US airlines ready orders

There has been a rash of articles this week breathlessly focusing on US carriers and the prospect they will order airplanes this year.

This is no revelation, nor is the prospect that Boeing customers might line up and buy from another manufacturer.

We’ve written about this in the past. It appears to be time to revisit the topic.

American, Continental and Delta Air Lines signed exclusive supplier contracts with Boeing in 1996, effective for 20 years, so particular attention is on these carriers.Although the agreements still technically are in effect, as a condition for European approval of the Boeing-McDonnell Douglas merger, Boeing agreed not to enforce it. The airlines have honored it in the meantime.

Southwest Airlines, of course, has been exclusively Boeing since its inception in 1971 and had purchased more 737s than any other customer. If they buy non-Boeing airplanes, so the arm-waving goes, the world will fall in on Boeing.

Not hardly.

Let’s go down these airlines, one-by-one.

American Airlines

American has one of the oldest fleets in America. The sheer volume of aging airplanes–MD-80s, 757s and 767-200s–practically means no one manufacturer can reasonably provide all the airplanes needed to modernize in a short time. We know American to be unimpressed with the 737-900ER and favorably disposed toward the A321neo as a replacement for the 757 and 767-200ERs used on US trans-con service. The A321neo can also be used on thinly traveled trans-Atlantic service and Hawaii, routes that challenge the 739ER. This is an easy call: A321neo.

Replacing the MD-80 has been underway with American’s purchase of 737-800s, and American has already reduced the old airplane fleet by 100. Boeing could drop the price of the 737 even more to keep this business and with production ramp-up, deliveries can be accelerated. We think Boeing keeps this segment of the business.

Continental Airlines

An all Boeing customer with the naming of Gordon Bethune, a former Boeing exec, as CEO in the 1990s, Bethune is long gone and while many of his executives remain, Continental is now United Airlines with its large A319/A320 fleet and an order for A350s. The Continental management displaced the United management but the lead fleet planner told us directly now that there is a mixed fleet, Airbus will be very much in contention for new airplane orders. The size of the combined carrier is a very different proposition than the size of Continental. The “new” United hasn’t issued an RFP yet but we give Airbus a solid chance to win orders from the formerly exclusive-Boeing Continental management.

Delta Air Lines

A similar situation to Continental exists but somewhat in reverse. Delta was a member of the exclusive suppliers club and Delta was an exclusive Boeing customer. But Delta acquired Northwest Airlines, a major Airbus operator. The old exclusive-Boeing Delta management is gone, however, replaced by the old Northwest management that ordered Airbuses. Relations between this management and Boeing at at rock-bottom, largely over the 787 delays. Delta hasn’t canceled the order but it may as well have–the deliveries have been pushed out to the 2020 decade, which is infinity in airline terms. Delta is Airbus’ to lose. There’s no exclusive supplier bias toward Boeing here.

Southwest Airlines

This would be the earthquake blow to Boeing if Southwest buys from another, and CEO Gary Kelly and his executive team have been telegraphing for some time they are prepared to do so.

Fuel reduction is very important to Southwest, as are strides in reducing the environmental impact of emissions. Now that Southwest is buying AirTran and a second fleet type is coming in the form of the Boeing 717 (nee MD-95), Southwest has mentally accepted that one fleet-commonality is history. (Actually it has been since the introduction of the 737NG in 1998; this aircraft is 80%-90% different than the 737 Classics also in Southwest’s fleet.)

Kelly and his offices have said they are prepared to operate a third fleet type, an acknowledgement that they will have no choice since any advanced airplane will be markedly different than the 737. On a short-term basis, Southwest may be prepared to operate a fourth type until one series can be retired.

Kelly has on several occasions said words to the effect, “Airbus has a solution; Bombardier has a solution; Boeing does not have a solution and waiting until 2019 isn’t a solution, it’s only a promise.”

Southwest isn’t especially keen on the A320neo solution because it is, after all, only a compromise airplane. Its promised EIS is late 2015 (with the first available delivery slots now in 2018 after the orgy of orders at the Paris Air Show), so availablility vis-a-vis the Boeing Promise is now only marginally better. If Airbus could delivery the neo from 2016 (a possibility if Airbus increases production rates again), Southwest might be ready to jump. We consider this still a long shot at the moment.

Bombardier is the only manufacturer with a new airplane and the CS300 is perfectly sized to replace 25 737-500s and the incoming 86 717s from AirTran. BBD is now sold out into 2016, and it needs a 150-seat CS500 to be a serious contender to replace the 175 737-300s which carry 137 passengers in Southwest’s configuration. Southwest would like to upsize this airplane slightly and the CS300 can accommodate 149 passengers only by reducing seat pitch to 30 inches. This is OK for most airlines but Southwest is pretty firm that it wants 32 inches for passenger comfort.

A CS500 would require major investment by BBD and EIS wouldn’t be until 2017, reducing the interval to the Boeing Promise. Still, NPV analysis would be in BBD’s favor.

The outcome at Southwest: we think there is a reasonable chance BBD could win a CS300 order. The neo is probably longer odds because it is a compromise airplane. If Boeing re-engines, neo has no chance and a 737-700RE, which will deficient on operating economics vs. CS300, will be close enough so that Southwest probably would stay in the family.

45 Comments on “US airlines ready orders

  1. The MD80 maintenance debacle must also play on American’s mind – they surely don’t want to base their entire domestic operation on the 737NG then have the whole system grounded in the event of another oversight.

    Assuming they’re still in business to take delivery, I’d think Airbus is pretty confident of selling some units to AA.

    • See that in context of preparations to litigate Airbus for lost trade from “unfair” subsidies.
      Rather demented thoughtprocesses US resident logic in that context is funny anyway.

  2. Scott – interesting breakdown of the U.S. carriers.

    I think both DL and UA could certainly buy from both Boeing and Airbus for their mixed fleet. WN I think will stick with Boeing.

    AA is an interesting case. Would there be enough “numbers” in the fleet for AA to add the A321NEO?

    While it will certainly be much better than the current B739ER, I’m not so sure if it really fulfills the requirements you mentioned -i.e.as a B762ER and B757 replacement.

    AA’s B762ER’s used for SFO/LAX-JFK are 3-class planes. They would have to cut a number of seats down if they are going from a twin-body to a single-isle plane (all things being equal-ie not an increase in frequency, change in seat types, etc.). I was thinking that AA would eventually put their B763ER’s on the aforementioned routes (and retire the B762ER’s) when they (eventually) get their B787’s.

    For the B752’s – AA has a number of routes, especially TPAC and South America where I don’t believe the A321NEO would be able to fly to with a decent load factor. That being said, I’m speculating and I don’t know the numbers as much as you probably do.

    @Andreas:

    Do you REALLY think Boeing is sitting around “twaddling” its thumb? I do understand there are a number of former MDD management at the current Boeing, but I don’t think Boeing is living in “la-la” land either.

    I also believe once Boeing announces the 797 (or whatever its going to be called), it too will “rack-up” orders like the A32XNEO has.

    • No I don’t. But I think that with statements like the ones they are making, they disqualify themselves as serious partners in the conversation. It should be clear to anyone that a claim that the 737NG is 2% better in anything than the NEO has been quite spectacularly exploded in Paris. They need a new line, and until they find it, they need to stop trotting out the old one. The sooner the better for their credibility… Wait a sec… 787… Oh, just carry on then… 😉

    • Jacobin, there isn’t a direct replacement for the 757. I believe airlines such as American Airlines will replace some by downgrading to the A321 NEO and others by upgrading to the 787. Mostly they will downgrade as single aisles are more efficient and more flexible.

      The only other possibility is to hang onto the 757s in the hope that a yet unannounced plane will replace it.

    • AA has something like 120+ 757s (from memory, not from going into the Ascend data base). AirInsight did a quick analysis of the A321G (as it was then called, prior to Airbus launching the neo program) compared with the 757. You may find it here: http://airinsight.com/2010/08/26/the-case-for-an-a321g/

      Some assumptions have changed since this quickie last August as more data became available, but you will get the general idea.

      As for US trans-con in place of 762, your point about 3-class is noted, but airlines don’t care about passengers; they only care about costs. There are major, costly ADs coming up on 762s and the airplane is getting long in the tooth. It has to be replaced. Just as 738s have gone into trans-con service in place of 757s and even 767s (remember a longggg time ago when 767s were quite common trans-con?), A321Ws and A321neos will replace the more costly aircraft, 3-class be damned.

  3. The interesting question to me is whether any of these airlines are prepared to make strategic investments in current generation non-reengined planes. Recently airlines have bought 737’s and original A320’s in half dozens and dozens. But the strategic fleet decisions of a 100 or so planes have all been for the A320 NEO. Can Boeing get those kind of orders? If not, I think they’ll be forced to re-engine the 737. They just don’t have a big enough order book to keep going at high production rates until they bring out the New Small Airplane. It’s possible then that one of the airlines you mention will be the launch customer for the reengined 737.

    • Thinking further, another option might be short term leases with unre-engined 737’s or A320’s followed by NSA in the case of Boeing or NEO’s in the case of Airbus at the end of the decade. These airlines are by any definition important customers. But in World terms they are a special case. No other airline except the US legacies have such large numbers of obsolete aircraft types like the 757 and MD-80. There seems to be a desperation to replace these types, even if the replacement aircraft aren’t ideal. Airbus will have plenty slots for current generation single aisles from 2014 onwards, but they won’t be able to, or won’t want to, supply their improved aircraft until the end of the decade.

    • Do they have the liquidiity available to buy new?
      Like Boeing the US legacies fit very well into the superanuated products mindset.
      ( how writeoffs over age handled under US commercial practice ?)

      My argument for a market bifurcation similar to the automobile arena.

  4. A very good analysis Scott, about what the airlines may and may not do.
    However, it is all based on the one fact; that Boeing has yet to announce
    what they are going to do about a 737 replacement aircraft.
    As I indicated earlier, Boeing is in relatively good shape for the first time
    in many years, because once the 787 and 747–8 deliveries start later this
    year, the money will start rolling in and hopefully Boeing will then make
    the only decision that makes any sense to me, i.e. an all new 737!
    A re-engined 737, even though less costly to produce, will in my opinion
    be no match for the more modern and wider-body NEO series.
    The market for A320/737 replacement aircraft is apparently much larger
    than anybody had expected, driven by higher fuel price expectations and
    Airbus could not possibly handle all their business with the A320NEO
    program to which they are now locked in, which will cause the C-Series
    airplane to secure a much larger share of this market.
    In addition, if Boeing comes in with an all new 737 with a carbon fiber
    structure, even for delivery a few years after the A320NEO, Boeing will
    have much a better aircraft compared to the A320NEO and should,
    therefore, get the lions’ share of that mid-sized aircraft replacement
    market!

  5. @Andreas:

    I’m sure we can go back and find many of Leahy’s comments just as asinine and superfluous. It
    certainly hasn’t stopped him from selling thousands of planes.

    Each individual airline worth its salt will have have all the numbers needed to figure out what the
    real risks,costs/benefits,etc. are.

    Regarding the B787 credibility – well last I recalled the A350XWB is late and hasn’t even been fully
    assembled yet, let alone flying. I think we should leave this part of the discussion for another subject.

    @FF:

    I think your point might be more accurate of what carriers which have a large number of B757s (such as AA,
    DL, UA, etc. do). Replace their older B752’s with A321NEO’s. Many B752’s are not too old and can fly rest of the
    routes which need the B752. Such an amazing airplane it is!

    @Leeham:

    Thanks for the link, the “A321G” .pdf is certainly interesting. Maybe this is along the lines as to what Airbus is pitching and
    what carriers are looking at. If (big if) what you present is true/accurate than it would be hard not for carriers to order the A321NEO-G (even
    though I will disagree on the range charts as we know headwinds, extra fuel, etc. should be included-regardless).

    While I agree with the costs, especially of AA’s aging B762ER’s, I’m still going to question whether AA will
    replace the B762ER’s on these two routes (especially LAX-JFK) with a single-isle plane. While I know UA’s p.s. B752 for SFO/LAX-JFK
    has been succesful, I’m not so sure how many loyal AA flyers in the Bay Area I know of would be enthralled of going from a 3-class twin to a 2-class single isle.

    In the end, I guess its a “dollars and cents” game.

    • How many A345/6s did Leahy sell after his comments about it just needing a fuel price guarantee to keep them selling?

      I rest my case.

      • I was talking about his comments regarding the B787 specifically. Regardless, I haven’t read anywhere in print where any air carrier/lease management has called Leahy a “buffoon” (or something like that). He talks “trash” but he’s done a great job in selling planes for Airbus….

  6. jacobin777 :
    I also believe once Boeing announces the 797 (or whatever its going to be called), it too will “rack-up” orders like the A32XNEO has.

    I rather doubt that. The A320 (and the 737 for that matter) line is a well oiled machine, that you can control in terms of ramp up rates. Most of the cost, if not all, had already been paid off years ago and it is basically running at pure profit. Airbus and Boeing will probably be able to increase the rates even further into the 50s. You cannot do that with the “797”. For EIS in say 2020, an airline will be looking at probably end of next decade before they get their full order into the fleet. Add to that uncertainties surrounding a totally new development programme, ramp up issues and I cannot see how 797 can accumulate 1000 orders in the space of 6.5 months…

    jacobin777 :
    @Andreas:
    I’m sure we can go back and find many of Leahy’s comments just as asinine and superfluous.

    The trouble is that Albaugh has been doing his best to upstage Leahy with some one liners that is getting people puzzled (and Leahy openly wondering what he is smoking)… “Even after the re-engine [A320neo] we’ll be 2 percent better and that’s if we do nothing on this airplane”, the other one, from the above linked article is that they can charge higher price for the 737, presumably compared to neo.
    I have no doubt that Boeing are doing something, it’s just that not many commentators (Dick Aboulafia, for example is openly worried!) or their customers (who are going to the press left, right and center to urge Boeing to either launch a neo or a 797) know what that is and the best Albaugh can do is come up with the above… From my point of view it is not doing much good to Boeing’s credibility but that’s only my 2 cents.

    The AA and UA orders (when they materialise) should be a very interesting test for the two OEM’s strategies. Exciting times ahead.

    • @UKair:

      At first Boeing will not be able to get the run-rate as high as their current single-isle but they will darn make sure they have an idea of what their production capabilities will be. I also don’t believe they will have the same problems with manufacturing as they have had with the B787.

      A lot of what the carriers/lessors know is obviously not revealed to the media. Maybe it will take “a loss or two” to get Boeing’s “flame fanned”.

      • Many forget that this business is still a manufacturing business. I think in general people under-estimate the manufacturing process. The fact that it takes years to bump up the volume to higher levels on the current A320 and 737NG – both in production for years with stable processes and a stable supply chain – proves that building a brand new NB at a rate of 40+/month (which is what is needed to sell 1000’s of planes) is an absolutely enormous task, regardless of manufacturer. It will take many years to reach this production rate and not only time but also huge resources. Airbus had a disasterous ramp up for the A380 and Boeing an even bigger one on the 787. One thing I noticed from the A350 is that Airbus seems to focus heavily on the production ramp up, but we still have to wait and see how that one is going to work out.

        The Airbus advantage is that the NEO is effectively using the same manufacturing process and supply chain. They announced that effectively the only change are the engines and the rest is untouched. Although this limits the benefits (according to the pundits, they should have “just” changed the wing, give it TATL range and whatever else they could dream of), it not only keeps R&D in check, more importantly it almost guarantees a high production rate from day 1. Boeing could come up with a brand new 797 NB with EIS in 2019, but you won’t have a fleet of a 100 planes by 2023-2025 earliest.

        Just as the 77W and A332/A333 sell well now because they start earning money by 2013 while the 787 and A350 will only do that by 2018-2020 if you order them today, a NEO could have been earned back by the time you get the first 797 in service. In NPV and IRR calculations, time is critical and will completely destroy a 5-10% CASM benefit if that would exist – a 1 year difference is enough to do that, let alone 5 years.

      • I am not sure that isn’t overly optimistic. The industry seems to be very ‘leaky’. If nobody knows what they’ll do, then they either have:

        i) brought under control any potential leak, even while leaks are still going on in the 748/787 programmes; or
        ii) they actually don’t know (as in haven’t made their minds up) what they’ll do, so there’s nothing to leak.

        My money is not on i) – my guess is they are stuck between a rock and a hard place, and they are discussing options with potential customers of a new plane. But the discussions are likely very open-ended. Boeing is facing far more risk regardless of what they do than Airbus did when they decided to go for the NEO.

        Re-engine:
        – Boeing will not get the engine vendor to foot the bill, why would CFM do that?
        – Boeing has to spend more than Airbus did, and they have to cough the money up themselves.
        – Boeing is number 3 on the list for engine availability currently, meaning they may only be able to EIS their NEO bird later.
        – Outcome at best parity, but established customers will continue to buy, unless they need the A321NEO which may end up being in a class of its own
        – The 900ER maybe pretty much dead
        – This move might deny Airbus the ability to massively expand production in the 5-year window 2016-2020. What many here fail to see is how the NEO sales success enables Airbus to consider expanding production well beyond 42/month. What if they go to 50/month? That would add another 2,500 NEO positions from 2016 to 2020. Given current sales, they might be able to sell those. Sales beget sales as we have seen.

        New plane:
        – significant risk, e.g. even if they launch today, can they EIS in 2019, and what will the ramp-up look like?
        – Benefit over NEO is good, but not huge. But it’ll turn the tables for a few years.
        – learning from the 787, cost to the programme at Board approval will be far higher, since risk-sharing suppliers can not be relied on as much.
        – How does this sit with engineering resources for 787-10 and enhancements to 777? Probably not a significant issue.
        – What does this do to interim sales of 737s between 2015 and when full ramp-up has been achieved? Will 737 be able to sell to fill unmet demand from A320NEO? What if Airbus again raises rates? What does this do to cash-flow during a development-heavy period? What does this do to the willingness of suppliers to expand production now?
        – even in this case they only gain a few year’s breathing space. Airbus will still sell 2,000+ NEOs, meaning that the programme is a run-away success and that it will bring in significant cash-flow. They can launch their own NSA 4 years after Boeing (2016).

        These are all important questions for Boeing. If the answers were easy, they’d have announced a decision, or at the very least they’d be leaking one.

      • jacobin777 :
        @UKair:
        I also don’t believe they will have the same problems with manufacturing as they have had with the B787.

        As with any new development programme, the risks and uncertainties are much greater than a RE, which will use an existing production line. Another point is that a re-engine for Boeing could turn into a ‘Major Change’ from the certification point of view, which would mean that the development costs would skyrocket. So I can understand that they are taking their time to make sure they come to the right decision but I have a feeling that ‘time’ is not on their side… There is an increasing number of carriers making their purchasing decisions now and the apparent absence of a RE/NSR strategy is driving them to the media.

        jacobin777 :
        @UKair:
        A lot of what the carriers/lessors know is obviously not revealed to the media.

        A surprising number of them had been very vocal in the media.

  7. Good analyses IMO, taking into account realistic considerations for the majors.

    I think the A321 NEO has been hanging over the US market for more then a year, Airbus was already discussing it with the airlines then. It has a niche that will likely not be challenged for more then a decade & an sizeable 757/762 fleet that gets real uneconomic.

    Issue is IMO given a the purchase of A321 fleet, what’s the business case for additional 737-800 for the majors. The 737 commonality issue is gone and the A320 still significantly more efficient then the 738. Apart from lower fuel consumption is also has a spacier cabin, cargo capability, superior payload range, lower polution, far less noise restrictions.

    Then there is indeed the CS300. Probably more efficient the any new/reengined 6 abreast aircraft, for the not insignificant 120-145 seat segment. And the when /not if CS500. If the Chinese put a billion and 100 aircraft order on the table..(they build the fuselages+ new deal with Comac) for a bigger stake, all options are openn. No doubt they can.

    On the Boeing NSA; is the technology for achieving a significant boost in efficiency over the A320 NEO at the right technology readiness level (TRL) by 2020? Everyone looks at the engines = GE/CFMI , PW and RR. They aren’t boosting breakthroughs for 2020.
    Maybe an NSA that can carry the GTF/LEAP but is ready to carry something with significant higher BPR later on? I’ve seen some NASA Boeing high wing concepts..

    • How about if the Chinese buy Bombardier and merge it with Comac?

      This will really scare A & B.

  8. @AngMoh and @ Andreas @ UKair:

    Don’t forget, we are talking about a program which will start “churning out”

    planes in 9-10 years at least. This isn’t about 2015-2016.

    I also believe Boeing will have learnt from their B787 mistakes (as well as the aformentioned A380 mistakes made by Airbus).

    With the major portion of the B787 design finished (as well as the B748 program nearing completion), Boeing will have a lot engineering resources back.

    I also have to respectfully disagree regarding the media.

    While many carriers have been “vocal” in the media, they don’t discuss “in depth” information and many of the CEO’s don’t even know what the “real” numbers are. That’s left up to the “number crunchers” who pass the info to the CEO’s, etc.

    @Keesje:

    “The 737 commonality issue is gone and the A320 still significantly more efficient then the 738. Apart from lower fuel consumption is also has a spacier cabin, cargo capability, superior payload range, lower polution, far less noise restrictions. ”

    Prove “significantly more efficient then the B738″…..rest of your comments aren’t worth a “hill-of-beans” as the market has practically split the orders the past few years between the B737 and A32X.

    • jacobin777 :
      @AngMoh and @ Andreas @ UKair:
      Don’t forget, we are talking about a program which will start “churning out”
      planes in 9-10 years at least. This isn’t about 2015-2016.

      So a 5-6 year sales-run for the A320NEO, in which about 2-3,000 units can be delivered. This must be the best programme ever for Airbus. 🙂

  9. Andeas, I don’t know if I’m misreading this, but it seems to me that Boeing’s thinking, in broad terms, is clear: You can’t upgrade planes for ever and there’s time when you have to start afresh. The more or less settled view at Boeing is that they should start replacing the 737 now. The debate is how to manage the transition. Again I think their preference is clear: they would prefer to stagger on with the 737 without major changes like new engines, until the new plane comes on stream. But this opens a potential gap that could hurt Boeing commercially. The internal debate is about how big this gap could be and how best to fill it.

    • I don’t think that is the settled view at Boeing. It might have been six months ago, but it is not now. By only doing the engines, Airbus has put Boeing into a difficult position. If they had done nothing, Boeing could have done nothing. If they had done a new plane (or engines, wings, and other tweaks), Boeing would have been forced to do the NSA. But now they are in limbo. While I think Boeing’s claims regarding the 737NG are so much balooney, the current version may just hold on, if discounted, and for no other reason than slot availability compared to the A320. But it’s value as cash-cow would be reduced to Boeing, and a critical time for financing a new plane programme, and customers maybe lost for good. Don’t underestimate that – Boeing lost United in a similar position, and I believe BA. The question is not just about how/if to fill the gap, but for how long the gap will last.

  10. Jacobin I mean the A320 NEO. I think there is more or less parity between the 737-800 and A320 (current). Soon winglets will cut a few percent from the fuel consumption and CFMI build a 15% more efficient replacement for the CFM56, the Leap.

    Boeing this week said the 737-800 is 2% more cost efficient and they’ll charge higher prices, for the slots after 2015 apparently. Comments like that make even the most blind loyal Boeing supporters look the other way, embarrassed.

    Stating cargo capability, noise, pollution aren’t worth anything is your personal opinion, I won’t comment on it. It’s your right to say/think that.

  11. Just a rough calculation, but if a new 797 costs $12 billion to develop and the bean counters want to recover the investment over the first 1000 frames, each frame will cost about $14 million more than a current 738.(Thats at 5.5% and no profit over five years))
    Not sure the market would wear that much extra, hence my belief in the 737RE

    • I think they will be looking at designing in cheaper manufacture. Stephen Udvar-Házy made some comments along these lines recently.

      • That plan worked so well on the 787. 😉 I do not believe that cheaper manufacture can shave 17% of the list price that easily.

      • Also they should sell more of the new planes at a higher price than they can get for the 737. I don’t get the impression that development costs are an issue for Boeing. The issue is maintaining sales. If airlines switch from Boeing to Airbus before the former have the new plane in place, Boeing will find it difficult to attract them back again. Type commonality as well as purchase rights on A320 Neos will keep then buying Airbuses.

  12. How would a large airline switch from a 737 type aircraft to the new 320neo? The majority of their crews would be 737 rated, and most likely not a lot of 320 FBW experience. Do they put a certain number of crews through training, and then put them on the flight line? This could mean two people up front with a lot of hours flying, but very little time on type.

    Can they bring in contractors to fill one seat, while the full time crews get experience?

    Thanks,

    Ken

  13. Does anyone know what the discount ranges are for Airbus and Boeing on a narrowbody? If the list price for a 737-800 is 80.8 million, what is the maximum discount that an airline can get?

  14. jacobin 777 “At first Boeing will not be able to get the run-rate as high as their current single-isle but they will darn make sure they have an idea of what their production capabilities will be. I also don’t believe they will have the same problems with manufacturing as they have had with the B787.”

    Do you believe this to be valid should final assembly, for whatever aircraft Boeing makes, not be in Seattle (Renton)?

  15. FF :I don’t get the impression that development costs are an issue for Boeing. The issue is maintaining sales.

    I think these are two sides of the same coin. In the short-term at least. Boeing needs to maintain sales to be able to fund development, since for most of this decade they will only produce heavily discounted 787s, so their cash-flow will have to rest on the 737NG and the 777.

  16. If Boeing do not re-engine the 737, look for a retrofit programme from someone.
    There are so many Classic and NG frames out there which will be available at bargain prices once 32xneo gets going, Putting new GTF or Leap on old frames plus cost of the adaption could look very tempting.
    The 737 does have a very useful stress life.

    • “The 737 does have a very useful stress life.”

      The recent run of PaxTin bursts may indicate differently?

      But nonetheless a move to look out for. Interesting.
      The last time that was done to 727s, right? Or are there other examples
      around for well sold types?

    • Wouldn’t that depend on engine availability? With probably thousands of engines to be produced for the new planes, will there be enough capacity to produce re-engines? Could this be an opening for RR? Do they have a product?

      • DC-8-70 was a Cammacorp program, independent of Douglas.
        727-200 Valsan, independent of Boeing.
        727-100 (UPS), Rolls-Royce, independent of Boeing
        Convair 540, Napier Eland, independent of Convair
        Convair 580/600/640 independent of Convair.

        Boeing 737 Classic was essentially just a re-engine program vs 737-200, which of course was Boeing.

  17. Thank you for your research Scott.
    A re-engine project could be tempting to someone like RR with one of the two offerings rejected by Airbus. I recall they had one two shaft and one three shaft they were pushing.
    I agree it would be a challenge to PW and GE in view of existing and projected commitment, but a half price 737 even with a few percent penalty over 32xneo could be very compelling.
    May be time for a bit of fun Scott by asking for suggested layouts for such a plane.

    I am no artist, but I believe a short root extension on the wing, just long enough to take the existing undercarriage canted downward and then the existing wing added with dihedral to give the necessary ground clearance could do the job Would look like a Vought Corsair from end on.

    As the RE would need a fairly major certification effort, the addition work to verify the modified wing would not be a show stopper.

    Just the sort of project for Keesje.

    Regards

  18. I’ve been reading some stuff about AA wanting all their orders delivered by 2015. If this is true(as I’ve only seen such claims on A.net), then why involve Airbus in the RFP at all? It makes no sense to go from a unified fleet to a split fleet of plans that are equal in performance specs. The order race as 737NG v. A320 makes no sense at all as there’s only one winner there. 737NG/whatever Boeing decides to do v. A320NEO makes more sense.

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