Boeing gets earful of 777 advice from a customer with clout

One Boeing customer may have more influence than any other outsider on the crucial decision facing the company this year concerning the future of its star wide-body, the 777.

Tim Clark, president of giant Dubai airline Emirates, wielded his clout 10 years ago to define the long-range 777-300ER that is flying today. The resulting plane is the largest and best-selling aircraft in the 777 family.

Now the 777's biggest buyer is exerting his influence again on the strategic choice ahead for Boeing: To head off a looming competitive threat from the fuel-efficient, mostly composite A350-1000 that Airbus has in development, Boeing executives say they will either modify and improve the 777 or invest much more to go for an all-new plane.

In April, Clark met with Lars Andersen, the former head of the 777 program who came out of retirement late in 2009 to head the Boeing team that will make the decision by year-end.

"I said, 'Lars, you may run out of the room screaming, but this is what we want,' " Clark said in an interview this month at the Farnborough Air Show.

His prescription is an airplane the precise size of the 777-300ER but able to fly several hundred miles farther with a full 55-ton payload.

And should Boeing go for new or improved? He'll buy an improved version if it delivers that performance. But in the interview he also laid out an alternative concept he has pitched to Andersen: a new, large twin-engined jet family.

He also delivered a surprising judgment: He thinks Boeing executives shouldn't see their key 777 model under serious threat from the slightly smaller Airbus A350-1000.

"They think it'll take out the 777-300ER," Clark said. "People like me are saying, 'It's not going to do that. And as your largest customer, don't worry about it.' "

Emirates is an airline completely off the industry charts.

Many air carriers parked jets and deferred orders last year. Yet, even as the Dubai economy wobbled in the global financial crisis, the extraordinary growth of Emirates has not slowed.

At the Berlin Air Show in June, Emirates stunned its competitors — the big international airlines such as British Airways, Australia's Qantas and Germany's Lufthansa — when Clark ordered 32 Airbus A380s, bringing the carrier's total of superjumbo jet orders to 90.

Emirates already has 86 Boeing 777s — the largest 777 fleet in the world — and had 16 more scheduled for delivery before it announced a massive order for another 30 at Farnborough last week.

Analyst Richard Aboulafia of the Teal Group said Emirates' "fast growth rates make them a big player in any future 777 update or replacement decision."

Not only is it the biggest 777 customer, "they're also the second-biggest A350 customer. That makes this a one-airline horse race for the two manufacturers," he said.

What Clark wants

Clark said that back in 2000, when Boeing's leadership gave the go-ahead to develop the 777-300ER, he told program chief Andersen that the original design of this new long-range version wasn't good enough.

He demanded that Boeing make changes to raise the allowed takeoff weight and boost the engine thrust.

GE duly developed a version of the GE-90 engine with 115,000 pounds of thrust — more than any engine in aviation history. That enabled Boeing to design a heavier, higher-capacity airframe with the required range.

"I said, 'Lars, if you want us to buy this airplane, this is what you have to do,' " said Clark. "He went away and pulled a rabbit out of a hat, and we bought a lot of them."

So what is Clark telling Boeing today?

To fly his ultralong range, high-capacity routes, Clark plans to simplify his fleet to just three wide-body types — in order of increasing size, the Airbus A350, the Boeing 777 and the Airbus A380.

In the three-class luxury-cabin layout Emirates wants, those planes respectively carry 320, 354 and 489 passengers.

Clark is not interested in the Dreamliner, which is too small for his routes. He sees the 777-300ER as an ideal size for that middle slot in his fleet. In 2017 he'll start retiring his older 777s, he said, and he'll want more than 70 new ones of the same size over the following four or five years.

"We really, really like that aeroplane," said Clark, an Englishman. "Without a replacement for the (777-300)ER, we have one almighty hole. ... We have to have a solution."

Clark said his advice to Boeing is to develop a new family of twin-jets larger than the largest Dreamliner. He recommends the base size be that of the 777-300ER, and that Boeing develop a shrunk version and a stretch version that will offer him options at roughly 300 seats, 350 seats and 400 seats.

Today, Emirates flies the 777-300ER from Dubai over the North Pole to the West Coast of the U.S. to as far south as San Francisco. But to fly that distance, the jet cannot be fully loaded — Emirates has to take out 20 seats.

For the new model, Clark wants planes that can fly nonstop from Dubai to Los Angeles with a full load.

"I say to the guys, 'Listen, if we order $60 billion worth, don't worry about spending $15 billion to $20 billion on a new airframe (and) engine,' ." Clark said. "If you get it right, that line will last you 30 years."

Of course, that decision is not quite as easy for an airplane manufacturer as he makes it sound.

Boeing's board would have to sign off on a multibillion-dollar gamble, and hope to earn the money back over decades. And, said analyst Adam Pilarski of Avitas, it's possible that "the Emirates bubble will burst eventually and those hoping for all the deliveries will be bitterly disappointed."

Boeing Chief Executive Jim McNerney pointed out that Emirates' requirements are heavily skewed toward bigger airplanes, and its needs often differ from other airlines'.

"I'm pleased to hear his comments on the A350," said McNerney in an interview at Farnborough. "But there are those who don't have as long and thick routes as he does who see the A350-1000 in a more competitive light" against the 777.

"We are listening to (Clark). But we'll have to make the final decision on 777 in light of the entire market," McNerney said. "Satisfying Emirates, I am sure, is going to be part of that decision."