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: Boeing Everett; SkyWest raises doubts about MRJ; Boeing and Charleston on 777X

Boeing’s Everett Footprint: With the news that Boeing will build 1.5m sf of space for a new 777X Final Assembly Line and wing production facility if the IAM 751 members ratify the new contract and Washington State ponies up on incentives, the obvious question is: what happens with the current Everett plant?

It had been assumed the 777X would be built in the current facility, integrating with and ultimately replacing the current 777 line; or starting off in the space now occupied by the 747-8, which is struggling to stay alive and which many–ourselves included–believe will die off with the advent of the 777-9.

Let’s consider this latest twist.

  • The 787 Line 1 is assumed to eventually reach a production rate of 7/mo, with Charleston also target for 7/mo, with the goal of the combined lines going to the announced rate of 14/mo by 2018/19.
  • The KC-46A tanker, which occupies half of one bay, goes to two a month in a few years, though it has capacity to go to three. The other half of this bay is currently occupied by the 787 surge line, but in theory this is supposed to go away once Charleston is up to rate 3. Boeing now says this will happen in the first quarter (it was supposed to by year end) but this may not be achieved by then, according to some. But one has to believe Charleston will be ready to rock by 2016, when the 777X is gearing up.
  • The current 777 line, now at 8.3/mo rate, is assumed to have a two year overlap from 777X EIS, or around 2022, when it’s been assumed the current generation 777 would be discontinued. But the 777-200LRF may live on, both in its current form and as a replacement for the KC-10 tanker. Although the USAF is reportedly looking at a 2040 procurement date for the KC-10 replacement, some believe this is too far out into the future and this date will be brought forward.
  • Then there is the 747-8 production space. It’s also assumed this airplane is living on borrowed time. The USAF says it wants to replace the Air Force One fleet in 2021, and this is a long time to keep this line alive. Boeing is counting on the cargo market to return in 2014 to spur demand of the 747-8F, but some believe main-deck freighters of this size will have a very tough time when cheap 747-400 conversions can be had for a fraction of the cost.
  • If space at the primary Everett plant does open up, what is there to fill it if not the 777X? Any number of potentials: the Y-1 737 replacement, closing the Renton factory in the process and splitting the Y-1 between Washington and South Carolina (or Texas, or some off-shore location). A maintenance, repair and overhaul operation: Boeing wants to dramatically increase this service business. Component production.

Over to Readers for your thoughts.

Meanwhile, The Puget Sound Business Journal has this long story on the expected use of robots in building the 777X.

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Production wars coming: Airbus v Boeing

If some industry observers are concerned about the prospect of over-production now, the current state of affairs may only be the tip of the iceberg.

Airbus CEO Fabrice Bergier says he expects to boost production of the A320 and A350 families over the next few years, overtaking Boeing by 2018.

Airbus currently produces the A320 at a rate of 42 per month. The A330 rate is 10/mo and the A380 at 3/mo. Production of the first customer-destined A350 is to begin by the end of this year, with a targeted delivery in the second half of next year. Ramp-up to an initial production target of 10/mo is planned over a four year period, but the wing factory in Broughton, Wales, has a capacity for 13/mo, inferring a greater rate is already planned. Airbus is considering a second A350 production line, largely focused on the A350-1000.

Boeing currently produces the 737 at 38/mo, going to 42/mo next year. The 777 rate is 8.3/mo and the 747-8F/I rate is 1.75/mo. The 767, driven by the USAF tanker, is 1.5/mo. The 787 is ramping up to 10.mo, with a target by year end, but we believe this will be more likely in Q12014.

Boeing has notified the supply chain to consider higher rates for the 737, 767 and 787. We posted the chart below last June, reflecting the higher planning rates.

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Odds and Ends: Lufthansa’s pending widebody order; MRJ v E-Jet E2; MAXimizing space

Lufthansa’s Pending Order: As we have written on previous occasions, Lufthansa Airlines has been preparing a large order for twin-aisle, twin-engine aircraft: 50 or more. We’d noted that the order was likely due in September.

Aviation Week has this update.

Mitsubishi MRJ v Embraer E-Jet E2: Flight Global reports that the Japanese OEM says the latest 15 month delay won’t hurt sales of the MRJ (to which one wag notes it’s not selling well anyway–there are only three customers), but what caught our eye is the Mitsubishi reference comparing the MRJ with the Embraer E-Jet E2. This is like the debate of new vs re-engine between Bombardier’s CSeries and the smallest Airbus and Boeing products.

MAXimizing space: Boeing shifted work around at its Renton (WA) factory as it prepares for production of the 737 MAX. The Seattle Times has a good wrap up.

Odds and Ends: New upgrades for the B-52; MRJ delay confirmed; EIS estimates for new airplane programs

Upgrades for the B-52: The USAF and Boeing are upgrading the Boeing B-52 bomber to further extend the service life. The LA Times via the Seattle Times has this story. This is remarkable; the B-52 was designed in 1948 to be the USA’s aerial backbone against the Soviet Union in the Cold War. It bombed Iraq in the 1991 Gulf War and continues to out-perform the B-1B bomber, which was supposed to replace the old gal, nicknamed by some as BUFF.

More on MRJ Delay: Mitsubishi made it official: the MRJ 90 passenger regional jet will be delayed another year. There are several stories via Google News; this Reuters piece is typical. Aviation Week has a good timeline recap.

Here’s how pending new airplane programs now appear to line up for Entry into Service:

Original Current
CS100        Dec-13        e4Q2014*
MRJ       4Q2013           2Q2017
ARJ21           2006  Good Question
C919           2016           2018–>
A320neo Oct-15 Oct-15
737-8 Jul-17 Jul-17
777X e12-2019**
EJet E2           2018               2018
* One analyst suggests early 2015
** Market Intelligence estimate.

We don’t have enough visibility on the Irkut MS-21 for inclusion in the Table.

Here’s a real oddity: A man in underwear broke into the German Chancellor’s airplane.

American-US Airways: Airchive has this long analysis (and it’s only Part 1 of 2), taking a look at the DOJ complaint. It’s 15 pages even after copy-and-paste into Word and re-sized to 10 point type.

Odds and Ends: Plane Business analysis of AA-US merger; Air Canada’s single-aisle competition

AA-US Merger: Plane Business made available Aug. 21 its previous analysis of the proposed American Airlines-US Airways merger outside its paywall.

The analysis of the government’s analysis is pretty devastating to the government’s case. Read it and judge for yourself.

American’s general counsel, meanwhile, writes (in a report in The Dallas Morning News) that there is no Plan B to exit bankruptcy if the merger with US Airways is successfully blocked by the Department of Justice. Instead, AA would have to create a new bankruptcy-exit plan and return to all creditors and the court. This would take probably another couple of years, making it one of the longest (if not the longest) Chapter 11s in airline history–with all the related uncertainty to those affected by a Chapter 11. This is unfair to creditors and employees, and it will also wipe out any gains shareholders obtained in the current plan.

The DOJ clearly failed to take into account these impacts.

Air Canada eyes CSeries: The Globe and Mail reports that Air Canada is considering the Bombardier CSeries to replace the aging Embraer E-190 and Airbus A319 fleets. We expect the competition to be fierce: Airbus will certainly do what it can to block this sale (through pricing, no doubt) and we wouldn’t be at all surprised if Brazil would offer export financing for a replacement E-Jet fleet–something Bombardier can’t match because of the so-called Home Country rule prohibiting government financing for home-country airlines.

And then there is Boeing. The entire Airbus fleet is getting long in the tooth and our market intelligence tells us Air Canada is running a full narrow-body competition between Airbus and Boeing.

A re-fleeting decision is expected by year-end.

MRJ First Flight Delay: It’s been widely hinted, but now a supplier told Flight International that the first flight of the Mitsubishi MRJ is delayed to the end of 2014.

Odds and Ends: Boeing helps create new competitor; Home for the 777X; CSeries backlog

Mitsubishi MRJ: The Seattle Times has this profile of the Mitsubishi MRJ and Japan’s emerging role in global aerospace.

What particularly struck us was the narration about the benefits Mitsubishi gained from Boeing in designing and building airplanes. The next point is old news: the MRJ will use a metal wing and fuselage, not composite. Mitsubishi said long ago it would forgo a composite wing, and a metal fuselage was never in the cards for this small aircraft.

We recall that during the 2008  IAM 751 strike, Boeing CEO Jim McNerney sent an email to all employees justifying the need to cut costs because of the new competitors. We wrote at the time, Well no kidding: Boeing is helping create these competitors with its outsourcing. Although the MRJ is currently a 70-90 seat aircraft, a 100-seat version is envisioned. If these are a success, we certainly see the day when Mitsubishi will have ambitions for a 150-seat class of aircraft.

Thanks in no small part to The Boeing Co.

Building the 777X–in Everett? The Puget Sound Business Journal has this story trying to read the tea leaves where Boeing will build the successor to the popular 777-300ER.

Then there is this story from Reuters about the prospective launch of the 777X.

CSeries Backlog: Richard Aboulafia likes the design but otherwise has never had much good to say about the Bombardier CSeries. Take a read of this, Rich. (For those who don’t know, we’re good friends with Aboulafia and have a friendly and public debate over the viability of the CSeries future.)

Embraer selects PW GTF for E-Jet RE; concept clarity comes at last

It’s official: Embraer selected the PW GTF to re-engine the E-175, E-190 and E-195.

In doing so, it looks like the E-170 will be allowed to wither on the vine.

This is a huge win for PW and setbacks for Rolls-Royce, which sorely wanted to win the E-Jet RE for its Advance 2 RR development; and for GE, the incumbent supplier of the CF34 and which was developing the Next Generation variant for the E-Jet.

EMB EJet RE

It’s yet another validation for the GTF. Versions of this engine will power the Mitsubishi MRJ, the Bombardier CSeries, the Irkut MS-21, the Airbus A320neo family and now the E-Jet RE.

It’s a huge comeback for PW, which made a major strategic error in not competing to power the Boeing 737 300/400/500. Boeing continues to use the GE/CFM LEAP engine as its sole-source supply for the 737 MAX, though Boeing seriously evaluated the GTF as well.

Below is EMB’s press release:

Embraer Selects Pratt & Whitney’s PurePower Engines for Second Generation of E-Jets

São José dos Campos, January 8, 2013 – Embraer SA (NYSE: ERJ; BM&FBOVESPA: EMBR3) announced today that Pratt & Whitney´s PurePower® Geared TurbofanTM engines have been selected for its future, second generation of E-Jets, with entry into service planned for 2018. The decision is an important milestone in the program, which is expected to be officially launched later this year.

The new engines – the PW1700G and PW1900G – range in thrust from 15,000 to 22,000 pounds. In combination with new aerodynamically advanced wings, state-of-the-art full fly-by-wire flight controls and other systems evolutions, they will result in double digit improvements in fuel burn, maintenance costs, emissions and external noise.

“We are very happy to expand our partnership with Pratt & Whitney, keeping the E-Jets family as the best solution for our customers, today and in the future”, said Frederico Fleury Curado, President & CEO of Embraer. “The PurePower GTF engines are a great fit to the next generation of our E-Jets and we look forward to another long lasting and successful program with Pratt & Whitney”.

“We are proud that Embraer has recognized the unmatched value of the PurePower engine, and we are committed to supporting a successful launch of the new E-Jet aircraft family,” said Pratt & Whitney President David Hess. “To date, Pratt & Whitney has completed more than 4,200 hours and 12,400 cycles of full engine testing for the PurePower engine family, demonstrating the benefits and reliability of the engine architecture.” Pratt & Whitney is a division of United Technologies Corp. (NYSE: UTX).

The second generation of E-Jets will be a significant step in Embraer´s commitment to continuously invest in this line of commercial jets, complementing a series of ongoing improvements currently being implemented in the existing family, with great benefits to its customers. Embraer´s objective is to offer the best product and maintain its leadership in the 70 to 120 seat market.

Odds and Ends: Random thoughts, Seinfeld style (i.e., about nothing)

We’re feeling irreverent today….

From Twitter: Boeing Defense@BoeingDefense In Sept issue of #Boeing Frontiers: With #Apollo roots, Boeing has grown to be largest #aerospace employer in #Alabama http://ow.ly/dB0Ef

Comment: We remember when Boeing said Alabamans couldn’t build a tricycle (during the bitter competition for the KC-X tanker).

Hunker Down: We’re going into the bunker on this one–Washington should become a right-to-work state. In 2008, IAM 751 (during its strike) boasted WA is the fourth most-unionized state in the country. We know this inhibits expanding aerospace here. We’ve heard it from companies. We’ve heard it from the head of one of the Economic Development Commissions here that unions are the first topic to come up when he is recruiting companies to expand here. We don’t object to unions per se but we don’t think someone should be forced to join one. (That’s how we feel about Republicans, too….)

Take two Viagra and try again: The refueling boom was being extended when it fell off an Airbus KC-30 during a test flight.

Thank you for smoking: Airbus is really pushing Europe to delay implementation of its emissions trading scheme, which jeaopardizes orders from China. Despite the sarcasm, we agree with Airbus–any regulations through be through ICAO, not on Europe’s own, ill-advised hook.

Macht nichts: No AirAsia order at the Berlin Air Show after all. The airline will be the first to operate the A320neo and the airplane with sharklets.

Macht nichts, II: MTU is a partner with Pratt & Whitney on the Geared Turbo Fan for the Mistubishi MRJ, the Bombardier CSeries, Irkut MS-21 and the A320neo but looks to join GE for the new engine for the Boeing 777X.