The 747-8 Isn't Selling. Boeing was Smart to Build It.

boeing's 747 family is arguably the most successful airplane program ever developed comprised of six distinct variants and 50 years worth of innovation the program has managed to rack up over 1,500 orders to date however the newest and most advanced variant of the jet the 747 - eight hasn't pulled its weight accounting for just 10% of all of these orders but despite sluggish sales building this jet was one of Bones shrewdest business decisions how is that even possible let me explain [Music] in order to understand why the seven for 7-8 is a success we're gonna have to go over a fair bit of backstory so bear with me for just a sec at the turn of the century Boeing and Airbus had crafted two very different views on what the future of aviation might look like Boeing envisioned a future full of point-to-point travel between smaller cities making connecting flights that major hubs less common doing so would decrease transit time for passengers and help alleviate congestion at airports however executing on this vision could only be done by way of a new ultra efficient mid-sized jet that could profitably connect cities that saw less the man while Boeing was focused on building a smaller jet Airbus was thinking big like really big at the time analysts were projecting substantial growth in global aviation demand this growth would be so fast in fact that the expansion of airports and related infrastructure would not be able to keep up as such Airbus executives surmised that the only way to satiate the increase in demand was by building a truly massive jet that could carry more than 500 passengers at a time both Boeing and Airbus reached their respective conclusions by doing extensive market research and competitive analysis going so far as to interview customers and passengers to lock down a clear picture however it's important to note that Airbus wasn't completely impartial when coming to their conclusion behind the scenes Airbus executives were undoubtedly influenced by what can only be described as airplane envy you see in the 80s and 90s Airbus was very much playing catch-up to Boeing while Airbus was certainly developing compelling aircraft of their own including the likes of the a320 and a321 still dominated in the minds of both passengers and Airlines thanks in large part to the 747 affectionately known as the queen of the skies its massive size and iconic shape made it synonymous with commercial air travel and frankly Airbus had no iconic jet of its own to compete in the process of constructing their vision of 21st century air travel Airbus executives simply couldn't ignore the impact that the 747 had on the aviation industry they became enamored with the idea that building a jet even larger than the 747 would serve to demonstrate Airbus's engineering prowess theoretically such a plane would become as iconic in the 21st century as the 747 had been in the 20th allowing Airbus to supplant Boeing as the world's premier jet maker in the eyes of the flying public and Airbus wasn't exactly shy and expressing their desires to build a jet to rival the 747 knowing this Boeing engaged in what might be viewed as a shrewd diversionary play it all started with a simple proposition Boeing came to Airbus in the late 90s suggesting that they could jointly engage in a study to look at the viability of new 21st century 747 replacements in agreeing to do so Airbus was teased with what could be their dream to build a super jumbo now felt much more real than it ever had during the course of the study there were clear warning signs that such a plane would not be viable for instance only two customers initially expressed interest and in 1997 the Asian financial crisis darkened the sails outlook and one of the jetski markets further Boeing pulled out of the study before its conclusion however by this point Airbus already seemed committed to move forward and in late 2000 Airbus's Board gave the green light to launch the a380 program meanwhile Boeing began mobilizing massive amounts of resources towards developing the 787 this plane would be packed to the brim with groundbreaking technologies and never before seen in commercial aviation these innovations would ultimately allow it to become the efficient mid-sized jet needed to capitalize on Boeing's of ubiquitous point-to-point travel okay so what does this have to do with the poor selling seven for 7-8 how does it factor into the equation well in short its existence forced Airbus to go all-in on the a380 even when it became apparent that the a380 would fail the 747-8 program was launched in 2005 this same year the a380 first began serving customers in a universe where Boeing decided not to build this jet the a380 would be completely uncontested in the jumbo jet market ultimately any airline who wanted a massive plane would have just one choice meaning Airbus wouldn't need to focus as much time or resources towards selling the jet such a scenario would present a problem for Boeing once it became clear that the mid-size 787 was the plane that Airlines truly wanted Airbus would have much more flexibility to redirect resources towards accelerating the development of a competitor and this would end up cutting into the 787's sales but by developing a competing jumbo in the 7 for 7-8 bowi placed an obstacle in the a380s path towards profitability since shareholders were counting on the a380 to make back its substantial development costs Airbus now had to focus all resources on the a380 to ensure that it didn't lose substantial market share to this plane now Boeing probably knew that the 747 - e8 was never going to sell all that well however they were willing to bite the bullet because the jet cost so little to build relatively speaking unlike the a380 which was designed from scratch least 747 - 8 was heavily based on a pre-existing airframe save for new engines and wings Boeing designers were already familiar working with its structure further Boeing already had the infrastructure in place to build this plane meaning they didn't need to spend a lot to establish a new by chain or build a new factories the result is that the 747 - a program only cost about five billion dollars to develop comparatively the a380 program cost over five times as much at twenty eight billion inflation-adjusted dollars now there's little doubt that boeing made the right bet with the 787 as it's outsold the a380 seven to one and when you look at what airbus is offering to compete with the 787 today it appears that the implicit pressure campaign from the 747 - eight was effective it wasn't until 2018 that Airbus first delivered an a330 neo a full seven years after the first 787 was delivered this jet covers the same 250 to 300 seat market segments as the 787 however it lacks many of the advanced features that makes the 787 so efficient including a carbon composite fuselage and wings between having its resources locked up into a 380 and the new a 350 program meant to challenge the Boeing triple7 Airbus simply was unable to make a more compelling 787 competitor and the numbers show that to be true today the a330 neo has garnered just one-fifth the total orders of the 787 on a side note though Airbus was still smart to build the a330 neo even though it couldn't match the 787's efficiency to learn why check out this video I did in the upper right okay I know we went through this whole video talking a lot about the a380 and the 787 and not talking that much about the 747 - eight itself but that's kind of the point the 747 - eight has always been in the background of this dogfight between the a380 and 787 having an implicit though not highly visible impact on shaping how that fight played out - Boeing's benefit but don't get me wrong it's not like the 747 - it doesn't have strengths in its own right we're still talking about the Queen while airbus has announced that the a380 would cease production in 2021 the 747 - eight actually still presents some sales upside for Boeing well it's highly unlikely we'll ever see another order for the 747 - 8i the passenger variant it's entirely possible we see more orders for the 747 - 8 f the freighter variant about 70% of all seven for 7-8 orders to date are for that freighter variant and it offers a unique value proposition it is the largest modern cargo jet in operation today when the - eight freighter was first delivered the global air cargo market was still reeling from the impacts of the 2009 financial crisis and really wasn't doing too hot however it has steadily rebounded considering the very first 747 was originally designed with cargo in mind it would be fitting that the seven for 7-8 continues to live on as a tremendous freighter plane but really at the end of the day it doesn't matter how many 747 - aids are sold freighter or otherwise what ought to be remembered is this the original 747 helped make Boeing the aircraft Titan it is today and its last variant the - eight played a key role in helping solidify Boeing's future this plan is a great example of a company taking a short term loss in order to reap a long-term game Wow I know that was a really long video for me this video was really fun to make into research and it's one that I've wanted to do for quite some time now oh and before you start complaining in the comment section I want to be clear that the seven four seven - eight is not the only reason the a380 failed or the 787 succeeded the success of an airplane program is dependent on a ton of different variables this just happens to be one of those variables what I would like to know though is whether you guys prefer the 747 or the a380 so tell me about that in the comments section and as always if you learn something new today leave a like please on this video because this one was hard to make and subscribe to keep learning and until I see you again don't forget to look up

Channel: Coby Explanes

Views: 1,214,509

Keywords: 747, 747-8, Boeing 747, Boeing 747-8, 747-8i, 747-8f, Lufthansa 747, Air China 747, Korean 747, a380, Airbus, Airbus a380, 787, Boeing 787, 747 vs a380

Id: UUmJ9rSVrKQ

Length: 12min 18sec (738 seconds)

Published: Sat May 16 2020