Part 3: Boeing 757 replacement: 757 and Airbus A321neoLR versus clean sheet designs.

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By Bjorn Fehrm

Part 3 of 3

Introduction

In Part 2 of our three-part 757 Replacement analysis, we took a close look at Airbus’ new 97 tonne take-off weight A321neo, revealed in a world exclusive by Leeham News and Comment October 21. We analyzed the A321neoLR’s capabilities and limitations when compared to Boeing 757-200W and we saw that it could do the international flights that the 757-200 does with about 25% better efficiency. In this final Part 3, we will now compare the 757 and A321neoLR against what can be Boeing’s reaction, a clean sheet New Single Aisle, NSA, or New Light Twin Aisle, (NLT). First the conclusions from Part 2:

  • When using the United Airlines-configured 757-200W international as benchmark, we came within seven seats of the 757 capacity for an A321neoLR. It covered the same range and had trip fuel costs that were 25% lower.
  • The per seat fuel costs gave a 22% higher efficiency, which was within 2% of Airbus own figures.
  • 737 MAX9 is not suitable for stretch to an international version, not because the wing is not good enough but because the MAX9 cannot bring the wing to an angle at take-off where it can work efficiently; the landing gear is too short.

Summary
For Part 3 we can summarize:

  • A New Single Aisle (NSA) or New Light Twin (NLT) which would enter the market in 2025 would be sized at around 200 passengers with subsequent variants covering the 175-225 seat market, all numbers with OEM standard two-class seating. Figure 1 shows the fuselage cross sections we have used in our modelling of NSA and NLT to cover this market segment.

NSA and NLT cross sections

Figure 1. Fuselage cross sections of our models of NSA and NLT. Source: Leeham Co.

  • In order to cover the market segment of the 737, A320 and 757 it would have a range in excess of 4,100nm. We will use 4100nm for our modeling to maximize the comparative efficiency information.
  • Its efficiency would be higher than an A321neoLR, primarily due to better engines and a more modern wing.
  • The New Light Twin (NLT) wins on comfort and ground turn-around time but pays with a larger fuselage cross section due to the extra aisle. This causes more drag and structural weight, net effect is a reduction in efficiency of around 2.5%.

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Leeham News launches Premium plan, companion to free content; engineer joins staff

Free content.

Leeham News and Comment (LNC) today launched a Premium subscription plan as a companion to free content.

LNC has provided news and commentary since February 2008, providing industry-leading information and insightful analysis, principally focuses on Airbus, Boeing, Bombardier and Embraer but also including emerging challengers to the Big Four OEMs, the leading engine manufacturers, suppliers and airline news.

LNC has been a leading resource of news and comment throughout the commercial aviation industry and its professional followers in the aerospace supply chain, investment analysts and the media.

Since the first of this year, LNC increasingly provided more and more technically-based content. This content is valuable and supplements the industry-leading news and reporting that has been provided since 2008. We are pleased to announce the addition to our staff, Bjorn Fehrm, who focuses on technical evaluation and complements the strategic expertise of Scott Hamilton, the founder of LNC and Leeham Co. consultancy.

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New and Derivative airplanes: Some good, some not; Part 1

First of two parts.

Earlier this year, Airbus officials said they will concentrate on improving existing airplanes once the A350 enters service.

Boeing followed by saying it would not take any “moonshots” and develop new airplanes, at least for some indeterminate time.

The sentiment on the part of both companies is understandable if not disappointing for aviation purists who want to see new and innovative airplane models rather than made-over sub-types.

This is one of those cases where both schools of thought are right. (Text continues below photo.)

Later this month, we will unveil a new, updated Leeham News and Comment with a combination of paid and free content. Watch this space for more information.

Later this month, we will unveil a new, updated Leeham News and Comment with a combination of paid and free content. Watch this space for more information.

New airplanes are, to state the obvious, very expensive to develop and in this increasingly technological age and demand for “smarter” airplanes that are more fuel efficient and which try to improve passenger experience while cramming as many revenue-paying passengers into the airplane as possible, becoming more and more challenging. Where it once was possible to bring an airplane to market within four years of launch, today airframers routinely look at seven years and even eight. Even derivative airplanes are now taking six or seven years to enter service from launch.

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Assessing the wide-body and narrow-body freighters

This column has been updated since distribution to our e-mail recipients Sept. 22.

There is an emerging demand to replace aging small- and medium-size wide-body freighters, but with limited choices to replace them.

Airbus A310Fs and A300Fs are rapidly aging. Used principally by FedEx, UPS and DHL, these aircraft are in a size that is too small for the new-build Boeing 777F and Airbus A330-200F, and for which these airplanes are too costly to provide a good return on investment.

FedEx is replacing many of its aircraft with the new-build Boeing 767-300ERF, but it deferred and reduced its order for the 777F. UPS has no 767s on order from Boeing, having previously fulfilled its backlog.

The package carriers may down-gauge. FedEx contracted to acquire a large number of Boeing 757s for P2F conversion, but many of these have been replacing Boeing 727Fs. DHL is currently evaluating proposals for converting 757s from P2Fs from third-party conversion companies. The 767-300ER is the one airplane most comparable with the A310s and A300s.

FedEx, UPS and DHL may simply retire some of these aging Airbuses rather than replace them.

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Odds and Ends: Russian MC-21 subsidy; C919 assessment; ExIm countdown

Two news items popped up today on emerging aircraft.

MC-21 subsidy: Government subsidies for commercial aircraft development have been a sore point between the US and Europe (i.e., Boeing and Airbus) for decades. Although the US and Europe went through years of international disputes at the World Trade Organization on behalf of Boeing and Airbus, with adverse decisions now under appeal by both sides, and even though Canada and Brazil previously won cases over illegal subsidies to Embraer and Bombardier, nothing has come of the decisions–and nothing has been done about government subsidies by Japan and China to their aerospace industries. No complaints to the WTO have been filed against either country, which are members of the WTO.

This article updates some information about Russian aid to Irkut, which is developing a competitor to the Airbus A320 and Boeing 737 families. The MC-21 and China’s COMAC C919 are directly sized against the best-selling single-aisle airplanes. Russia is not a member of the WTO, so there is no legal basis (that we know of) to file a complaint.

Long-time readers know we disdain the entire WTO process anyway as more political than practical. The WTO has no enforcement powers and sanctions that might be authorized by the WTO against offenders don’t have to be implemented (as in the case of Canada and Brazil) or even applied against the offender’s products–another industry altogether may be sanctioned, a silly and unfair prospect.

C919 assessment: This article provides an assessment of the prospects for the COMAC C919. What’s especially interesting in this article is what we aviation geeks have known all along, and that is China uses Western technology to develop its airplanes (and trains, the article points out). Airbus and Boeing identify China as the next viable competitor in the airliner field, albeit perhaps a generation in the future. But the technology is coming from Airbus, Boeing, Embraer, Bombardier, the engine makers and the supply chain. They are creating their own future competitors.

While China’s industrial espionage contributes to its understanding and acquisition of Western technology, most of it comes from joint ventures between Chinese companies and the Western OEMs and suppliers.

ExIm countdown: The authorization for the US Export-Import Bank expires next month, and Boeing is pulling out all stops to get a recalcitrant Republican Party to agree to extend the life of the bank, reports The Hill, one of the specialty publications that covers the US Congress.

Killing ExIm will put Boeing at a disadvantage to Airbus, which uses and will continue to use European Credit Agencies (ECAs) to support sales of its aircraft. Boeing will have to fall back on its internal Boeing Capital Corp. or attempt to help customers find private financing if ExIm tanks.

After-market support becoming key to winning engine orders

Maintenance and power-by-the-hour parts and support contracts are increasingly becoming the deciding factor in deciding which engines and which airplanes will be ordered—it’s no longer a matter of engine price or even operating costs, customers of Airbus and Boeing tell us.

Ten years ago, 30% of engine selection had power-by-the-hour (PBH) contracts attached to them. Today, 70% are connected, says one lessor that has Airbus and Boeing aircraft in its portfolio, and which has ordered new aircraft from each company.

“We’ve seen a huge move in maintenance contracts,” this lessor says.

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Farnborough Air Show preview

The Farnborough Air Show is just around the corner, and we don’t expect the event to be especially newsworthy.

Here are our expectations for the show:

Airbus
Market expectations are that Airbus will launch the A330neo at the air show, and we know John Leahy, COO of Customers, would like to do so at this event. His bosses, Fabrice Bregier and Tom Enders, have been less than encouraging that this announcement could come at the show.

Although news stories last week indicated Airbus’ board may green light the program in advance of the FAS, it was nonetheless reported that a formal public launch may not be made at the show. So what might happen? An “Authority to Offer,” or ATO, might be how Airbus proceeds. We don’t think there will be firm orders ready to go when the FAS begins July 14—although certainly Airbus could also take Boeing’s 777X approach and announce “commitments” as was done at the Dubai Air Show.

We are skeptical whether there might be any A330 Classic orders announced, as customers await the neo. We certainly expect the usual orders for the A320 Family. We expect A350 orders. We’re doubtful of A380 orders.

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The case for an NSA in 2025 — successor to 737-8 MAX — (continued)

 Editor’s Note: Given the amount of interest in the prospect of replacements for the single-aisle airplanes, including the Boeing 757, our Guest Columnist provided a follow-up think piece.

By James Krebs

With the reengined Boeing 737 MAX and Airbus A320 neo families selling like gangbusters, it may seem premature, before one even flies, to be considering a New Small Airplane (NSA) successor to enter service beginning in 2025. But I’m convinced the NSA will come before conventional wisdom expects. The marketplace will demand them.

A combination of market forces could make a compelling case for a NSA in service in 2025.

–   Continuing high fuel prices

–   Increasing urgency to reduce aviation carbon emissions

–   Availability of technology for 20% fuel savings vs 737-8 max and A320 neo (at same seat number) at acceptable risk

–   Traffic growth calling for more seats for 2025 and beyond.

–   Growing pressure from the airlines later in this decade for cleaner, more economical short haul NSA’s

–   Huge global market potential for NSA families — with their performance improved through the years

–   A short haul market share by 2017-18 (neo’s and MAX in service) very disappointing to Boeing.

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Odds and Ends: LEAP vs GTF; CSeries flight testing; MRJ FAL

LEAP vs GTF: Reuters has a story looking at the intense competition between CFM and Pratt & Whitney for the market dominance of the LEAP vs Geared Turbo Fan engines.

The only airplane where there is competition is on the Airbus A320neo family; CFM is exclusive on the Boeing 737 MAX and COMAC C919 and PW is exclusive on the Bombardier CSeries, Embraer E-Jet E2 and Mitsubishi MRJ. PW shares the platform of the Irkut MC-21 with a Russian engine. PW says it has sold more than 5,000 GTFs across the platforms. CFM has sold more than 6,000 across the three models it powers.

On the A320neo family, the competition is 50-50 at this point, with a large number of customers yet to decide on an engine choice. However, 60 A320neos (120 engines) ordered by lessor GECAS never were in contested (GECAS buys exclusively from CFM) and 80 A319/320neos from Republic Airways Holdings (160 engines) were part of a financial rescue package for then-ailing Frontier Airlines.

PW’s joint venture partner, International Aero Engines, shares the A320ceo family platform with CFM. Late to the market, IAE caught up to CFM in recent years.

On platforms where they compete, the sales figures so far show a neck-and-neck competition between CFM and PW.

Update, 12:30: The link has been fixed. Update, 9:30 am PST: Flight Global has this story reporting that PW plans a Performance Improvement Package on the GTF that will further cut fuel consumption by 3%.

CSeries flight testing: Bombardier’s CSeries flight testing has been slow to this point, but it’s beginning to ramp up. Aviation Week reports that FTV 3 should be in the air by the end of this month and FTV 4 should follow in April. FTV 3 is the avionics airplane and FTV 4 focuses on GTF engine testing.

Mitsubishi MRJ: Aviation Week also reports that the Mitsubishi MRJ airplane #1 is nearing final assembly.

Odds and Ends: A350 state loan; Bridging 777 Classic sales; Embraer nabs E2 order; IAM chief speaks out

A350 Loan: The Wall Street Journal reports that Airbus and Germany ended talks about a state loan for the A350 program. Good. Airbus doesn’t need the loan and “divorcing” from state aid frees Airbus to make decisions for the production based on commercial considerations and not politically-driven jobs requirements.

Airbus is considering a second A350 production line to open up slots for the -1000 model. Germany made no secret that this line had to be in Hamburg in exchange for the loan. Our Market Intelligence indicates Airbus may want to locate the line outside Germany and perhaps outside Europe. Ridding itself of continue German meddling is a good thing for Airbus; now it “only” has the unions to deal with.

  • In a Guest Column in Aviation Week, Richard Aboulafia continues his A380-bashing, but what he has to say about challenges facing Airbus in the twin-aisle, heart-of-the-market sector bears reading.

Bridging 777s: Jon Ostrower at The Wall Street Journal published this story today about Boeing’s plans to support the 777 Classic sales in advance of the 777X. He reports that Boeing will try to pair 777 Classic orders with the 777X (something we forecast months ago). Boeing is also going to launch a 777 P2F program, persuading airlines to sell their older 777s to cargo carriers and replace them with new 777 Classic orders. This is a challenge because of the continuing softness in the cargo market and plenty of 747-400s available for conversion and 747-400Fs parked in the desert. Such a plan will make it increasingly difficult to support sales of the new-build 747-8F as well.

Although Boeing said it won’t shave the price on the 777 Classic to stimulate sales, we think it will (as it has on the 737 NG).

Embraer nabs E2 customer: Embraer today announced it won an order from an Indian airline for 50 E190 E2s and 50 E195 E2s with options for 50 each. The airline, Air Costa, is a current E1 customer. This is the first E2 order since the launch of the program at the Paris Air Show last June.

Reuters has an article from the Singapore Air Show quoting the Air Costa CEO. The article takes a look at the “small” aircraft market.

IAM chief speaks out: The president of the International Association of Machinists, Tom Buffenbarger, called the Puget Sound Business Journal to talk about the controversial Boeing 777X contract vote.

Why would Buffenbarger do this? He’s facing his first contested election since 1961 and his opponent is from IAM District 751 right here in Seattle. The article makes fascinating reading.

MC-21 profile: A Russian newspaper provides a profile of the Irkut MC-21 (or MS-21 or Yak-242). Talk about confused branding.