Airbus exec thinks 7E7 exists solely in Boeing's dreams

Posted on Sun, Jun. 22, 2003

John Leahy says the 7E7 is just a "marketing tool" to keep airlines from buying Airbus A330-200s.
Seattle Post-Intelligencer

PARIS - John Leahy is not losing sleep over Boeing Co.' s 7E7.

No more so than the Sonic Cruiser kept him up nights worrying about how Airbus would respond.

Leahy, the hard-charging, American-born leader of Airbus commercial sales and arguably the world's best airplane salesman, didn't think Boeing would build the Sonic Cruiser. And in fact, the program was officially shelved in December.

And Leahy appears convinced, at least he said so, that Boeing will never build the superefficient 7E7.

"I think it is quite similar to the threat posed by (the) Sonic Cruiser," Leahy said last week at the Paris Air Show.

"It is more a PR threat," Leahy said of the 7E7. "It is more a marketing tool than an engineering reality."

He said Boeing's Sonic Cruiser, a futuristic plane that would have flown at near the speed of sound, was nothing more than an attempt to distract airline customers from buying Airbus' A380 superjumbo jetliner.

"They basically told the airlines, 'There is something else coming. Spend the next couple of years studying it with us.' "

Boeing is using the same tactic with the 7E7 to keep airlines from buying more A330-200s, which would be the main competitor to the 7E7, Leahy said.

"It's guerrilla marketing," Leahy said. "It's an attempt to say, 'Don't buy my competitor's product now; just sit around until I think of something else to do.' "

Boeing has said the 7E7, which would enter service in 2008, will be about 20 percent more fuel efficient than the 767-300 or the A330-200. The Airbus plane in recent years has been winning the bulk of new orders in head-to-head campaigns.

Boeing sees the 7E7 as an eventual replacement for both the 767 and the A330-200 in what's known as the middle of the market.

"Boeing will eventually have to come up with a replacement for the 767," Leahy acknowledged. "But I don't think it will be anything along the lines of this superefficient twin (two engines). What you will end up seeing is a relatively ordinary airplane similar to the 767 that will try and match the A330-200. They may get close, but it will be a plain vanilla competitor to what is a tough standard to topple -- the A330-200."

The only way to really get better performance from a new plane than that offered by the A330-200, he said, is through new engine technology.

"You will have an $8 billion development program to make an airplane that except for engines might be 1 to 2 percent more efficient than the A330-200," Leahy said. "What's to keep us from taking that same engine and putting it on the A330-200? So what you are talking about is an $8 billion development program to get, except for the engines, a couple percent improvement, if that, over the A330-200."

Boeing has said the new 7E7 engines will account for less than half that 20 percent gain in efficiency over the 767 and A330-200.

Leahy noted that fewer than 1,000 Boeing 767s have been sold since the plane entered service.

"So 25 years and 900 planes. Figure out how you will get a payback on $8 billion?"

Boeing has never said how much the development of the 7E7 will cost. Analysts have said it could be from $6 billion to $10 billion. Boeing is also forecasting a potential market for the 7E7 of as much as 3,000 planes.

When the 7E7 enters service in 2008, Leahy said, Airbus can make up for that 2 percent gain in efficiency by simply selling the A330-200 for less.

"I can wipe out that 2 percent very quickly by having a lower priced airplane because I don't have to amortize an $8 billion program over 900 planes, if you can even get to 900 planes."