You have probably heard that Boeing is about to celebrate the company’s 100th birthday but you may not be aware of some related data bits like revenues, divisions and so on. You must fully realize that roughly 1600 congratulatory words cannot begin to do the company, or the birthday, justice. However, here is possibly the world’s shortest tribute summary – Happy Birthday Boeing!

IN THE BEGINNING:
In 1916 William Boeing started Pacific Aero Products and the following year the company was renamed The Boeing Airplane Company. The company became a leading producer of commercial and military aircraft (including helicopters, satellites and more). However, you might not know that over the years the company completed a series of strategic mergers and acquisitions to become the world’s leading aerospace company. Last year alone, (2015) the company posted revenues of $96.11 Billion USD. As we noted, over the last 100 years, they absorbed a large number of other aerospace pioneers and here is a list of names you might, or might not know: Douglas Aircraft Co (1921), Stearman Aircraft Co. (1927), North American Aviation Inc. (1935), Piasecki Helicopter (1940), McDonnell Aircraft Corporation (1945), Hughes Space & Communications (1948), McDonnell Douglas Corp (1967), and Rockwell International (1968).

MINIMALIST HISTORY:
The history of the Boeing Company is no easy challenge to describe and outline successfully in a weekly newsletter… so we won’t even try to do it. After a lot of research and a few wonderful books on the subject, we found one story that really sums up the effort, skill and luck involved in developing modern airplanes. In this case we will be talking about jet airplanes, and it is the story about the discovery of jet technology developed by the German Luftwaffe’s R&D efforts and the impact on the first Boeing commercial jet planes. Here is the setup: A US General (Henry “Hap” Arnold) who was instrumental in the development and deployment of the prop driven B-17, B-24 and B-29 aircraft, was tasked in 1946 with defending the future and he called on Theodor von Karman, Director – Guggenheim Aeronautical Laboratory – Cal Tech, to head a committee of scientists and set up a research plan to assess how German discoveries could be best used for future defense. We note that at the same time, the Boeing prop-driven Stratocruiser was faltering on low sales so new CEO, William Allen, who was very research minded, provided his Chief Aerodynamicist, George Shairer to help review the discoveries. It was probably a coincidence that he, at that time, was developing the XB-47 aircraft that would greatly benefit from the Luftwaffe’s secret research and engine discoveries. Here is how one Boeing story author noted the find:

“Military Intelligence experts were unsure where the Third Reich’s secret aeronautical facility was located. It turned out to be deep in the countryside of the municipality of Volkenrode, east of Hanover and North of the Hartz Mountains. The facility was camouflaged much like Boeing’s wartime plant in Seattle”….”When the Operation LUSTY team arrived, he (Superintendent) greeted them warmly and invited them inside. What they discovered would change the course of aviation history and elevate Boeing to the top position as a manufacturer of commercial airplanes.
The group uncovered a cache of priceless aeronautical data indicating that the Luftwaffe was far more technically advanced than previously believed. This intellectual treasure included research reports describing a jet plane with novel wings that were swept back at a diagonal toward the tail, as opposed to crossing the fuselage in the shape of the letter T.
Germany had already produced the first operational jet fighter, the Messerschmitt Me 262, near the end of the war, which looked like a conventional plane minus the propellers. The new swept-wing jet was a startling departure. The treasure trove of data also included assessments of the unique jet’s performance in a German wind tunnel, which indicated it could fly at nearly the speed of sound. The team was awed by the findings.
Even better, they were given the opportunity to interview the facility’s director, Adolf Busemann, who had worked with Von Karmen before the war and he was considered the Luftwaffe’s top aerodynamicist. Busemann elaborated on the research findings and reminded the group that he had given the paper on swept-wing developments at a conference in 1935, which several of the team members had actually attended. Back then they did not see the promise of the research. Now they had a different reaction: Busemann had all but built a near supersonic jet.” – Higher: 100 years of Boeing, by Russ Banham

We should mention that Banham noted the following: “Shirer made the very gutsy call to immediately stop all design work on the XB-47 and transform it instead into a swept-wing turbojet bomber.” The rest is certainly history for the B-47… and the 707, but to give you a better idea of Boeing’s excitement of first swept winged, jet powered commercial aircraft flight, we found a book written in 1959 that wonderfully describes that first flight experience off a 5382 foot Renton runway (one side on Lake Washington), on July 15, 1954:

“Ever since that time [First Flight at Kitty Hawk, NC] people have continued to hold their breath, or at least to build up to a state of nervous tension on subsequent “First Flights.” The situation fifty-one years later, along the runway of the municipal airport at Renton, Washington, has changed in respect to the type of airplane involved, but human emotions are at least consistent, and the tensions were much the same.
At fourteen minutes past two o’clock on the afternoon of July 15th, 1954, Boeing Chief Test Pilot, Tex Johnston advanced the throttles of the 707-jetliner prototype. It was a beautiful day. Clouds washed in sunlight, and a gentle breeze at seven miles per hour out of the west-northwest.
Thirty seconds after the four jet engines reached their maximum thrust output, Johnston released the brakes. And at that moment, the decades-old practice of sweating out the first take-off was renewed in all its intensity.
Sixteen million dollars of private enterprise began to roll. The 707 was light, down to a bare one hundred and ten thousand pounds for her flight debut.
An enormous gamble was being put to the test. Aviation companies do not invest sixteen million dollars in a single airplane as a matter of course!”…”If the prototype failed and plunged to a crash, much more than sixteen million dollars would be lost.”….”For all these reasons, the people who designed and built the sweptwing giant must have surely have held their breath that afternoon in 1954!” – BOEING 707, by Martin Caidin

Obviously, if you are only in the airplane business, it’s a daily gamble. But today, diversification has helped reduce that terror, but there are still many other issues that make Boeing an interesting, creative, and challenging place to work.

Next, is a bigger picture of that “new” Boeing.

TODAY:
We should mention that over the years, the divisional layout has changed but if you look at today’s triumvirate, you will have a big picture of the present company: A) Commercial Airplanes, B) Defense, Space & Security, and C) The Boeing Capital Corporation. Let’s break down each group to give a better idea of who and what.

A. In Commercial Airplanes, the company features the Popular “7 series” aircraft. The other entity there is Commercial Aviation Services that supports air carriers worldwide. Headquartered in the Puget Sound region, the airplane folks and services generate some $66 Billion dollar part of the revenue pie with approximately 33,000 employees. Also, we should mention Boeing has some 10,000 airplanes flying (approximately half of the world fleet) which is where a lot of your IFEC is involved.
B. Next, in Defense, Space & Security, features Military Aircraft (the world’s largest manufacturer), Global Services & Support that provides training, maintenance, and other services to government customers worldwide, while Space is the world’s largest provider of commercial and military satellites (and major service provider to NASA), and finally, Security delivers large-scale systems integration and support and develops networking technology and solutions. The Defense, Space & Security group, formed in 2000, delivers some $30 Billion in revenue and has approximately 50,000 employees.
C. And lastly, Boeing Capital Corporation, that provides financing solutions focused on customer requirements. This group is headquartered in the Puget Sound (WA) and is the financing subsidiary of the Boeing Company.
Globally Boeing sells products and services in over 150 countries, 70% of which are outside of the US. Further, the company has contracts with over 20,000 suppliers and partners all over the world. All told, there are some 160,000 Boeing employees in over 65 countries worldwide. So there you have a big picture of the company and its major products and/or services.

A BIRTHDAY CELEBRATION EVENT:
In honor of the birthday, Boeing is hosting a Founder’s Day Celebration from July 15 – 17 at the Boeing Museum of Flight in Seattle and we note that the museum will offer free admission those three days. If you will be nowhere near Washington State, you might want to view the Founders Day Ceremony live webcast featuring senior executives on Friday, July 15, 2016 at noon (PDT) at www.boeing.com/fdwebcast

LASTLY:
We would like to wish all the present Boeing and past-Boeing readers a hearty congratulations on bringing a better aviation experience to our lives.

Farnborough was a big success for Airbus, who beat out Boeing almost 2 to 1, at least based on aircraft sales dollars there – $75.22B and $40.2B respectively, sort of! At show’s end, Airbus had some 496 aircraft orders/commitments from the show and Boeing chalked 201, but there were some deals in the works. There were 121 A330neo commitments, and 317 A320neo orders that included the 3,000th order of that family. Yes, Airbus beat Boeing “at the show” but a decision by Emirates in June to cancel 70 A350’s ($21B) and another decision in July to accept a Boeing deal for 150 B777x’s, with the right to purchase 50 more somewhat changes the picture. Since Emirates also cancelled the A350 orders, they might actually exercise the 50 B777 option. So where do they stand? While not technically a ‘Farnborough deal’, Emirates is purchasing 115 B777-9Xs and 35 B777-8Xs, the deal value adds over $70B to Boeing’s larder. Industry estimates say a big deal like this is only worth $31B, but if you add that to the $40.2B the show netted Boeing, it looks as if they are at least the July winner! (By the way, the Qatar 777X order announced at the show is indeed a firm order, so we are told.)

To help understand, we contacted Boeing and got this response: “There were no surprises on our end at the air show. We know that Airbus stockpiles orders specifically for the air show, while Boeing announces orders throughout the year. While the air show orders totals you list are correct, I should point out that Boeing went into the air show with more net orders for the year (Boeing 649, Airbus 290)—and we left the air show with more net orders for the year (Boeing 783, Airbus 648). The air show is simply one week out of 52″.

After reading Boeing’s Current Market Outlook we wondered how big the total IFE market over the next 20 years? Lets have some fun.

Below is the projected (20 years) airplane market in the study. We then made a seat number estimate at the average number of seats on each option. Finally, we picked an average seat IFE price of $5000 per seat with the assumption that each and every seat received IFE. Obviously our assumptions will not happen in real life; however, we wanted to get a feel for the cumulative market size, and based on a yearly IFE sale today of $2 – $3 Billion dollars, our dollar number estimate is roughly three quarters what is currently spent per year but we thought our readers would find the process interesting… and feel free to plug in your own numbers.

IFE 20-Year Market Growth Chart

If you look at the total seats from the aforementioned chart and multiply each seat by our $5,000 IFE estimate, you will get $36,208,250,000 as a total value of 20 years worth of seats. Now, divide by 20 years and the yearly total is $1.81B per year estimated average.

Lets stop for a minute and talk about the $5000 per seat for IFE. First, it is not realistic to assign IFE for every seat on the plane, on every plane, and the same value for every class of seat…we know that. And $5000 is probably good for a coach seat but we have heard numbers or upper class seats of at least $20,000… and we haven’t even mentioned inflation. Further, the aircraft seat numbers were arrived as an average number of seats per plane in the categories outlined in the Current Market Outlook. Our goal was not to give readers a NUMBER that reflects the some value that is slightly real today, but rather, a “water cooler” talkable number and a system to get there. Of course, real data clouds the result but we wanted a “number’ and thought this way, you could enter your own data and installation predictions/prices and show your boss how smart you are!

We should also note that the “number” does not include connectivity and new product developments and derivatives. Nor do we consider technology developments on the ground. If you look at IFE today and the consumer demand for IFE or connectivity, our numbers 20 years ago would seem way out of place today.

Then, for 20 years of IFE sales we average about $1.81B per year! We know the price per seat is going to go up, we know that there will be a lot of wireless connectivity and in-seat power and there will be many aircraft with no IFE. We also know an “average” seat count is not correct, and on and on. So don’t send us letters about how our assumptions are out of whack… we know it, we just wanted to get an average ‘feel’ of 20 years worth of value of the IFE business!

Along with the growth of the IFEC market value there is the growth in the design of IFEC, and the change in the content used. That is to say, in twenty years, IFEC will be different, and the content used in the new hardware will be different (i.e., 3D, 4D, “n”D, hi res., and so on). Make no mistake, it will change, not necessarily because the IFEC vendors want lighter weight hardware, not necessarily because airlines want different, higher quality content, but because passenger wants and needs will change just like they have over the last 10 years. If you think airlines are looking at HD video display because they want it, you might think again. It is the passenger home entertainment quality that keeps the demand for better movie quality. Today, if they are not satisfied with the screen, out comes the laptop, iPad, and in many cases, the personal telephone handset. What we are saying is, today it is the passenger that drives the IFEC requirements. If you need more proof, consider inflight Wi-Fi connectivity. Home Internet speeds are the driver that keeps the folks like Gogo, Panasonic and others awake at night. You climb aboard the most sophisticated flying machine ever invented and bring along a handheld device that has the fastest, lowest power consuming device/processor ever invented, and you just naturally expect the rest of the experience to be sterling because at your end, you have paid your dues. Guess what, connectivity to aircraft has not grown with the airplane technology, it came 90 years afterward so expecting it to develop at the same rate is unreasonable… it just is.

In reality, the IFE answer in the future could either be full-up everything, or nothing… based on what you believe passengers will bring aboard. In reality the answer may be both, and everything in between. If the past is any indicator, the aforementioned statement is probably going to be true. Want more proof, a reader sent us a link to one of the best airline position articles we have seen. As airlines become “hybrids” the world of aviation continues to change. It’s about Southwest, but we think you will get the message.

Next week we will have a look into the future with two if the best in IFE… Rich Salter and Michael Childers… don’t miss it.

For you history buffs, we supply a link and note we received in from a reader: “On Saturday, July 12, I led a walk-around tour at the Museum of Flight – covering the history of Boeing jetliners. My thrust was perhaps a little different from that which some may have expected. For me, the success of Boeing’s jet transport line was not the designing, and building, and flying of the 707 – it was something else – a subtle but profound attitude change inside Boeing. And the critical event was not the kick-off order for the 707 from Pan Am, but rather the later order from American Airlines – Bob Bogash.” The 707 is 60