While Embraer and Bombardier can make commuter-sized planes that are credible contenders in the regional markets, making a wide-body sized plane is a roll of the dice that hasn’t actually worked out well financially for anyone since the Airbus A340 and the Boeing 747. The large narrowbody market that has been dominated by the A320-class and 737 aircraft is certainly open to competition but its a risky endeavor even for as badly as both Boeing and Airbus have done. It is a tough industry to be in because a single design flaw can result in a loss of confidence, and unlike the automotive industry a failure doesn’t just result in some broken cars on the size of the road but often one or more crashes of potentially hundreds of passengers.
There are technical innovations, such as lifting body fuselages and ultrahigh bypass turbofan engines, that could significantly increase efficiency and performance, but they also come with having to challenge existing regulatory rules and having to convince airlines to invest in a totally new-type vehicle in addition to the infrastructure challenges of having to support and service completely new configurations. The airline industry, as noted previously, is actually highly conservative from an innovation standpoint even as they are speculative on the finance side, and the current challenges are just going to drive them to greater reluctance to innovate unless there is a clear and immediate gain to be had.
The Bombardier CSeries adventure shows how difficult it is for a smaller company to challenge the Big Two. The development and qualification costs almost bankrupt the company, before delivery of the first plane; the governments found clever ways to keep the company afloat. I’m not qualified to determine how much of the cost/time overruns was due to random technological risk (like the bursting engine) and how much was incompetence/mismanagement. But eventually Bombardier started selling the CS planes… and Boeing blocked a large sale to Delta by complaining of dumping with the FTC. Bombardier was eventually cleared of that, but it was clear that this kind of hurdle would occur repeatedly. Bombardier had to find a partner to share the burden. In 2017, Airbus stepped in and the CSeries planes became known as the Airbus A220.
And now Bombardier has pretty much exited the commercial aircraft business. They recently sold their remaining share in the A220 to Airbus, they sold their CRJ line to Mitsubishi, and their Q-Series turboprop line to Viking Aircraft. Now Bombardier only makes business jets.
search for the velocity of M2 at the St. Louis Fed. And the larger M2 is, the more important velocity is.
The velocity of money is at historic lows. And given how much money is out there right now, I think trillions isn’t too big a word. A lower velocity means by definition that the money is sitting in bank accounts longer. Loan balances over the couple of months are so distorted that it is impossible to judge. Before the virus hit, they seemed generally stagnant to me.
There are numerous articles out there right now presenting interviews with investment managers sitting on hundreds of millions to billions waiting for an opportunity.
As I said before, I don’t think anyone will go head to head with the big 2 to build another giant metal tube, but I think history shows us that someone will come up with a new idea that everyone a) thinks is impossible, b) then too difficult to bother with, c) anyone could have done that!
At least so I speculate.
