Boeing 747-400 Support

The 747 contributed to a financial hemorrhage and the near ruin of Boeing. Without a Pan Am order for 25 aircraft, the 747 could not have been launched and the airline's president, Juan Trippe, played his trump card for all it was worth. The net result was that by following Trippe's vision, Boeing nearly bankrupted itself. Incredibly, with development costs of US$1.2 billion, Boeing was spending three times its total capitalization value on the program.

But in retrospect, it must be acknowledged that the 747 decision was not just courageous, but also farsighted. By developing an aircraft with three times the passenger capacity of the 707 and much greater range, Boeing achieved a huge productivity breakthrough in aviation. The economic gains in seat/mile cost paved the way for a new rapid spurt of growth auguring in the dawn of the era of mass air transportation. Perhaps the one real irony of the risky 747 decision is that Boeing subsequently became very cautious and reluctant to invest in new product.

To offer a balanced view it should be acknowledged that at the time of the 747 launch some concern with the risk was evident in Juan Trippe's requirements. One of the virtues of the 747 was that it was designed for easy conversion to a cargo aircraft. Before long dedicated freighter and Combi versions were being produced. The aircraft also allowed for significant development, which came with the -300 and -400 series. By 1993 more than 1000 747s has been sold and by the turn of the century half the world's airfreight was being carried by 747 freighters. The aircraft has also been very profitable. With a ticket price on some models of up to US$200m and with no real discounts available the 747 has been a very lucrative monopoly product for Boeing.

The skills and competencies to design and build aircraft that are needed in the workforce can only be built up slowly. With the 747-400 Boeing found that its new workforce was not up to the job. `Hire and Fire' was causing big problems.

The new and inexperienced workforce that had been hired after the end of the latest recession found the design of the 747-400 too complex to integrate. Boeing managers ordered compulsory overtime and 60-hour working weeks became commonplace. But the problems also affected other Boeing planes and complaints from customers about operational problems began to mount. In consequence, `the Federal Aviation Administration (FAA) ordered special inspections of all Boeing jetliners produced since 1980 to look for defects that might affect safety. These problems contributed to an ensuing industrial meltdown at Boeing during the 90's.

The future for Boeing aircraft spares

At the beginning of 2010, Japan Airlines JAL filed for bankruptcy. As part of the planned restructuring, the airline retires its fleet of 747-400 aircraft. This coincides with the 40th anniversary of the 747's entry into service. 810 examples are still in service worldwide, but are considered to be too big or too inefficient to have any future. Surplus 747-400s will mean a drop in purchase and lease rates. This may, however, result in it being potentially cheaper to convert passenger -400s to freighters than buy new, even if they are less efficient. Because the aircraft is out of production, there is a buoyancy in the market for OEM strategic offload manufacturing of Boeing aircraft spares that are not common with the latest production models. They therefore need to be manufactured by the Boeing supply chain or supplied by the many companies worldwide who deal in Boeing 747-400 support.