Boeing Opts to Build a Larger 747

By Peter Pae

Nov. 16, 2005 12 AM PT

Times Staff Writer

Boeing Co. on Tuesday committed to building larger, more fuel-efficient versions of its three-decade-old 747 in a move that is expected to increase competitive pressure on European rival Airbus and its new A380 super-jumbo jet.

Boeing said it received enough orders to move ahead with the 747-8 model after Luxembourg-based Cargolux ordered 10 freighter versions and Japan’s Nippon Cargo Airlines purchased eight planes valued at more than $200 million each. The next-generation 747 is expected to enter service in late 2009.

The decision to build the 747-8, which will retain the signature hump shape behind the cockpit, signals that Boeing does not want to relinquish the jumbo-aircraft market to Airbus’ double-decker, 555-passenger A380 jet slated to begin passenger service next year.

Boeing is “not going to give it up without a fight,” said Richard Aboulafia, aerospace analyst for Teal Group Corp. “They’re clearly committed to the market in all size ranges.”

Tuesday’s announcement also is expected to bolster prospects for 747 parts makers in Southern California, particularly at Vought Aircraft Industries Inc.’s Hawthorne plant where 530 workers assemble the aircraft’s massive center fuselage.

In recent years there has been a drop in 747 orders, and the plant faced the possibility of shutting down by the end of this decade. During its heyday in the mid-1970s, the Hawthorne plant employed 2,500 people and produced seven 747 fuselages a month, compared with one a month now.

“This is obviously great news,” said Lynne Warne, spokeswoman for Vought Aircraft. No new contracts with suppliers have been signed, but Boeing officials said it probably would use many of the same 747 parts suppliers. Final assembly of the 747 will be at Boeing’s Everett, Wash., plant.

Since the 747 entered commercial service with Pan Am in 1970, more than 1,360 planes have been delivered, and for decades Boeing dominated the large-aircraft market. But 747 orders slowed because of financial problems across the airline industry and from Airbus’ commitment to its super-jumbo A380 jet, which could seat nearly 150 more passengers than the Boeing craft.

Boeing’s 747-8 will seat at least 450 passengers -- 34 more than the current model -- and will have a range of about 9,200 miles, matching the A380 and outperforming the current 747 fleet by 900 miles. The fuselage of the passenger version will be 12 feet longer than previous 747s, while the freighter version will be 18 feet longer.

Boeing said the 747-8 would consume 14% less fuel per passenger than the Airbus A380 and would use engines being developed by General Electric Co. for Boeing’s upcoming mid-size 787 aircraft.

Airbus officials belittled Boeing’s decision Tuesday, saying that Boeing “had to do something” to react to the A380. Boeing is “just adding some new frame to a 1960s design. Is that what the airlines want?” said Mary Anne Greczyn, spokeswoman for Airbus North America.

Analysts said the success of the 747 would depend on how many airlines ordered the passenger version of the aircraft. So far, the biggest interest in the new plane has come from cargo carriers.

In making the launch announcement, Boeing’s president of commercial airplanes, Alan Mulally, said the company expected to win the first orders for its passenger model next year.

“The interest for the airplane is phenomenal,” he said in London.

The Boeing plane is likely to spoil Airbus’ efforts to wrest away the large-aircraft market. Since Airbus started taking orders for the A380 in 2000, demand has slowed. Airbus now has 149 orders for the A380, which cost about $275 million each, but analysts say the company needs at least 300 sales to break even.

Airbus also has struggled to deliver the first A380 and now expects to turn over the first plane to Singapore Airlines Ltd. six to eight months late.

Another problem with the A-380 is that its grand size is forcing airports to widen runways and enlarge passenger terminals to handle the double-decker plane.

The delays have apparently frustrated some airlines, prompting them to take a closer look at Boeing’s new 747.

A spokesman for Singapore Airlines, one of the more influential buyers in the industry, said it was evaluating the 747-8 and raised the possibility that the airline could operate both the 10 A380s it has ordered and the new Boeing plane.

And in an interview with reporters Monday, British Airways Chief Executive Willie Walsh said the airline was interested in buying the 747-8 because the A380 “is too big an aircraft and there were big question marks” about the Airbus plane.

So far, the biggest demand for large aircraft have been from cargo carriers, a growing industry because of heavy demand for transporting goods across long distances quickly. More than 2,000 cargo planes will be needed by air-freight services over the next 20 years, according to Seattle consulting firm Air Cargo Management Group.

Ironically, the 747 was initially designed in the 1960s to be a military cargo plane. But after Boeing lost an Air Force contract to Lockheed Corp., Boeing redesigned the plane for commercial use.

Boeing shares rose 77 cents Tuesday to $67.

(BEGIN TEXT OF INFOBOX)

Battle of the super planes

Boeing unveiled its latest version of the 747 aircraft to compete with the upcoming Airbus A380, the longest, widest, tallest commercial airliner. How the two compare:

Boeing 747-8 Intercontinental

Passenger capacity: 450

Length: 243 ft., 6 in.

Wingspan: 224 ft., 9 in.

Tail height: 63 ft., 6 in.

Maximum takeoff wt.: 960,000 lbs.

Maximum fuel capacity: 60,125 gal.

Range: 9,200 miles

Cruise speed: 565 mph

Price: $200 million

Airbus A380

Passenger capacity: 555