Boeing has finally admitted defeat with its poorly selling 717. Is it time for the industry to wise up to what the market really wants?
Boeing's decision to axe the slow-selling 717 comes as no surprise. The biggest shock was that it took so long. Indeed, the programme led a charmed life for years, even teetering on the brink of collapse long before it was finally launched as the MD-95 in 1995. To the surprise of some who saw a longer-term demand for the MD-11F, it was also the sole Long Beach-built airliner to survive the Boeing-McDonnell Douglas merger. Yet even by the time it was adopted into the Boeing family in 1998 as the 717, the T-tail twin had already assumed the role of the unwanted stepchild.
Despite its sturdy construction, competitive economics and environmentally friendly features it just did not seem to fit easily into either Boeing's product line or the market in general. Although launched into life with Douglas's original confident predictions of a market for more than 2,500 aircraft in the 100-seater range over 20 years, it took 10 long years to accrue just over 150 orders.
The death of the 717 therefore poses as many questions about the market as it does of Boeing. Is this latest casualty positive proof that the 100-seater market is too small for more than one aircraft type, or worse still, is it proof that the market does not really exist at all? With even fewer sales than Boeing in this area it is unlikely that Airbus will declare victory with its little A318. Launched as something of a spoiler and never really with market dominance in mind, the A318 has become more of a prop for the Airbus narrowbody family. With the 717 threat gone, will the A318 eventually follow it into the small jet graveyard? This is already littered with the tombs of the BAe 146/Avro RJ, Fokker 100 and the stillborn Fairchild Dornier 728/928JET, MPC-95 and AE31X, to name but few, and unhappily there seem to be plenty of plots still available.
One of the most anxious to avoid an early grave is surely Bombardier, whose BRJ-X remains a haunting presence. A critical go/no-go decision on the CSeries family lies only weeks away, so will the demise of the 717 be good news or bad for Bombardier? On the face of it, it is surely good. After all, Boeing turned down Bombardier's invitation in 2004 to join the CSeries effort on the basis that it would make bad business sense to aid a competitive product. Now that Boeing has seemingly admitted defeat, Bombardier could see this as a positive clearing out of the market. On the other hand, what message does it give to the risk takers when they see the end of such a well-engineered, well-supported and financially heavily backed product as the 717?
In the meantime, the celebrations are probably still going on south of the equator where Embraer has just completed filling out its 170/175 and 190/195 E-Jet series. Like its Canadian competitor, Embraer is convinced that the 100-seat market not only exists but that it is poised for expansion. Unlike Airbus and Boeing, both forced to use legacy derivatives, Embraer rests its case on the back of purpose-designed, efficient, clean-sheet aircraft designed to grow up to fill the niche and not shrunk down to fill it.
Here the 717's demise opens yet another can of worms. Is this more proof of the dreaded "derivative disease", and are Airbus and others in danger of infection? Having shut down two programmes in as many years, Boeing could soon face similar threats to the 747 and 767, the backlogs for which have dwindled slowly to just 32 and 25 aircraft respectively. The threat to the 767 in particular is great, the backlog now widely considered insufficient to sustain continuous production through to a time when large-scale tanker production could begin.
The fate of the 717, perhaps the ultimate derivative of the DC-9 - ironically probably the best selling 100-seater jet in history - should serve as a major wake-up call. The age of derivatives is coming to an end, and the quicker the airframe makers can convince Wall Street that higher research and development funding is good for business, the better. Bombardier's plan for the CSeries is itself a tacit acknowledgement that it has derived itself into a hole that even Airbus will eventually face.
The A350 could be considered its first major "retread" and with massive costs on the A380 and military A400M programmes, the temptation of taking the derivative route will be huge. And to anyone not yet convinced of the fallacy of the derivative policy here is an idea: go to Long Beach in mid-2006 and watch the last survivor of over 3,600 Douglas-designed jet airliners take to the skies. And you won't have any trouble seeing its departure as nearly all of the surrounding factory buildings have now been flattened.
Source: Flight International
