Advancing NEO puts pressure on Boeing

Here’s the last of three stories on the Boeing 737, the A320neo and the new Boeing airplane.

Date: 12/04/2011 08:52
Source: Commercial Aviation Online
Location: Seattle
By: Scott Hamilton

Airbus’ decision to advance by six months the entry-into-service (EIS) of the A320neo puts more pressure on Boeing to decide what to do with the new airplane in the 737/757 class.

Airbus now plans to have an October 2015 EIS for the A320neo. Although the change in the A320neo timeline is only half a year, this means Airbus theoretically has a new, fuel efficient airplane available four or five years ahead of what Boeing is currently talking about.

The timeline on the A321neo, touted by Airbus as a replacement for the Boeing 757, remains unchanged for roughly the fourth quarter of 2016. The A319neo leapfrogs the A321neo from spring 2017 to spring 2016, six months after the A320neo. The A319 and A320 share a common wing and the A321 wing is slightly different and requires more engineering to accommodate the NEO.

Airbus COO-Customers John Leahy still believes Boeing will cave and proceed with a re-engining programme for the 737. Boeing officials remain adamant, at least publicly, that the business case for the 737RE isn’t compelling enough to proceed-that all-in including ownership costs and maintenance offsets for another engine type, parts and greater wear-and-tear for landing gear (a heavier airplane), the net cash operating cost benefit only is 1%. (Sharply increased oil prices may alter this number.)

But proceeding with a new airplane, which Boeing officials say they prefer, is anything but certain. While Boeing’s Mike Bair, head of the 737 future programme, and Jim Albaugh, CEO of Boeing Commercial Aircraft, each say they believe there are technologies that will be available by the end of this decade to put into a new airplane, the new engines offered by CFM, Pratt & Whitney and Rolls-Royce currently promise at best about 20% reduced fuel burn compared with today’s engines. CFM and PW promote their LEAP-X and Geared Turbo Fan engines as 15% and 16% better; improvements of about 1% per year gets to the 20% by 2019-2020, when Albaugh and Bair talk about EIS for its new aircraft; Jim McNerney, CEO of The Boeing Co., was less certain. During the year-end earnings call, he talked about an EIS late this decade or early next decade.

The definition of Boeing’s new airplane also remains, at this date, uncertain. There have been discussions of 150-210 seats or 180-220 seats, one aisle or two, composite airplane or a combination of composite and aluminum lithium.

The fuselage skin fatigue failure 1 April of a Southwest Airlines 737-300 at 40,000 cycles-just two thirds of the way to where Boeing computed specialized inspections would be required to detect potential skin cracks-may move Boeing toward an all-composite airplane and a larger one, where composite scalability is less of an issue in downsizing from the 787.

An all-composite airplane in the 737/757 class will present a major challenge for manufacturing at the rates already being discussed: 60 per month, and this doesn’t include any Airbus response. The aerospace industry today doesn’t have this capacity.

Clarity from Boeing is widely expected to come before or at the Paris Air Show.

10 Comments on “Advancing NEO puts pressure on Boeing

  1. One of those decisions one is glad someone else has to make.
    If it is a beancounter decision and faced with the facts as we know them, I am sure they will re-engine.
    A fully amortized 737 can handle a $3 billion investment with a certainty of getting close enough to the 32x neo to make it attractive with low commercial risk.A $10-12 billion investment to give a very few percentage points advantage plus attendant risk may not be something that will warm a beancounters heart?

  2. Boeing is also pressured as it has to cover the entire B737NG range of seats (135-~190) and still offer something for growth. Now, you cannot offer a competitive 140seat aircraft for a 500nm mission when you are aiming at 180-200 seats on a 3000nm mission.
    Therefore, the capacity and range is hard to figure. More capacity might be beneficial for some operators, but let’s not forget that many operators also need 130-170 seats and are not working in a stable growth environment.

  3. Probably Boeing optimizing to also cover 200-240 seats / 3000NM will compromise any design in the 150-160 segment <800NM, which is where most of the action is.

    I think the break even of a more radical 737 upgrade would be not much higher then 400-500 aircraft. It would give Boeing time to wait for / develop breakthrough technology not available by 2020. Same as Airbus.

    Made a sketch last year: Cockpit, landinggear, wing mods.

  4. A’s waiting until 2030 to produce a new plane doen not necessarily mean that B should wait. B has dealt with the different mission profiles you talk of by offering two very dfferent planes, he 737 and 757. B must address the 757 replacement issue if US airlines like the A321neo for that role because they may also then buy A319/20neos to replace their aging 737s and 320s. US Airways has asked A to give the 321neo the 757’s p/r and Steven UH has called on B to build a new twin aisle 757 replacement. B is unlikely to do that if A will produce a new plane which competes with the 757 replacement in 2030. Th question is, what type of new plane is A likely to offer in 2030? A single aisle 150-200 seater to replace the 320 line, or something larger? Or, can they do both? I think B wants to build a new replacement for the 757, and is trying to figure this out. My guess is that they will go for it and re-engine the 737. This assumes the 787 ceases to drain cash and B seamlessly introduces the 789 and 7810. Maybe the answer is not to risk a new plane, heailly improve the 757 and re-start production.

  5. I think the market segment around 240 seats medium range is a lacune not addressed well at this moment. If Airbus decides to build the A320 well into the next decade, a A320 version aimed at this segment seems feasible. A new / stretched wing would be required. Maybe similar to the the plug the A340-500/600 got, based on the A330/A340 wing.

    A low risk approach to an emerging market niche, now that the 757, 767-200s, A300, A310 and Tu 154 are retired. TATL, US Transcon, Europe-MEA, intra Asia, leisure and short haul city pairs seem likely markets.

  6. Boeing has the option of a new larger plane 2020-2025 AND re-engining the 737 about 2016. If they don’t re-engine the 737, the new plane will have to smaller, I believe, to maintain the 737 customer base.

  7. Boeing has the option of a new larger plane 2020-2025 AND re-engining the 737 about 2016. If they don’t re-engine the 737, the new plane will have to smaller, I believe, to maintain the 737 customer base.

  8. About 750 B757-200/300 remain in active passenger service, many of which are operated by US carriers. 500 (465 -200, 37 -300) are operated by Delta, American, Continental, United and US Airways.
    No North American B757-200 is operated with more than 190 seats, most have between 165 and 180 seats. The 37 -300 have around 220 seats, while this aircraft apparently did not attract the airlines.

    Hence, there is no market for an aircraft with substantially more than 180-200 seats when we look at current operators of B757. Looking at current B757 layouts, the dusty charm of legacy carriers comes up again: generous number of monuments, wasteful cabin layout. Or in conclusion: the B757s are used because they are there, I doubt strongly that any airline actually needs a one-on-one replacement for them.
    American operators are known to be frequency-lovers instead of capacity-lovers. And although many US airports have capacity issues, I rather kick out the sky-blackening number of 50-seaters than replacing a 170-seater with a 210-seater.
    Average seat number per take-off in the USA still is below 100 seats.

    The only advantage the B757-200 has is range, allowing transatlantic routes. However, these are a few routes which can also be served by A320NEO, albeit with lower number of discounted economy seats. By the way: Having endured a 7-hour trip in a B757-200 from Hamburg to Newark, I can tell you that the “loss” of the B757-200 on these routes is a win rather than a loss. And I am not very spoiled when it comes to cabin comfort.

    An A321 easily goes to 190-200 seats, Lufthansa’s “Neue Europa Kabine” seats 200 with extra-slim seats. Usually the A321 is operated at 185 seats (that was the legacy planning).

    Seriously, although I really like the idea, a market for a B757 replacement is currently hard to find. The few routes that need the capacity do not justify that type. Only if such an aircraft can offer a serious advantage over a single aisle aircraft, it would be attractive to airlines.

  9. A double-stretched A320 would probably cash in sales like other similar designs did: B767-400, B757-300, A340-600, B747-8I. Although each one was a failure in the market place for specific reasons (and except for the B757-300 all are still officially on offer), a double-stretch seems not to be attractive.
    Each of these projects usually was started with the idea “just invest a few Dollars and grab a huge market” (usually aimed at replacing existing aircraft). It turns out: airlines are not slaved to a fixed seat count. They take whatever seems best deal in terms of lifetime cost and adjust their network accordingly.

  10. Schorsch, if we look at the total number of 757, 762, A300, A310 used to cover 200+ seats in 2 class medium haul, plus larger 767, A330 missused to fly the routes, plus 25 yr growth potential of current A320, 737 routes flown high frequency because of demand for capacity rather then even more frequency, the market is far bigger then only looking at 757s operating as we speak.. Traffic will probably double in the next 15 years, as will fuel prices, landing rights and noise restrictions.

    Maybe a stretch would sell like other stretches such as 767-300ER, 737-800, A321, MD80, A330-300, CRJ. E190, Q400, 777-300ER, 787-9 etc..

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