Odds and Ends: CSeries, 787, A320neo v 737 MAX, First vs Business; Southwest Air

CSeries Powers On, Compresses Schedule: Bombardier is racing toward its first flight. The company powered on the CS100 Flight Test Vehicle 1 yesterday and Jon Ostrower had this article about BBD compressing the schedule to stay on track for launching the CS300. Static testing of the wing has been completed.

Next phase for 787: With yesterday’s successful test flight of the 787, Boeing is ready to move on to the final series of tests to return the aircraft to service. The Wall Street Journal reports that the new battery containment system will be tested once again by pushing the battery to destruction. Boeing hopes to get the airplanes back in the air by May 1.

The National Transportation Safety Board will hold public hearings April 21-22.

A320neo vs 737 MAX: Following the recent round of orders, Airbus now has a 65% market share for its neo vs Boeing’s 35% share for the MAX.

First vs Business: Here’s a piece we did for CNN International on the merits of First vs Business Class.

Herb and Lamar would roll over: Southwest Airlines finally acknowledged what we’ve been whinging on about for years: it’s not the airline of Herb Kelleher of Lamar Muse any more. We’ve written many times that this “legacy LCC” drifted away from its low cost model, its focus on simplicity and its point-to-point strategy in a series of steps. It took the mainstream media a long time to catch up to what we wrote so long ago.

44 comments on “Odds and Ends: CSeries, 787, A320neo v 737 MAX, First vs Business; Southwest Air

  1. I can see a dozen large A320 operators that haven’t ordered NEO’s yet. Waiting for a Boeing reaction other then denial..

  2. @Keesje…denial of what? Orders speak for themselves. Since Boeing launched the B737MAX, orders between the two have been running “neck-on-neck”.

    • You keep saying it, but I don’t think that’s correct, or in any case, if it were, it would be meaningless.So even if it were correct it would give Airbus a pretty permanent (but diminishing) market share advantage because they launched earlier. At present Airbus has sold 1.85 NEOs for every MAX Boeing has sold. I think that speaks for itself, and anything about order flow is whistling past the graveyard. Boeing better cross their fingers that the LEAP on the MAX comes in much better than expected, otherwise they have a problem. Slot availability did not rescue the A340-600.

      • Nope, but it sure as hell has helped the A330-300 which was disregarded just a few years ago, now it’s the A330-200 that is getting the cold shoulder.

  3. The NEO was launched more than a year before the MAX was. Eliminate that 1000+ orders from the equation and you have both running at about ‘neck and neck’ at roughly 1000+ orders for each type.

      • But in fact, why not eliminate 1,500 orders from the NEO column, and then the MAX is in the lead? I mean if we are making up numbers, why stop at a situation of parity? :p

      • [quote]But the 1,000 orders are still there.[/quote]
        But if you really, really wish them away they are neck and neck!

    • According to your logic A350 is selling far better than B787.

      Within the last 5 years Airbus sold about 140 A350 while Boeing sold -20 B787. Did I miss something? Size and price tag are quite different.

      • Funny, that’s the same logic Leahy uses. Odd that the fanbo… cheerleaders crap on it when a Boeing fan uses it.

    • Hopefully this doesn’t contravene this blog’s comments policy. KCtop[edited], while I know it’s usually your style to get numbers and dates wrong(especially in regards to Airbus), I’ll have to correct you that the MAX wasn’t launched “more than a year” after the NEO, it was probably about 10months actually

  4. I looked at the 737MAX order list on the link above and compared it to the NEO order list.
    QF, AA, Turkish and Lionair spring out as switchers.

    E.g. BA, AF, Easyjet, IB, AZ, Delta, China Eastern, China Southern, Air China have yet to order. Jetblue, TAM placed relatively small orders. I honestly can’t see them going after the MAX.

    The percentage of A321s in NEO orders is rising. The A320 column is in reality A320+undecided. So many additional A321s are likely in there. I think the 737-9 MAX has difficulty to compete there.

    Airbus is working its supply chain to boost production. The writing seems on the wall and I know Boeing analyst look even better. On the other hand I have seen public statements by senior Boeing executives during the last few years, indicating they ignore the wall.

    http://www.boeingblogs.com/randy/archives/2011/11/the_sweet_spot_1.html

    • Will he be nicknamed Comical Randy or Seattle Bob in the future ?
      “Leahy and a troupe of Airbusiers will commit mass suicide at Le Bourget”

  5. I really do not understand this nitpicking about who is selling more and when. Are they all going to be delivered and what will the market share be? Those seem to be the important issues.

    It would be nice to have more details about the ground battery destruction test but it would be more comforting to know if they do perform such a test.
    Many are calling for a flight test where a battery is tested to destruction and I am wondering why. The only purpose I could see for such a test is to see how the skin valve reacts (does it really work at altitude as it is supposed to, a test which could be run in a pressurised container) and what would happen when the red hot bits come shooting out of the aircraft. Would they immediately be whipped away from the aircraft or would they be sucked in against the skin? I imagine they wouldn’t be around the aircraft long enough to do any damage but has this been analysed or addressed?

  6. “Many are calling for a flight test where a battery is tested to destruction and I am wondering why.”

    Because
    - the root cause isn’t identified, so the chances of another thermal runaway remain unclear.
    - the solution is based on containing a thermal runaway. So that containment has to be verified under the most realistic conditions.

    Similarity analyses, simulated tests and certification on this component failed in the previous round. Better demonstrate this a perfectly safe solution under unsimulated conditions this time, next to the usual tests.

  7. KC135TopBoom has it correct regarding what I meant by “neck-on-neck”.

    Of course one cannot simply remove the previous A32XNEO orders. My point was about total orders between the two since the introduction of the B737MAX.

    @MHalblaub..what does the B787 and A350 have anything to do with the debate? Also, AFAIK, selling prices for the B73X and A32X are not too far apart-unlike for widebodies.

    While keesje/ states that Airbus is increasing supply chain, they can only produce so many frames per given month. This is where Boeing has an excellent opportunity to gain a lot of orders.

    Also, just as we didn’t know EK would order 90+ A380′s, we don’t know about other carriers (both known & unknown) potentially making large orders.

    Finally, we’ll see how many carriers take their orders and/or options.

    In the end, I expect to see a “smoothing out” of the orders between the two.

    • Neck-on-neck has limited scope of interpretation. ( and imho you do leave that realm here )

      The unbalanced orders in view of a matching potential production boost from Boeing is the noteworthy thing here. ( What do the pundits think about the smoothness of Boeings transition to building MAX?)
      If you look at pdxlights graphic that “smoothing out” looks about finished. for the rest of the decade.
      Will certainly be interesting to look at the 2013 end of year lineup on both sides.

    • [i]what does [...] have anything to do with the debate?[/i]
      I would say nothing just like the time difference between launch dates. I guess airlines which didn’t bother about B737 ordered NEO early. Boeing customers ordered the MAX. Therefore I doubt any big change in orders with a MAX launched one year earlier. More interesting are buyers switching from one aircraft to the other.

      • Boeing has been able to “land” (no pun intended) a major Airbus operator to ordering the MAX…Asian-based carrier IIRC. I wouldn’t be surprised to see more of this happening.

        Again, these orders will IMHO “even-out” over a period of a few years…

      • jacobin777 :
        Boeing has been able to “land” (no pun intended) a major Airbus operator to ordering the MAX…Asian-based carrier IIRC. I wouldn’t be surprised to see more of this happening.

        The thing is that so far, this has mostly been happening the other way – that Asian carrier you mentioned (Silkair, who ordered 31 MAX) is so far the single customer that switched from A320Ceo to 737MAX.
        I’m not saying that we won’t see additional defections from CEO to MAX, but the overwhelming trend appears to be that NEO allowed Airbus to snatch a good few NG customers, not the other way round.

  8. Southwest not the airline of Herb Kelleher of Lamar Muse any more

    The bland leading the bland if the ad is anything to go by. Whatever the faults of Herb Kelleher and Michael OLeary etc, they do make life more interesting

  9. From the John Ostrower article:

    - “We’re at a critical phase right now,” said Guy Hachey, president of Bombardier Aerospace, at the company’s recent conference in New York. “So far, it’s good. I just am going to feel better in six weeks, eight weeks from now.”

    That sounds like the end of May for first flight. Or am I imagining things?

    - The Canadian company plans to build five test aircraft for its single-aisle 110-seat CSeries CS100 jet, the first of which was unveiled on March 7. It then plans to make only one production aircraft before building two test aircraft for the 135-seat CS300.

    - Bombardier’s move is unusual for commercial aerospace companies–especially on an all new-jetliner–which typically take additional time to improve repetitive production before introducing a new model.

    The CS100 and CS300 can be viewed as basically the same aircraft. When the CS300 was stretched to accommodate the new high-density requirement the CS100 was immediately impacted, and hence the delay that ensued.

    Most of the testing done on the CS100 can be transferred to the CS300, so great is the communality. Five flight test vehicles will be required to certify the CS100, whereas only two will do the job for the CS300.

    Since manufacturing and testing have gone extremely well so far, Bombardier is confident enough to go into production straightaway with the larger model.

    http://online.wsj.com/article/SB10001424127887324105204578382990561862134.html?mod=googlenews_wsj

  10. Andreas :
    Boeing better cross their fingers that the LEAP on the MAX comes in much better than expected, otherwise they have a problem.

    If I was Boeing I would secretly, and urgently, bring the NSA back on the front burner. The GTF is unstoppable and Boeing should come to term with that reality.

    I don’t mean to offend any Boeing unconditional partisan, but there is a real possibility that the 737 could become a looser in a not so distant future.

    Boeing (BCA) has four aircraft in its portfolio:

    1- The 777, which is doing extremely well right now. But for how long?
    2- The 737, which is the bread and butter of the company. But its future revolves around a compromised engine designed for an obsolete airframe.
    3- The 787, which sold many but might never become the cash cow it was designed to be.
    4- The 747, which is not going anywhere.

    Worst case scenario:

    First, the Dreamliner is grounded a second time after new problems are discovered, or old ones resurface. Some time after that the MAX enters service but lags the A320 and CSeries in terms of fuel burn and CASM. In the meantime key customers get impatient with Boeing over the 777X and defect to Airbus. Boeing starts to run out of cash and stops 747 production permanently. BCA relies on the military devision, but the KC-46 has a negative cash flow for a longer period than expected. Boeing turns to other military programmes, but DND is still not in the mood for spending. Boeing now turns to its Space division and says “Houston, we have a problem!”.

    Do you get the picture?

    • Ah, yea… it’s total doom and gloom for Boeing. Why, I bet you think they should just curl up and die right now and hand your glorious Airbus everything… SPQT All Hail, Bregier… Emperor of Toulouse. You fanbo… cheerleaders are funny. Detached from reality, but funny none the less. Do you even have skin in the commercial airline game, or just another armchair CEO?

      • Armchair CEO is your answer. But please keep in mind that I took the precaution of saying “I don’t mean to offend any Boeing unconditional partisan”. It was an honest statement and still stands.

        The scenario I devised is a worst case scenario, as I have specified. It is pure science-fiction and was used to dramatized what I perceive as an untenable situation, in order to provoke a healthy discussion, because I an worried for the long term viability of Boeing if something doesn’t change rapidly.

        By the way I am not an unconditional partisan of Airbus, or any other manufacturer for that matter, except maybe for the old Boeing.

        It is not total doom and gloom for BCA. Far from that. Yet I consider the present situation as critical because the aircraft portfolio carries a considerable amount of risk in each model.

        Boeing has everything it takes to get out of what I consider a delicate situation, to put it mildly.

  11. Someone could even see a bigger backlog of aircraft from a program which development is not finished as a *liability* (no less than 3 current commercial programs come to mind, each from a different OEM)… From that point of view, one could even see 737MAX position not just as “neck-on-neck” but advantageous… :-)

  12. You paint a very bleak scenario Normand.
    I think the damage may well be done with MAX, as if the current order gap remains at present levels, they will never exceed a 40% market share, and that would impact cash flow.
    Hopefully it wont all come to pass, but would not be surprised if 787 were forced into a major re-work of the batteries.
    I believe they have a little time up their sleeves on 777X.

    • Yes it’s a bleak scenario, but not one in which I believe. Although theoretically it could happen the way I describe it. But the life of the Universe is not expected to be long enough to see it happen. It’s only a working hypothesis used to stimulate our collective neurones.

      Wiki definition of a working hypothesis:

      A working hypothesis is a hypothesis that is provisionally accepted as a basis for further research in the hope that a tenable theory will be produced, even if the hypothesis ultimately fails. Like all hypotheses, a working hypothesis is constructed as a statement of expectations, which can be linked to the exploratory research purpose in empirical investigation and is often used as a conceptual framework in qualitative research.

  13. From my point of view, and you are right Normand, the big mistake is the incredible bad strategic call for the 737. After forty years, how to let go a beautiful icon for and to History ?

  14. Howard :
    Nope, but it sure as hell has helped the A330-300 which was disregarded just a few years ago, now it’s the A330-200 that is getting the cold shoulder.

    But that’s in the context of the delays, otherwise the A330 would be dead as dodo now. If both MAX and NEO are on time, the comparison won’t apply. The 787/A350 Mk. I comparison would be more apt. I don’t see how Boeing could accept a 65/35 market split against them, given how dependent they are on the 737 for their margins. It would pretty much force them to do a new narrowbody much sooner than planned in my view. Which is something they can do, and have the means to do, so it’ll be a costly nuisance, nothing else.

  15. Comparing the NEO and MAX orders is difficult… the NEO was on sale before the MAX so a comparison solely on number sold would favor the NEO (a little). When the MAX came along, the NEO had a lot less slots available so the MAX could benefit from that, hence looking at order since both became available (skip the MAX “launch date”, I think pdxlight’s angle is more justified) is also biased, this time towards the MAX.

    I think we’ll just have to lean back and wait until the orders start to come in at a pace suggesting the initial factors has stopped playing a role, and then look at market share. (Or we could include CEO and NG as well, and then compare market share).

  16. Small addition regarding C-Series: the static tests performed are sufficient for first flight clearance, not for final certicification. BBD still has to perform ultimate load test of the wing.

  17. Many thought the Max would catch on. It didn’t happen, NEO is 1000 ahead of the MAX and the quality of the orders seems better. More customer, less lessors, more flag carriers, larger variants, fewer reported deep discounts, switchers

    Airbus said they were able to keep up prices on the NEO while MAX price levels leaked on SW and AA suggest Boeing was securing marketshare initially, with an aircraft they hoped to replace.

    NEO slots this decade quickly became sparse after 2011, helping the MAX.

    The 737 is an aviation icon, offering excellent reliability in combination with the CFM56s, forming the backbone of networks all over the world. It now seems it’s low above the ground design strategy has met its Waterloo in structurally higher fuel prices.

    The NEO seems to have two better engine options on offer. Add extra cabin options, cargo capability, payload-range and CSeries growth potential and I think the 737 MAX might have a shorter live span then hoped for. NSA 2024?

  18. Its very difficult to compare Neo v Max sales without taking slots and production into context as well. In terms of slot availability down the line they’re probably not dissimilar – proposed production rates are about the same, and Airbus will have produced a large chunk of that 1000 difference in the 2years lead that it has. It’ll be the orders from now on that will give a truer picture.

    Having said that, I think Airbus are in the driving seat here. They have less developments costs to recoup and so will be profitable sooner, combined with a larger order book If Boeing do admit defeat with the Max and respond with the NSA Airbus will have the luxury of a bigger cash pile to develop their response

  19. I was too late on an earlier thread to discuss the A360, but here may be a good place. As some have mentioned the biggest gap in size offerings for both A and B is in the lower middle range. There is no new offering by A or B of a plane between ~82t (A321new) and ~220t (787-8). The gap for A is even bigger than B – 160t+ between the 321 and A350, and even more if the -800 doesn’t fade away.

    So the next niche may be a new smaller mid-size (NS-MA?) aircraft in the 757/767/A300 size range of 200K-400K MGW. Neither the 737 or A321 can grow into this range. It could be a larger 6 abreast single aisle (aka 757), a 7 abreast (a 767, with LD-3 capability), or possibly a small 8 abreast twin aisle (A300). Perhaps a 175-225 seat version with 5K-6K mile range and a 200-250 seat version with 4K range.

    For A it would pressure the 787 on the low end. This plane would cannibalize the neo/Max but if the Max sales lag far behind the neo then it would do more harm to the 321 than the 737 if B built it. The C-series will be pushing the neo/Max from the lower end. It is possible that the neo/Max are just short term improvements until an all new plane of this size is introduced in mid 202n time frame.

  20. GT62 :
    It is possible that the neo/Max are just short term improvements until an all new plane of this size is introduced in mid 202n time frame.

    The way I see it the neo could last a little longer than the Max because the GTF engine seems to have more development potential. And the A320 airframe is slightly more comfortable because of the wider (newer) fuselage.

    That being said, it is the evolution over time of the respective market shares that will dictate the manufacturers what to do. The problem for Boeing is that it’s no longer competing solely with Airbus.

    If the CSeries CS100/300 were to quickly become successful and Bombardier decided to proceed immediately with the CS500, it would force Boeing to accelerate the replacement of the old 737 platform with a modern airframe, à la 787. Airbus would eventually have to follow suit, but probably at a later time.

    Hopefully this scenario wont develop too quickly, for Boeing also has other important (and expensive) programmes to launch in the near future (787-10/777X).

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