Boeing's 787 Revolutionizes the Industry, Creating New Opportunities
Michael Boyd, president of The Boyd Group, told CNBC’s "Squawk Box" that Boeing’s 787 Dreamliner will revolutionize the aircraft industry and will, paradoxically, create an opening for competitor Airbus.
"(Boeing) didn’t roll out an airplane," Boyd said Monday. "They let a genie out of a bottle. It may be a genie that Boeing can’t control because this represents a total sea change in the way airplanes are built, and it’s one that other manufacturers can take advantage of… (and) it’s not something that Boeing will necessarily be able to take advantage of long-term."
He projected ten-year demand for the Boeing 787 at about 1,875 aircraft, but he doesn't expect Boeing will be able to fulfill that demand on its own.
"Someone else will fill that gap," he said, noting that this will create an opening for Airbus, which is owned by the European Aeronautic Defense and Space Company.
"This is an airplane that’s a 'must have.' Boeing can’t meet the demand so Airbus will fill in," he said.
Boeing’s Dreamliner, which relies on composite materials rather than aluminum, "leapfrogs" current manufacturing techniques, he said.
"You don’t need a big factory in Wichita to build it any more," Boyd said. "It will be built around the world so other manufacturers down the line will be getting into (this) too. It’s a big change and one that long-term might represent more competition for Boeing – not less."
The plane is a technological triumph, but economics will trump the "gee-whiz" factor among prospective buyers.
"The economics of the airplane are going to drive (demand)," Boyd said. "If you’re flying trans-Pacific, you better have this airplane. Our friends at Northwest have 68 on order and option. They’ll have a huge advantage over, say, United. So, United is going to have to jump in. It’s all economics. The comfort part is nice, but trust me, you’re still going to be squeezed in a nice, tight coach seat."
Randy Babbitt, chief executive officer of Eclat Consulting and a former pilot, said the Boeing 787 has "huge potential."
"It has a huge advantage for the carriers," Babbitt said. "This technology is going to save a lot of money in fuel, passenger convenience, weight – all the key components that airlines would be interested in."