Plane guru says that much more needed for 787 program sales to break even-Seattle Times

PHOENIX — the most influential man in the world of commercial aviation, aircraft lessor Steven Udvar-Hazy, delivered good news and bad news for Boeing at a conference here Tuesday.

In a ringing endorsement of the proposed new Boeing small plane strategy he predicted that "on the basis of historical performance and only their DNA," Boeing build a new family of the plane that will "address the next 25 to 30 years of the airline requirements."

But after he from the stage where he spoke on a panel industry, Udvar-Hazy also gave a shocking assessment of the continuing 787 Dreamliner development program.

Because of all the delays, "the break-even point on the 787 has far, far to the right, moved" Udvar-Hazy said in an interview with reporters huddled around him. "The costs of research and development has skyrocketed."

Udvar-Hazy said his guess is that Boeing will deliver 1500 Dreamliners just to break even.

That is almost twice the current count of fixed orders, at 843. A typical first assumption for break even on a new jet programme is more like 400 or 500 aircraft.

Suggest a break-even of 1500 indicates the financial implications of the jet programme delays is disastrous.

Udvar-Hazy is famous in aerospace industry for his invention of the airplane-leasing business, making him a billionaire with his former company International Lease Finance Corp (ILFC).

He has personally purchased more than 800 aircraft from Boeing more than 30 years, give him regular access to Boeing leadership and their latest thinking.

He has not less impact on Airbus. In 2006, during this same annual meeting of civil aircraft financiers and landlords, the international society of transport aircraft Trading (ISTAT), caused Udvar-Hazy public been savaging of the Airbus A350 beginning design the European airplane maker to scrap the idea and come up with an all-new jet.

This year, Boeing received the aviation equivalent of a papal imprimatur for its proposal to build a new family of aircraft to replace the larger 737 and 757 models, a strategy that contrasts with the Airbus decision to add new engines to its existing single-aisle A320.

Udvar-Hazy outlined how Boeing the impulse of the great performance needed to justify an expensive all-new design can get 2020: an improved version of the engines built for Airbus can use, but with a larger diameter fan to make them not only more fuel efficient but also impossible to retrofit on the A320.

Such fuel efficiency improvement "will respond to all the regulatory, environmental and operational costs limitations is facing the industry."

"You build a multidecadal workhorse" that will enable Boeing to "safe in the next era of," he said.

If said Airbus, Udvar-Hazy for his decision to a new engine on its current narrow-body aircraft was forced by lack of money.

He said that the cost of fixing the A380 double-decker, then develop its new A350 aircraft and the A400M military cargo plane, Airbus will tax the public finances for the next five years.

"It will not be possible as a practical matter for Airbus to launch an entirely new aircraft," he said.

The Airbus interim solution remains a threat to Boeing in the short term.

Udvar-Hazy said Boeing will have to work on incremental 737 improvements big sales losses to the re-engined A320.

"Airbus makes a very strong push with both Delta and United," he predicted.

Udvar-Hazy said he thinks the top of the new family of Boeing 757-size a jet with more than 200 seats, for which he thinks that a twin-aisle will be meaningful.

But he said that the lower limit will be approximately 150 seats. That would be the market segment of still-smaller jets leave the new Bombardier CSeries jet, and maybe Embraer of Brazil and Russian and Chinese newcomers.

In a sour note for this region Udvar-Hazy said that Boeing would find it difficult to compete in the construction of smaller jets against low cost countries because of the high cost in the Puget Sound area.

He said to stay in this market segment, Boeing may have to shift from production to some nonunion plants.

But this issue may be moot. Boeing commercial aircraft chief Jim Albaugh indicated at the Conference Monday that if the company moving forward with its new jet family goes, it probably won't go under 150 seats.

Albaugh will undoubtedly like to Udvar-Hazy support. At the same time, Los Angeles-based the lessor's comments on the Dreamliner.

Udvar-Hazy said the first 787-8 model overweight to such an extent that Boeing will have more powerful engines to increase the maximum takeoff weight and meet the specification of range and payload.

He said that the promise of lightness of the Casco of carbon-fiber plastic composites was sunk by the need to structure with titanium in locations, including the place where the wing with the body.

"I have the feeling is that the aircraft will always heavier" than intended, Udvar-Hazy said. "It just goes to a heavier, more powerful animal."

He said the second version of the 787, the 787-9, will be much better, and a proposed third version, the larger but shorter range 787-10, will be a success.

In another Welcome piece of analysis for Boeing, he said the pressure to redesign the company star wide-body, the 777-300ER, is now much less because the rival Airbus A350-1000 not only threatens to leave but new more powerful engines need to compete.

That's happiness, for Boeing has enough to do.

Dominic Gates: 206-464-2963 or dgates@seattletimes.com