OM in the News: Life Cycle and the Last Boeing 747
Katherine Garcia
Introduction
Since its beginnings in 1916, Boeing has created a wide number of aircraft which have made it a
“leading global aerospace company” (Boeing, 2023). Some of those models have failed while
others have had a successful trajectory revolutionizing airspace´s history. One of these is the
Boeing 747. Considered the first “Jumbo Jet” for being the first wide-body aircraft, has had over
50 years of life, changing the course of the aviation industry.
From its beginning in the 1960´s, when the demand for air travel was high and aircraft developers
realized the need for a bigger airplane, the 747 facilitated lower fares and accessibility to this
transportation method to many more people making continental travel accessible to many (Rains,
2023).
The 747 was for a long time the lead aircraft, a symbol of groundbreaking technology which made
it the most popular Boeing plane ever built. From serving as Air Force One to being in Hollywood
movies like 1973´s James Bond, the 747 is the “Queen of the Skies” (Isidore, 2022).
Despite this, in 2020, Boeing announced they would stop building it since the industry´s focus
transition to more fuel-efficient and operational flexible aircrafts such as the 777, 737, 767, and
787, putting an end to the life cycle of the 747 (Ros, 2023).
This paper analyzes Boeing´s operations and productivity based on the 747´s life cycle concerning
its product design and strategy.
Methodology
To analyze the life cycle of the 747, historical data from Boeing and its sales and tendency is
examined as well as projections for the company based on their current operations and their
competitors´.
From its design to its testing, Boeing´s 747´s supply chain and production have boosted Boeing´s
success. Produced in a factory at Everett, Washington, with the Guinness World Record as the
largest building in the world due to its volume, the 747 not only changed the aircraft industry and
way of traveling but Boeing´s history itself. While creating the 747, Boeing put the company´s
future at play, had this aircraft failed to meet the expectations set or failed to fulfill the orders
placed, it might have resulted in the company´s bankruptcy. However, it resulted in a complete
boost, making Boeing a competitive business with outstanding sales and supply recognized
worldwide. The 747 alone counted with the work of over 250 companies to make the aircraft and
its supply chain possible, optimizing the cost and times of the manufacturing process (Spencer,
2014) (Boeing, 2023) (Heizer, Render, & Munson, 2017).
From its first commercial flight in January 1970 to the last plane leaving the factory in January
2023, Boeing manufactured 1,574 of the 747 aircraft. With 93 aircraft delivered in 1970, the year
in which the most 747s were delivered, to 30 aircraft over the last 5 years before production ended,
the life cycle of the 747 has been long and successful for the most part.
The history of the 747 perfectly illustrates the life cycle of a product the way Heizer, Render, &
Munson (2017) present it: Introduction, growth, maturity, and decline. Boeing´s operations
managers implemented strategies that changed this product, extending its life cycle past any of its
predecessors, not only by customizing the aircraft for the different airlines but by also selling it for
different functions such as the Space Shuttle Carrier Aircraft, managing to come up with different
variations of this model. In the passenger functionality, the variants included “the 747-100, the
special performance 747SP, the 747-200, the 747-300, the -400, and the 747-8 Intercontinental, or
8i.” (Rains, 2023).
Findings & Recommendations
Even when the life cycle of the Boeing 747 is coming to an end, the company has introduced new
products in recent years such as the 737 Max, the 777, and the 787. From their Second Quarter
2023 Report, about 81% of the Commercial Airplanes deliveries were from the 737 aircraft, less
than 5% from the 777, and about 12% from the 787.
However, these aircraft’s life cycle varies. In the case of the 737, it can be said the aircraft was in
a decline phase before the MAX variation was launched. Since this model was introduced and
orders were placed and fulfilled, the maturity phase was reached but due to mechanical matters
raised, it moved back to the growth phase.
The 777 and 787 show a cleared life cycle at the moment. The 777 is in a Maturity Phase while
the 787 fits in a Growth Phase. However, the 737 MAX has about 8 times more orders than other
Boeing Airlines aircraft. Despite having a design less technologically modern and updated than
the newer aircraft, considering its capacities, the 737 is the best option available now since its
production is faster compared to the Dreamliner (787), despite this one having superior
technologies.
The main disadvantage of the 747 is that it was made for the long haul using the Hub and Spoke
model in contrast to the Dreamliner which can fly direct to point destinations without the need to
make a connection, resulting in a more economical solution from an operations management point
of view and a more convenient and efficient way to travel for the airline's costumers since the
direct to destination tendency is more frequent now.
Even when in the past Boeing was able to beat its main competitor, Airbus, with the 747 vs the
A380. This was mainly due to regulations established at the time, when Boeing launched the 747,
it was not possible to fly two-engine aircraft through long distances which increased the success
of the 747 with its four engines. These regulations however had been modified by the time the
A380 launched, this made the additional two engines unnecessary which resulted in airlines
prioritizing the purchase of newer models with two engines.
At the same time, Boeing´s inability to maintain the 89% increase in 2017´s stock, likely related
to incidents happening with the 737 MAX and the COVID-19 Pandemic (Samaha, 2018) has
probably pushed the 747 to decline.
Over the past five years, looking into the company´s quarterly reports, in the first quarter of 2019,
the company had a revenue of $22,917 million while in the first quarter of 2023, this revenue
dropped to $17,921 million, about a 21% decrease. It is also possible for Boeing to fall behind its
competitors since many companies in the industry are currently attempting to implement
Autonomous Flight. One of these companies is Boeing´s competitor, Airbus.
The 747 has certainly reached a Decline Phase since its once revolutionary technology is now
considered outdated, lacking equipment that its competitors have implemented such as the capacity
to fly by wired like the Airbus 320 series. Despite Airbus A380´s failure in competing with the
747, with a project named “Dragonfly”, Airbus seems to be entering an Introductory Phase by
conducting research of new autonomous technologies, “testing out the new features using an A3501000 aircraft at the Toulouse-Blagnac Airport. This program seeks to validate taxi, takeoff, landing,
and even fully automated diversions”, ultimately resulting in the fabrication of an aircraft that will
respond to external conditions without the assistance of an inboard pilot (SPA MEC, 2023).
If successful, an autonomous aircraft would be very challenging to beat since the operational cost
would be significantly lower giving airlines a higher budget to invest, increasing the sales of said
aircraft.
Works Cited
Boeing. (2023, October 10). Boeing General Information. Retrieved from Boeing:
https://www.boeing.com/company/general-info/
Heizer, J., Render, B., & Munson, C. (2017). Operations Management. Pearson.
Isidore, C. (2022, December 7). The very last 747 jumbo jet just rolled off Boeing’s assembly
line. Retrieved from CNN: https://www.cnn.com/2022/12/06/business/last-boeing747/index.html
Rains, T. (2023, September 27). See inside Korean Air's Boeing 747, one of the last examples of
the famous jet still flying passengers around the globe. Retrieved from Insider:
https://www.insider.com/see-inside-boeing-747-jet-korean-air-2023-9
Ros, M. (2023, January 31). Boeing says farewell to ‘Queen of the Skies’ with last 747 delivery.
Retrieved from CNN travel: https://www.cnn.com/travel/article/last-boeing-747-leaveseverett-washington/index.html
Samaha, L. (2018, January 13). Why The Boeing Company Stock Soared in 2017. Retrieved from
The Motley Fool: https://www.fool.com/investing/2018/01/13/why-the-boeing-companystock-soared-in-2017.aspx
SPA MEC. (2023). Autonomous Flight Part I: Will We See Autonomous Flight Before the End of
Our Careers. Fort Lauderdale: SPA.
Spencer, C. (Director). (2014). 747: The Jumbo Revolution [Motion Picture].