Boeing sees long life for 737

Update, March 11: Dominic Gates of The Seattle Times has an excellent article about the new Boeing airplane and its production site.

Original Post:

In a short article we did for Aviation Technology magazine, Boeing sees a long life for the 737. The airplane could sell right alongside the Y1, which Boeing’s Mike Bair says is erroneously called the replacement for the 737; he prefers to call this the “new airplane.” It is known internally as the Y1, hence our use of the term.

Indeed, the new airplane is 150-210 seats (some reports have it 180-220, but Bair told us 210 was the upper limit–though there is still some fluidity).

Our full article will be in the next issue of the magazine.

The Wall Street Journal has this article.

We’ve added a link to the daily news briefs from Aircraft Technology’s parent, UBM Aviation, to the right hand side of this page. UBM’s website is painfully slow, though.

34 Comments on “Boeing sees long life for 737

  1. Well, Boeing did say they would produce the B-737-800/-900ER along side of the B-797 ( the P-8A/I is based on the B-738). I don’t think they mentioned anything about the B-737-700/-700ER. But if the USN keeps ordering 1 and 2 C-40As at a time, into the next decade, then at least the B-737-700C will still be in production. Also the various E-737 AEW designs (Wedgetail, etc.) are also based on the B-73G.

  2. My prediction – OK, guess – is that Boeing and Airbus will have a similar line up of 737/A320 replacement planes by the middle of the next decade:

    – Single aisle. Most efficient use of space for this size of plane. Ryanair and Southwest can turn their existing 737’s around in less than 25 minutes. Twin aisles won’t make much difference.

    – Airbus style line up of 3 models: base model in the middle, one stretch, one shrink. The base model will take exactly 200 passengers in a single class. This is the largest plane that can be flown with four flight attendants, an important consideration for low cost carriers. It’s also slightly bigger than the 737-800 which is the current sweet-spot size. About 170 passengers in two classes.

    – Stretch will be about 240 passengers in a single class and 200 in two classes. A bit bigger than the A321 and 757-200 and slightly less range than the latter. A genuine 757 replacement. Airbus in particular will look to take over some of the existing 767 routes at the expense of 787-800.

    – The shrink is likely to be about 170/(150 in two classes). Any further shrink would be inefficient, even though a smaller plane is desirable from a marketing point of view, to compete with the CSeries. This is CSeries’ opportunity as I doubt Boeing and Airbus will put much effort into defending the bottom end of the market – in any case not to the extent of producing a different aircraft series.

  3. I agree with FF, that Boeing has essentially acknowledged that the C-series is unbeatable, without compromising the larger 737 models to be replaced with the 797.
    Boeing is thus ending up building a 757 replacement aircraft, Instead of the full range of present 737 models. That’s quite a decision to make at this early stage of the 797 development!

    I have also seen reports indicating that Boeing is proposing a two-isle body cross-section for the 797, which I believe will be a huge mistake.
    This conclusion is based on the very bad experience Boeing had with the 7J7, which was offered in a six abreast two isle configuration.
    Unless a minimum of a 7 or preferably an 8 abreast seating configurations can be justified, which is not the case for the 797 because the airplane becomes too fat and too short, a twin isle 6 abreast configuration loses more than it gains in weight and drag, while a 7 abreast configuration just about breaks even, because trading one seat row for an empty isle, loses as much as it gains in payload v.v weight and drag and can, therefore, also not be justified.

  4. 2 Points for consideration:
    Part of the reason for dealing with non-American manufacturer’s is to save money and part of the reason is a deal to increase industry in the customer country (e.g. Japan, China). Forcing the “RSP”(?)/supplier to build and staff a manufacturing facility in the U.S. seems to fly in the face of both of these grounds for offshore outsourcing.

    Boeing keeps claiming that the 737 “successor” will make the A320 NEO obsolete by the time Boeing comes into the market with it (Nicole Piasecki), yet claims they will still be delivering 737 for at least another 5 years after tit enters service (Mike Bair).

    Nothing personal but when Boeing talks big dreams, they either end off backing off (Sonic Cruiser) or they turn to nightmares (787). I do see it as a smart move, if they do stay away from the “smaller” jet sizes (<150 pax or so) and focus on the bigger planes where the margins are higher.

  5. Sure it’ll make the A320NEO obsolete. By 2021. What exactly is the problem for Airbus in this scenario? Where is the news?

  6. The key phrase in Dominic Gates article is this one:

    Though planning for the new plane is far from complete, Bair is speaking out to assure airlines and others that Boeing isn’t standing still while rival Airbus puts new, more efficient engines on its competing A320 single-aisle jets.

    If you’re being cynical you can see Bair as Boeing’s VP for Psych Ops. Mind you, John Leahy does a pretty good job on that front over at Airbus …

    • stand still?

      If in trouble or in doubt : run in circles, flat your arms, scream about 😉

      Wait for it.
      Boeing will again try to foist a “Dreamliner” onto the general public and purchasing officers at airlines.

  7. I think we shouldn’t ignore where the market is. The bulk of operational requirements is 130-170 seats on flight shorter then 100 minutes. I think that won’t change so fast.

    Building something like a wider 757 will produce a relative poor performer in the segment where the money is, where the 737-300 and 737-700 prospered.

    If e.g. an Asian consortium produces something jumping in the middle of the market (e.g. like this ECR-20), there is an issue. They buy the best engines too..

    Difficult choices IMO..

    • I’m not sure, keesje. Airbus and Boeing used to sell a shedload of A319’s and 737-700’s but demand has all but dried up in the last few years. Airbus and Boeing haven’t done anything different – it’s a market change. Bombardier are gambling that CSeries’ compelling economics will entice some would be A320 and 737-800 operators to trade down. But they’re fighting the trend.

      • Allen May be leeham can establish contact between us. I guess you mena the CFM in shop picture. Its not commercial available and I can connect you to the owner. rgds Kees

  8. So now that ILFC has ordered 100 NEOs, how will analysts view the whinging of the lessors when the NEO was announced? 😉

    Any bets on who will be the next lessor to go for an order of NEOs?

    How many more NEO orders will Airbus need to make the project worthwhile?

    How many 737s with delivery positions in 2016 and beyond have been sold?

    • What were the leasers (really) trying to protect
      with their held back stance and some protest
      towards the A320 NEO ?

      The leasability and resale value of their
      A320 fleets _or_ their B737 fleets ?

      My guess B737 values!

      Go back:
      why did Udvar Hazy protest the A350Mk1 so much?
      Airbus producing a dud should not have had tangible
      effects on his portfolio.
      Airbus placing a low effort, direct and worthwhile
      counter against the Dreamliner would have marginalised
      prospects for his Dreamliner investment.

      • No Uwe, the leasers are trying to protect their A-320series values. As the A-320NEO competes against the A-320series as well as the B-737. But the NEO claimed 15% improvement in gas mileage is against the classic A-320series, the improvement against the B-737NG is not mentioned.

    • I don’t know the exact market share of airbus but it is not so bad for a plane that’s “behind”. I would like to see the numbers when it has “catched up”.

  9. As I think I said before, they must have some great stuff to smoke in Chicago. 😀

    I think it should be clear to anyone that the lessors (quite legitimately) tried to protect their narrowbody fleets, regardless of which manufacturer.

    That the first one is keeling over so quickly just proves that the lady did indeed protest too much. 😉

  10. For great blog re “new” 737 replacement, see Bloggers are beginning to say that B’s new plane is intended to preserve B’s 757 monopoly against the A321neo, not protect the 737-700-900 from the A320neo. Myu thoughts:

    1. B and A are making lots of money from the 737/A320 because the mkt is so huge, now and going forward for years, that neither can dominate and each can get good margins. Thus, the first strategic goal of each is to preserve their share by making sure their current customers keep buying their planes and don’t jump to their competitor. For B, this means keeping their biggest customers, SW and MOL, and their overall share of the US mkt, which means in large part defeating A for replacement of single aisles by airlines that operate large numbers of both. These customers are largely US – US Air, Delta, and UN/Cont’l.

    2. To achieve these goals, each air framer is gradually improving their offering, with at least one blogger suggesting that the neo is really in response to B’s 737 PIP, not the C Series types. Each company’s goal is to keep their plane close enough to their competitor’s in performance that it will not be cost effective for current customers to jump to their competitor, even if the competitor’s product is slightly superior. B have argued over and over that they can do this with 737 PIP without re-engining; and more recently that the 737 will be in production well into the 2020s and the new plane will NOT be a replacement for it.

    3. So, what is B after with their new plane? I think it is to offer ultimately a new replacement for the 738/9 simultaneously with continuing to offer those planes, and to dominate the 757 replacement mkt. B have been describing the new plane in the 180-210 seat range. I recall MOL saying that his ideal is 200 seater and SW is trending to the 189 seat 738. There are about 900 757s in service, ranging from 15-25 years old, mostly 752s. To put this huge mkt in perspective, there are more 757s flying today than all of A’s very successfully A330 family combined. See A’s web site. B’s goal, I speculate, is to promise a clean sheeter to replace the 752 in 2019-2020 which is hugely better in every way than the A321 neo, fthe first of which will have been delivered just two-three years earlier in 2017; and to leverage this plane’s commonality with its smaller sibling that will replace the 7388/9 to get not only SW and MOL and the like but all the 737 replacement orders from the US airlines that operate the 757.

    Gotta go. More to come.

  11. I’ve made some additional slides. Looking at global populated areas, the bulk of flights will remain under 1000nm. It’s simple geographics. Bringing costs dwon per seat seems the key. I added the slide comparing the A321NEO to an aircraft with similar seat capasity concept, teh ECR-20, giving in on range, comfort, speed, cargo capability for significant lower cost per seat.

    IMO the times when fuel formed a stable, small part of total operating costs (eighties, nineties) are gone forever, changing dynamics and making it less feasible to have one airframe for both 130 seat 1 hour and 220 passenger 5-6 hours..


    • What is your reasoning for being able to drop 11t/22% OEW for a wider cabin design in respect to the A321 ? ( just asking 😉

      • Uwe, it’s 9m shorter, more structural efficient (stiffnes), 25 yrs newer materials, isn’t cargo capable, carries half the fuel etc. Simialr to comparing a 120 seat F100 OEW (24t) to a A318 OEW (39t). The latters capabilities come at a price..

        • length: you exchange that gain for increased circumference.
          In the narrow body domain you can’t thin out the skin to
          gain from the wider distribution of forces.

          Additionally you need bigger control surfaces.

          Research (airbus, dlr, universities ) seems to indicate that gains
          from cfrp are currently insignificant in that size domain.
          Estimated gaines for a best of breed design AlLi and/or CFRP ) versus
          the A320 did not go beyond 10%.
          Taking the NEO improvement path is a completely coherent decission on
          Airbus side.
          In contrast Boeing is dappling around, having no clear idea where to go,
          starting little balloons here and there to see for which combination of
          changes and “innovations” they would gain customer support for.
          This will be more difficult than the meanderings that led to the Dreamliner.
          Customers have had a hard learning experience from that “can not resist
          the sales pitch” that in the longer run seems to lack all hard backing by fact.

  12. Scott, what do you make of Airbus’ announcement that it won’t allow customers to convert existing A320 orders to Neo orders?

    • I’m not Scott 😉 but I think JL wants to prevent airlines massively switching 2014&2015 slots to the NEO. Offering the winglets later this yer is a smart move IMO). I think he sets the stage saying switching will come at a price.

      • I agree. Definitely conversions are a worry for Airbus, but it had to be something the manufacturer knew would happen when they neared EIS. I’m wondering how customers are going to take the news. What kind of penalties do they pay if they cancel legacy orders and reorder?

    • That’s what Leahy said. But I have to believe that if push comes to shove, Airbus will allow some conversions.

      • No, it seems Airbus was indeed purposely overscheduling here. Now Airbus is officially considering bringing it earlier 6 months.

        It’s a cat and mouse play..

        • How timely could the NE partners deliver? GTF earlier than LeapX ?

          With a customer selecting GTF (1) EIS timing could well be GTF driven.
          And in combing this with the A350 derivatives adds some flexibility for Airbus.
          My guess is Airbus prefers “jobs” that can be marshalled into order to a lot
          of items that bring hard and late timing.

          1: will anyone actually take the LeapX? My understanding is that there is much more incremental potential for the GTF than LeapX.

    • PW told us two years ago it would take four years from “go” to EIS for an A320/737 class engine. This would mean Dec. 2014, in theory. Make it mid-2015 for practicality. Airbus plans A320NEO EIS 1Q16; airplane certification lags engine certification, to this is about right.

    • Airbus also stated that they wanted to get the A350 out of the way first. Commentators have raised doubts about whether the A350-1000 will be delivered by 2015, but at least the 900 and 800 models should be out of the way by 2016 (allowing for a delay of not more than two years!)

  13. Rpx :
    I agree. Definitely conversions are a worry for Airbus, but it had to be something the manufacturer knew would happen when they neared EIS. I’m wondering how customers are going to take the news. What kind of penalties do they pay if they cancel legacy orders and reorder?

    The closer to the date of original delivery they do it, the more they pay, both financially in lost deposits and progress payments, and in terms of having to wait for the new plane, since they are back at the end of the queue (assuming the line is fully sold).

    I would expect that following the opening of the NEO line, and given availability, anyone wishing to pay the full premium on the price could convert, as long as there’s a slot. As Keesje said, the issue is before this.

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