Boeing too plans superjumbo at $4 bn cost

Boeing too plans superjumbo at $4 bn cost
REUTERS

SEATTLE, JULY 6: Boeing Co expects to launch development of its proposed 747X superjumbo airliner in six to nine months, spending about $4 billion on the project, the company said on Thursday.

The go-ahead could come as soon as this year, Condit added. The 747X project was at the same stage as the 555-seat A3XX, with Boeing already offering to sign order contracts with airlines, subject to making enough sales to justify development, Condit said. He would not say exactly how many sales were needed to launch development.

"My guess is that it is in the range of 10 to 30, depending on the airlines," he said.

Derivative aircraft like the 747X cost far less to build than all-new models and therefore require fewer orders to justify development, Boeing has said.

Aircraft manufacturers are more confident in launching new aircraft if they book major customers that are likely to place repeat orders. "I would love to have three (launch customers), but we typically end up launching with one," Condit added.

Condit said Boeing was pitching the 747X to the same customers Airbus has announced as potential launch customers for the A3XX, a $12 billion project that the European firm began marketing last month.

Airbus has promoted the A3XX for years, with Boeing on the sidelines saying there was an insufficient market for such a plane.

The Boeing 747X would be a modified version of the existing 747 able to take off at heavier gross weights that would allow the creation of two sub-variants.

One would carry more fuel but only a few more passengers than the 420-seat 747-400. The other would have 500 or more passengers but only the same range as the 747-400.

Condit said his development estimate of $4 billion did not include the cost of creating new engines to power the 747X. Engine makers are offering two turbofan designs for the 747X and Condit said both were likely to be available on the aircraft.

"I think it is likely but that (engine option) decision has not been made at this point," he said.

Rolls-Royce Plc is offering one engine for the 747X while the world's other two big aero-engine builders, General Electric Co. and United Technologies Corp. unit Pratt & Whitney, are jointly offering another.

Between 20 and 25 per cent of the price of airliners goes to the engine makers. Boeing has offered only a General Electric engine on its latest model, the 777X, and Condit confirmed reports that GE had offered to partly finance development of the plane as part of the deal to make it the exclusive 777X powerplant supplier.

"The payment terms as part of that contract (with GE) included an initial payment" that could be used to fund 777X development, he said. General Electric's monopoly on that model would run indefinitely, he said.