A320neo EIS 2016-17

Airbus has confirmed to us the planned EIS of the A320neo family. The company initially announced only that the A320neo would enter service in the Spring of 2016. A spokesman confirmed our estimates of the family’s EIS:

A320 EIS: Spring 2016

A321 EIS: 4Q2016

A319 EIS: Spring 2017

A320neo with P&W Geared Turbo Fan engines. Airbus rendering.

A320neo with CFM LEAP-X engines. The LEAP-X is slightly shorter and has a slight smaller diameter than the GTF. Airbus rendering.

Airbus’ John Leahy, COO-Customers, told FlightGlobal today that the launch of the NEO kills the business case for Bombardier’s CSeries. We don’t agree. We believe the CS300 will have a significant advantage over the A319neo and the CS100 is superior to the A318.

As for NEO compared with the Boeing 737, Boeing previously suggested there is only a 3%-4% operating cost difference between NEO and the 737NG. We also disagree. We believe the A319neo has a significant advantage over the 737-700W and the A320neo is marginally better than the 737-800W.

We’ll have more to say about this next week.

17 comments on “A320neo EIS 2016-17

  1. Of course, the A321 has an EIS of 4Q2016.
    Agree! the CS300 will be superior to the A319NEO, as the CS300 OEW is far below the A319. The A318 without having the new engines is too heavy and far worse in engine SFC – there will be worlds between them!

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  3. As I mentioned earlier this week, I do not believe that there is a strong reason for either Boeing or Airbus to re-engine their respective narrow body airplanes, while they have backlogs for the next 4 to 5 years, even when they are increasing their production rates on both models to record levels.
    Airbus has now apparently decided to move ahead with the A320 series NEO models and that move may well force Airbus to spend even more money, wasting the NEO investment in about 10 years, when Boeing will come out with an all-new 737 airplane, which will obsolete the A320NEO models.

    • I don’t think so. They need to sell 10% of their annual production capacity (50 units) for ten years at the predicted USD6m mark-up to make USD3bn on the programme, which they think they can do for USD1.3bn at current exchange rates. Simplistic financial analysis, I know, but that should be eminently achievable, and the outcome does not change if we make the analysis more complicated. So I can’t see how the introduction of an all-new, all singing and dancing 737 successor in 10 years will lead to the investment being wasted, given that it will be recovered in about 5 years.

      Ps. Obsolete is not a verb. The all new 737 may make the A320 NEO range obsolete, or drive them into obsolescence.

    • IMHO Boeing will not be able to repeat the “uberperformance”
      marketing coup they managed on the Dreamliner.
      Actually I think they will have to “sing long and clear” for
      their completely new product to gain customers.

      Available wisdom seems to indicate that now and in the visible
      future gains from materials for the airframe, especially for NB craft
      is marginal.

      Nearly all gains are leveraged from engine tech.
      The NEO step will hand experience and a path to further improvements to
      Airbus for two lines of engines.
      Tightly following the NEO EIS with a Boeing brand new NB will not provide
      for possible step improvements that a new would need for adequately recouping
      the initial investment.

  4. Errr… If they manage to do it for USD 1.5 billion, all they need to do is sell 50 NEOs a year for 10 years to recoup that and make a decent return (that would bring in USD 300 million assuming they manage to charge USD 6m extra per plane) for a total of USD 3bn in return. It appears to be a no-brainer.

  5. Another note on Boeing’s time scales to react. They have their engineers busy for another year at least with the 787 (I am being generous here) and 748. Then they will launch the 777NG, which will eat up a lot of engineering resources for 3-5 years? Getting an all new plane out (in reality, not in the Board presentation that gets the plane launched) seems to take 7-8 years now. Given this, I think 10 years for the arrival of a 737 successor incorporating all the technologies that will achieve a double-digit advantage over the A320NEO is a highly questionable assumption, in my view. 12 to 15 seems more likely for the plane to achieve EIS.

  6. Airbus is spending only 1.3bn$ for the NEO that will bring 15% sfc reduction from the engines plus another 3.5% from the sharklets!!!

    Boeing can not mach these efficiencies even if it spent 3 times as much $$$!
    With minimal investment Airbus renders the 737NG uncompetitive and is therefore able to launch an all new airframe at any pint in time that Boeing manages to launch a 737 replacement frame.

  7. Unfortunately for Boeing, they have found out the hard way that you cannot afford to decimate your core asset, which is a strong engineering team.
    Airbus have not made this error, perhaps because they lack the huge core of highly qualified but hugely lacking and inexperienced team of “paper” experts, they appear to make less foul ups ( A380 not withstanding).
    Its a struggle these days to come up with half a dozen eminent engineers at Boeing, a far cry from the golden years of their successes.
    Unfortunately aeronautical progress still needs engineering excellence rather than innovative management techniques, which in their own right still requires people who understand aircraft, and how to build them.

  8. The big question for Big B is do I go with new engines or a new plane and if I go with a new plane will it be that much better than current re-engined ones? What to Do?

    Then the other problem is will engine development progress over the next 5 to 10 years that may affect a new design in a negative manner? What to Do?

  9. Jay raised a valid point. The question is if Boeing launch a new development, what engine are they going to put on it? Any different to GTF or LEAP-X? So, Boeing’s strategy was to drag this ‘we are thinking about it’ line for as long as possible, so that they can concentrate on their biggest money maker – 777. They did everything to talk this down… ‘our customers are telling us they don’t want a re-engine’, ‘if Airbus re-engine, the delta between 737NG and NEO will be 3-4%’ and so on. But Airbus didn’t bite. For Airbus it is a good move. Cheap development, relatively speaking of course. I also bet P&W will contribute, since NEO represents the biggest opportunity for them to be back in the game as a major player.
    The reason why Boeing can’t close the business case is the amount of structural changes required and hence the cost, will not be comparable with NEO. I am looking forward to seeing how they will react.

  10. In the late 1970s, Boeing was facing the same dilemma it is facing today, with regard to reengineering the 737, because Lufthansa German airlines insisted on having the CFM—56 engine installed on the 737, before committing to a fleet renewal of all of their 28 737–100/200s.
    In the end, it was agreed by both parties, that the modification would not be “cost-effective,” because the fan diameter of the CFM-56 engine required major structural changes to the wing and landing gear of the 737, to provide adequate ground clearance for the engine.
    It was not until after Lufthansa committed to a new fleet of 32+24 option 737–200ADV aircraft in
    1979, before SNECMA in desperation agreed to find a home for their engine, by reducing the fan diameter of the CFM-56 engine, to allow its installation underneath the existing 737 wing and the rest is history!
    I seriously doubt, that either of today’s two new-generation engine manufacturers are in a position to accommodate the Boeing 737 requirement, as CFM did 30 years ago, nor do they have the incentive.
    Airbus will, however, not be able to handle the overwhelming demand for aircraft in the 737A320 categories anyway, even if they substitute new models for existing A320 type orders by 2016, at the earliest!

    I am of the opinion, therefore, that Boeing will have no choice but to concentrate on protecting their 777 market against the A350 program first, before producing an all-new 737 in about 10 years time, financed by the imminently successful and profitable 737 program, for many years to come.

    • Rudy

      Do I understand you correctly? Airbus will not be able to meet the demand alone for single aisles and hence Boeing will still pick up enough sales to keep them going until they can do a replacement in about 10 years time?

      You could be right but I wonder, if Boeing does nothing in the near future, how many airlines might split their narriw body orders between A320/A321 NEOs and C-Series?

      • My assumption was that the availability horizont is a decisive element in purchases for some time already.

        And Airbus trying to marginalise Boeing any further would have ( and will be) met with massive interventions from the US political side.

  11. As a member of the team that did some of the initial studies on re-engineing the 737, I don’t think an engine update will do the trick on that old bird. I also don’t think Big B could recoup their investment, but I could be wrong.

    If all that I have read is correct, I think the Short Hauls want a better flying and way more fuel efficient aircraft, not just a re-do.

  12. Yes, I do believe that the demand for new and replacement aircraft in the 737/A320 categories will be so huge during the next five years, that Airbus+the C-Series cannot possibly cope with it.
    Furthermore, apart from the major changes required on the 737, to accommodate the larger fan of the NEO, Boeing has enough on its plate in the next five years, getting the 787 and 747–8 into service, as well as protecting these two programs and the 777, from the A350/A380 challenges!
    Once Boeing has overcome these very serious challenges successfully and I hope they will, even though there is no clear path visible at the moment, than by the middle of the coming decade, Boeing can and must launch an all-new 737, which I believe will force Airbus to match them with an all new A320!
    in the meantime, the 737 money tree, while going to a 40 a month production rate, will have to carry BCA financially, which in my opinion, will be the biggest challenge the company will be facing since it launched the 707 in 1956.

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