With the headlines focusing on the 737 Max issues, Boeing had many positive announcements following the annual Paris Air Show. But possibly the most fascinating news is still waiting in the barn and that is the pending production of the new 777X. This plane is the pending replacement for the aging and no longer in production 747. The plane is so large that the paint shop, which works on a 24-hour cycle, needs one full week and about 400 gallons of paint to push the completed plane out the door. This does not reflect the fact that the composite wings come already painted.
Boeing negotiated an $8.7 Billion tax break from the State of Washington to build the facility for the composite wings in Everett. The implications of this plane need to be fully understood as the coming brunt of the need for replacements for the 747 comes to the fore in about 2025. The market is estimated at 8,340 wide body jets from 2018 to 2038. This jet is approximately the size of the current 747 but with the two new GE9X engines the projected fuel savings are 20-30 per cent.
The ripple effect of gearing up for production of this monster is being felt throughout the supply chain for Boeing in Washington and that in turn brings home the fact that the implications for commercial real estate is more long-term health in our economy. It is the job of Seattle Commercial Real Estate to weigh these implications in order to better serve our clients.