New airplane technology from Airbus means that Boeing is going to face issues selling their 777 jumbo jet until they come out with their next generation model. The new planes built today by Airbus are more fuel efficient and need less maintenance. However, Boeing is still optimistic for profits in the next couple of years.
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Delta Airlines recently purchased 50 jets from Airbus instead of from Boeing. This goes to show how everyone wants new planes, not outdated models. However, Boeing is confident that demand for their 777 will stay strong through the end of the decade, especially from international airlines.
Boeing sells their 777-300ER jet for $330 million. It’s the main plane sold by the company, making it a major factor in Boeing’s profitability. The 777 jumbo jet has really strong pricing, allowing room for discounts, but sometimes Boeing has discounted the plane by more than 50 percent. That’s obviously not good for business.
A next generation 777 jet from Boeing is coming in 2020. So, it doesn’t make sense for airlines to order a 777 now when they won’t get the delivery for two to three years anyway, and that’s just short of the new model release. Despite this fact, Boeing still took 55 orders this year. They only need 40 orders per year to stay profitable. Demand for the 777 is definitely down and airlines are favoring the alternatives from Airbus and other jet manufacturers.
There’s no doubt that Boeing will be able to compete better once their new 777 jet comes out, but business could be a little slow for a few years. Boeing still expects to make a profit and market their 777 model accordingly. After all, it is still one of the most used planes in the world, making repairs cheaper and faster. [/show_to]
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