Boeing yesterday announced a 2017 entry-into-service date for the 737 MAX, perhaps as much as two years after the advertised October 2015 EIS for the Airbus A320neo, but officials have challenged the development team to accelerate this time line.
We earlier reported that Boeing wanted an EIS of 2016/17, but in the press conference Tuesday, Jim Albaugh, CEO of Boeing Commercial Airplanes talked only of 2017. After the formal event, Nicole Piasecki, VP of Business Development and Strategic Integration, told a small group of reporters that Boeing wants to advance that date.
“Jim wants to under-promise and over-deliver, so he is challenging the team to bring the airplane to market as soon as possible,” she said. “Given our recent track record, we’re being very conservative—not conservative, we’re being very prudent, I should say—and disciplined to make sure that whatever we talk to our customers about, we actually have a plan to deliver on. I think you’ll see improvements on the 2017, but again our team is very disciplined and we’re going to make sure we have a plan before we make a commitment.”
Boeing announced the name of its new 737 re-engined aircraft and like Airbus for the A350 XWB, there is now and X-Factor with Boeing: the 737 MAX-7/8/9.
Precise details on the MAX remain uncertain; Jim Albaugh, CEO of Boeing Commercial Airplanes, said engineering is still deciding whether to go for a 66-inch or 68-inch fan diameter for the CFM LEAP-1B. Although Albaugh said it is believe the larger fan still will not require a longer nose gear, with a ripple-effect of changes to the fuselage, he added that there is a contingency determined if a longer gear proves necessary with the larger fan.
Albaugh said final design configuration is still some weeks away.
Boeing made it official this morning: launch of the 737NE (New Engine) has been approved, bypassing the Authority to Offer.
Boeing said it has commitments for 496 NEs from five airlines. Only American Airlines has been announced, for 100. We expect Southwest Airlines to be another. Delta Air Lines’ order for 100 737-900ERs did not include conversion rights.
Boeing claims the 737NE will be 7% more efficient operating costs than the A320neo, but in its announcement today did not detail how. Boeing also says the 737NE will have 16% lower fuel burn than today’s A320 and 4% lower than the neo.
Update, 930am: The Daily Express of L0ndon (of all places) reported yesterday BCA got the approval Friday for the 737RE and that the announcement is to come today. Thanks to Heidi Wood of Morgan Stanley for this one.
Approval for Authority to Offer the 737 re-engine is expected to come from the Boeing Board of Directors today, according to sources.
Last Friday we published our story reporting this in Commercial Aviation Online in London and, per our arrangement with CAO, the following day on this site.
Bloomberg News published this story later on Friday also confirming ATO was expected.
Official launch of the airplane isn’t expected until fall, likely after the October Board meeting, predicts Credit Suisse.
Full design definition of the 737RE isn’t expected until next month, we are told. While it is widely expected that the CFM LEAP engine will have a 66-inch fan in order to avoid any changes to the landing gear that would complicate the work statement, as of today this isn’t definitively settled. A 68 inch fan is still a possibility, though it’s considered more remote.
Delta Air Lines’ order for 100 Boeing 737-900ERs is a major boost to this model, but does nothing to add to the 737 re-engine programme.
The airline’s original request for proposals, issued early this year, came well before Boeing decided to go forward with the 737 re-engine and accordingly, the airplane was not included in any proposal from Boeing to Delta or in any analysis after American Airlines placed the launch order in July.
While there had been some expectation among Wall Street analysts that Delta would at the least have conversion rights in the contract to allow some deliveries in the 2017-2018 period of the 737 re-engine, CAO has confirmed with two sources that there is no provision. Delta would be taking too few airplanes in this period to be allocated valuable launch customer/launch operator delivery slots, according to one person familiar with the situation. Although American provisionally ordered 100 737REs, it does not want to be the launch operator and has slated first deliveries in 2018.
Thoughts on the departure of Gary Scott as CEO of Bombardier’s aircraft division and leader of the CSeries effort, with additional thoughts about the decision by Delta Air Lines not to order the CSeries or the Embraer E-195 at this time; and
Boeing completed expansion of a facility at its Renton (WA) 737 plant where it makes wings, where productions rates will climb from 31.5/mo to 35/mo this year and 42/mo in the near future. The company is studying taking rates to as high as 60/mo, as well as where it will assemble the 737RE.
In an internal daily news distribution, Boeing wrote:
The new line is located in Final Assembly just north of the old location, where employees install hydraulics and electrical systems into wings that are built in a different building. Mechanics have about three months to become accustomed to the new line before rates go up.
“It’s the best possible scenario for rate break,” said Ron Karnes, general manager of Seal, Test and Paint and Systems Installation. “Early implementation, a new area and all that time to practice — it’s a very good plan.”
Key to the line’s success are the inputs made by mechanics during six Accelerated Improvement Workshops held over the last year. Workshop participants included people from all parts of the wings value stream and across the shifts.