American Airlines order after-thoughts

It will take a while to absorb all the information that’s been released on the massive AA deal with Airbus and Boeing, and to learn data yet to come, but here are some initial thoughts:

  1. Airbus, of course, is The Big Winner, by every matrix.
  2. The huge order may resurrect Mobile (AL) hopes for an Airbus assembly line.
  3. Boeing suffered a huge psychological blow but remember: 200 orders and 100 options is nothing to sneeze at and it may be the biggest single order by units in Boeing history.
  4. American waited so long to renew its fleet that Airbus couldn’t have met American’s 5-year timeline anyway. A split order was inevitable.
  5. Boeing’s Renton factory is a huge winner. The 737 line will probably have to be expanded beyond the 42/mo already announced for 2014. There is room to do 20 more on the P-8A 737-based line.
  6. Boeing looks kind of silly in the context of the past year, where it dismissed the A320neo program and its own re-engining design.
  7. John Leahy, the Airbus super-salesman, looks pretty damn smart on two counts: going with the NEO and saying Boeing would re-engine.
  8. McBoeing strikes again. We’ll talk about this in a future post.
  9. The 787’s insidious affect on Boeing strikes again. See #8.

100 Comments on “American Airlines order after-thoughts

  1. 260 firm orders for Airbus plus 365 options!
    That is a MASSIVE victory for the A320 family at 737’s home turf.
    Boeing management took a big gamble claiming that the 737NG was capable enough vs the A320 but their 2nd biggest customer (after Southwest) brought them down to earth in a burning and crushing fashion.

  2. 3 year delay on 787 and 748 programs didn’t help NSA decision cycle time.

    If NSA had been a 2017 EIS, A320NEO woulld not have gained so much traction.

  3. Let’s see what the NSA will actually look like and cost. At the moment it appears to be a couple of pages of paper, and little else.

  4. This is NOT NSA, this is B737RE! NSA will not appear until 2025 now that B737RE is (unofficially) launched, probably later…

  5. Well the RE seems to be a couple of pages of paper, too. 😉

  6. This reminds me of the United and Airbus order all over again (on a major scale)…..Boeing DEFINITELY got a wake up call.

    I guess on the “good side”, with so many delivery slots for the A32X/A32XNEO taken (even with a further increase in production), Boeing will be able to sell a lot of the B737RE to potential Airbus customers.

    Regardless, congrats to Airbus. They saw an excellent opportunity and took it.

    • I highly doubt that, I think that the BusBoys will rise to the occasion and do whatever makes good business since to meet the needs of their customers, both current and new. It appears to me that this is something that they have been working towage for some time and I don’t think, unlike Big B they will let it slip through their fingers.

      • Well Jay, there is only so many slots available. Increasing production rates takes a while. Carriers will want to be sure they get delivery slots.

        I expect Boeing to get a few Airbus customers as well…unless Boeing is COMPLETELY incompetent, there would be no way they won’t get some Airbus customers.

        I guess we’ll have to wait to find out…:-)

  7. Down the road in a few months with additional orders comming, what will be the ability of these two companies to meet them? Several US airlines also need to update their aircraft fleet in the same time frame or close too that of AA. Can the supply chain keep up and as you said this pushes the new designes out to the right, real chess match is taking shape.

  8. Congratulations to Airbus, as they continue to run circles around the sales girls at Boeing. Boeing needs some real sales executives, these girls have been out manoeuvred by Leahy team on campaign after campaign after campaign – almost like they are blind while Airbus has a crystal ball.

    Albaugh – should be fired by Boeing’s Board of Directors – Paris was a complete disaster and now this, what next Southwest announce a fleet conversion? Delta, UA?

    and at the end of the day, the Boeing account manager let Airbus come in with the initial offer and did not sound the red alarm, and Boeing final offer was a vague, non board approved re-engine concept “that American intends to order”, that sounds like throwing a bone to the dog you just kicked out of the house.

    but this is 2011, and USA Fortune 100 Executives and their associated conflict of interest / personal network based board of directors can get away with complete incompetence, and get bonus checks and pay increases for such behaviour.

    The decline of the American business model… Airbus – a multinational consortium originally formed by four governments is running circles around what was once a crown jewel of American private Industry.

  9. One should note that American stated they have 130 (firm) 737-800s delivered or on the order books in addition to today’s announced order. Perhaps American’s fleet renewal requirements can not be met by either supplier alone, which puts fleet renewal pressure on the other US carriers. Backlogs are extending late into this decade and it opens opportunity to other manufacturers to enter the market. The real pressure is on the sub-suppliers (seats, galleys, etc.) and their ability to meet the growing demand.

  10. Amazes me Boeing kept thinking the 737 would be allright and the airlines would wait until 2020.

    All signs were red, the writing was on the wall, SW & DL got rude in 2010 already.. and I wasn’t the only one putting some oil on the fire last year.
    http://www.airliners.net/aviation-forums/general_aviation/read.main/4907469/
    http://www.pprune.org/tech-log/415510-us-transcon-757-replacement-new-a321-vs-737-900er.html

    Why did Pilarsky, Albaugh and McNerney stick to a story nobody else really believed? Maybe that’s why Randy stayed quiet lately? He had the hard numbers but they just wouldn’t listen after they saw some fancy windtunnel models at Langley ?

    • Because they want to litigate at least $17b out of Airbus for infair competition?
      here I would go against Napoleon and look out for some nefarious scheme
      instead of feeling asured of of full fledged dumb-, deaf- and blind-ness.

      A bit of Harry Potter : your killing me will kill you ;-?

  11. If Airbus were to move to 60/month for the A320 by, say, 2016, they would add 216/year (18×12) to their production capacity. That means 15 months would be required to produce this order, so even assuming they were completely sold out before the AA order, they would gain another 810 slots between 2016 and 2020. That would cover two more majors.

    • ..and it still wont’ cover the THOUSANDS of orders coming IMHO in the next 18-36 months as other carriers (both Boeing and/or Airbus exclusive) will want slots.

      This AA order really has “got the ball rolling” for other carriers.

  12. I honestly think you’re exaggerating. You forget that most airlines outside the US are not burdened with gas-guzzling legacy planes, so the incentive to replace their current planes is much less, and therefore the competitive pressure to do so is lower. The US legacies and smaller airlines between them maybe good for 1-2,000, including the AA order. But after that? Why would carriers such as LH or AF, or BA, with relatively modern fleets, and in the absence of the competitive pressure, just fall over themselves to place these orders? How many of these orders would need to be delivered in the 2016-2020 timeframe?

  13. AA has ‘full financing’ (100%) from lease companies for 5 years, until 2016. Beginning in 2017, it drops to 80%, and continues to drop after that. It looks to me like AA is going to lease all aircraft delivered between 2013 and 2017, or so. Then they could start getting B-737NEs and A-320NEOs, maybe. If there is another global financial meltdown in the second half of this decade, or the current financial meltdown continues until then (very possible if Obama wins reelection), then AA has dug itself into a debt hole they cannot get out of without filing for bankruptcy.

  14. @Andreas: UA, DL, WN and even US Airways alone will be >500-750. While LH has ordered some NEO’s, it doesn’t come close to their fleet size(and fleet age, especially for their A320’s). BA’s A32X are getting old(A320 fleet is >6 years and A319 fleet is >10.5 years, B737 fleet is >18 years), they have only 2 A320’s on order. AF has only 14 A32X planes on order, and their A32X fleet is up there with BA’s. Also, we’re talking 2019-2020/2021 time frame when many of their planes will be 20+ years old. Then there is FR, U2 and other carriers.

    I don’t think 2,000 orders for single-isle planes is too much of a stretch in the next 2-3 years.

    Regards..

    • Sorry, I don’t buy that. None of this indicates to me the need for thousands of additional slots in the time up to 2020. BA’s A319s will be >20 years in 2021. The A320s will be >20 years in 2025. The same then seems to apply for AF. FR and U2 both will have planes around 20 years old in the first half of the 2020s, since their big orders post-date 2001, and they are still taking new planes from these orders. Why would they order again now, especially since it is unlikely that they’ll get good pricing? I give you the US legacies and the 737 classic fleets of BA and LH (although size-wise I see both of them as C-series or Embraer candidates, and both BA and LH already operate the Embraers and LH has the C-series on order). So for the European majors I really don’t see it before 2020, and many of the smaller players have already started ordering to roll over their fleet. And if both OEMs go to 60/month, that’s a cool 1,440/year they’ll churn out between them, against very few booked slots to the right of 2020.

  15. AA order was quite a big blow to Boeing, However it is alarming them that your current product does not suit the market at this time and they have to do something before it is too late. No doubt Boeing is not leading the aviation industry at this stage anymore, most of their set up is deteriorating. I think NSA plane will be postponed for the time being, I doubt it will enter the market before 2025 which will be a good time for Boeing to think about it.

    • With the exception of the Dash-80/KC135/B707 Boeing was more pushed
      by customers and the competition than anything else.
      The Dreamliner tried to repeat the mechanics of the Dash-80 but fizzled.

      • Don’t forget the B-747. It was not a ‘push’ from customers, Boeing bet the company on it, just like the B-367-80/KC-135/B-707/B-720.

        Like with the B-707, Boeing got a small order from PA to luanch the B-747. IIRC, for the B-707, PA ordered 15 airplanes with 10 options. For the B-747, PA ordered 25 B-747s, and no options.

        • 737 ( LH), 747 (PanAm) were started of by clear definitions and urgent
          interest from customers.
          Boeing would not have had the idea on their own.

  16. All the Boeing bravado & hot air & pricing has come to nothing as it appears the AA order for Boeings is compensation & won based on early delivery dates, Boeing must be quivering in their boots wondering what the other US domestic carriers will be thinking when they come to replentish their fleets.

  17. 737 RE is very far from EIS. And for Boeing, it’s gonna be a very tough choice: either an efficient engine with a big fan, but much more work and associated bucks ; or else a smaller fan, less work and less bucks, but also a much less attractive A/C altogether…. Boeing’s very hard times are far from over….

    • I didn’t know the A32XNEO was flying next week.

      Boeing has the “luxury” that the bulk of the B787 and B748 work is finished. Airbus has to deal with the A350XWB ramp up and we are already seeing ‘hiccups’.

      • The B787 ramp-up is finished? That must be a relief to hear for Boeing. You should tell them. 😀

        They’ll also have the 787-10 to work on (unless they want to leave Airbus with a stranglehold on that part of the market in the form of the A333), and consider what to do with the 777. Yeah I know, it’s such a great airplane, it’ll hold its own against the A351. I am sure in Boeing’s world, the 777 of today is at least 2% more efficient in cash operating cost than the A351, and that gives them pricing power, and they can just leave it to sell with nothing but business-as-usual upgrades until they bring out the NLA (new large airplane) in 2025. In fact, they can double the production rate, because they know they can sell them. And if that sounds familiar, that’s because it is.

  18. What about the C-series? Time to get on that C150 pronto.

    Did American and Delta have 3 flight attendants on the 738 when it was at 140 passengers?
    This order looks like a shift up from the MD80 in that most all of these planes will be in the 150 to 200 passenger range. United and Delta seem to be heading in to this size distribution as well.

  19. Yes, the McDonnell Douglas Management behind Boeing guys annonce some durable decline in strategic vision for the old lady of Seattle… This is the major fact in the news of AA today…

  20. And yes, the time is perfect for Bombardier for now and futur matrix in NB ! Time to design the CS500 with airlines to produce the only real and credible airplane in NB segment. Don’t worry about production problems: Guy Hachey, CEO of Bombardier Aerospace is ex-VP Production of Delphi…an experimented guy…

  21. Funny how things turn out…
    Company CEO Jim McNerney said “If we could come up with the right airplane in roughly the 2019, 2020 timeframe,” says McNerney, “I personally feel that there’s a strong argument that the market will wait for us.”
    http://www.flightglobal.com/articles/2011/02/04/352779/source-boeing-looks-to-2012-to-begin-737-upgrade-designs.html

    And yet Albaugh flies into a meeting with AA, while telling the media “we will do whatever AA wants” and offers them 737RE on the spot!

    I don’t think there is any denying that Airbus is a major winner here. Against all odds and particularly TopBoom’s prediction 🙂 they manged to get NEOs into what seemed like an impenetrable fortress that is AA. Boeing’s press release mentioned that the re engine order ” is the first of many anticipated for this variant”, that’s quite a statement considering that apparently none of their customers wanted it… Boeing’s attitude was as frustrating, for the past 18 months, as Airbus’ was after the launch of the 787, particularly when Forgeard embarrassed himself by calling it a ‘Chinese copy of the A330′.

    jacobin777
    “Boeing will be able to sell a lot of the B737RE to potential Airbus customers.”
    But Airbus’ strategy was precisely to counter this by equipping their customer base with NEOs, now they are after Boeing’s pie. And all we heard from the skeptics was those who bought NEOs would have bought OEOs anyway…

    “2. The huge order may resurrect Mobile (AL) hopes for an Airbus assembly line.”
    That would be an *extremely* interesting development. Is there any info behind that or just wild speculation? What is the max production capacity available to Airbus across the three FALs?

    • UKair
      Airbus has five active FALs for the Single Aisle family: One in Toulouse, three in Hamburg (2 “old” ones and a new one) and one in Tijanjin (exact copy of the 3rd, and newest FAL in Hamburg). As stated by Tom Enders somewhere, the supply chain is the bottleneck, not the FAL capacity. I agree, it will be indeed interesting to know, where the actual FAL limit is.

      • CRORpower,
        I know the supply chain the bottleneck but I was after the theoretical max production capacity…
        Interesting alias you have… anything to do with the -600 flight test? 🙂

      • CRORpower :
        UKair
        Airbus has five active FALs for the Single Aisle family

        For me XFW is just one big FAL, hence I referred to them as ‘three FALs’ 🙂

    • …and they have to defend their own pie as well…..NW’s B787 order and AC’s B787/B777 are just a couple of examples.

      Carriers now know what to expect from Boeing. AA was really the first customer which relied on Boeing to purchase the NEO and AA’s situation is unique. The needed a lot of planes and fast.

      • NW/AC isn’t an example, Boeing had a new product against Airbus’ A330NEO by which time it lost a major QF order to Boeing. Unless we see another AA scenario, I doubt there will be defections to 737RE. Anything is possible, of course, but I doubt it.

  22. “2.The huge order may resurrect Mobile (AL) hopes for an Airbus assembly line.”

    I doubt, even with AA’s huge order for A-32Xs that is enough for EADS to build and open the plant in MOB. Now if DL, UA, and WN follow AA’s lead, that is a whole different story. Boeing already has a 3rd B-737 line available, the P-8A production line that could push out 20 B-737s per month.

    • Well obviously not simply because of the AA order. I have a feeling that we will see other majors bringing their plans forward, particularly United. Wasn’t their RFP launched last year? I am absolutely sure that Airbus, in answering that RFP, would have pre-booked some early slots for them. I think we will see some major order still to come in 2011.
      In theory Airbus could have 1 FAL serving the Americas, 1 serving Europe/ME and 1 serving China/Asia. What an interesting prospect…

    • 260 a/c x 35(?) MUSD ~ 9 BUSD. What does a FAL cost?
      I think China got one for a 150 a/c order – and this 260 comes from only a single player in the massive US market. Also, American made a/c will be easier to sell to non-US customers that chinese a/c no non-china customers (though the Euro Unions might have something to say about that)

      The FAL is very possible to me, the question is only if Airbus wants it or not.

  23. UKair :
    CRORpower,
    I know the supply chain the bottleneck but I was after the theoretical max production capacity…
    Interesting alias you have… anything to do with the -600 flight test?

    No, I have nothing to do with that flight test. I mulled over “KC45BetterBoom” or something like that, found that too offensive and thought “CRORpower” is not so bad as an alias. 😉

    • “-600 flight test”

      Could someone enlighten me as to which plane is referenced here, please?

      • I think to something upcoming in the future, but then, the number is wrong. But that is not of my business and if, I would not post it here 😉

        • So you think -600 is only .666 of what you think is the real number ?

          Number of the Beast 😉

        • So, you think that -600 is only .666 of what you think the real number should be?

          Number of the Beast, hehe 😉

      • Uwe :
        So you think -600 is only .666 of what you think is the real number ?
        Number of the Beast

        not .666 but .5 of that number… 😉

  24. This little tib bit of wisdom from Jerome;

    “737 RE is very far from EIS.”

    I case you didn’t notice, so is the A-320NEO. It looks like the A-320NEO EIS is 2016, and the B-737-800NE is 2017.

    UKair :Well obviously not simply because of the AA order. I have a feeling that we will see other majors bringing their plans forward, particularly United. Wasn’t their RFP launched last year? I am absolutely sure that Airbus, in answering that RFP, would have pre-booked some early slots for them. I think we will see some major order still to come in 2011.In theory Airbus could have 1 FAL serving the Americas, 1 serving Europe/ME and 1 serving China/Asia. What an interesting prospect…

    Don’t you think Boeing would have ‘pre-booked’ some NB slots for UA, too. Isn’t that pretty standard practice for both OEMs?

    • KC135TopBoom :
      It looks like the A-320NEO EIS is 2016, and the B-737-800NE is 2017.

      The EIS for NEO is 2015, this was pointed out several times to you previously.

      KC135TopBoom :
      Don’t you think Boeing would have ‘pre-booked’ some NB slots for UA, too. Isn’t that pretty standard practice for both OEMs?

      I am sure they pre booked them but it wouldn’t have been for an RE last year would it? I have no doubt they pre booked AA as well, looks like a lot of those slots are free now 🙂

      • I am sure KC knows that the neo enters into service in 2015.
        But it is his SOP to always add a couple of years to the Airbus delivery times and shave a couple from Boeing’s.
        It is what floats his boat and makes him feel better about things.

  25. Scott,
    What about about all A320s being equipped with Sharklets? I have not read this from the AMR press release but from the Airbus one:

    ‘Airbus and American Airlines, a wholly-owned subsidiary of AMR Corporation, have signed a firm contract for American to acquire 260 modern, fuel-efficient Airbus A320 Family aircraft. The contract calls for flexibility for the airline to take delivery of A319s, A320s and A321s, with 130 featuring Airbus’ New Engine Option (neo). All 260 aircraft will feature large, fuel-saving wingtip devices known as Sharklets.’

    http://www.airbus.com/newsevents/news-events-single/detail/american-airlines-acquires-260-airbus-a320-family-aircraft/

    That may have played a role.

  26. 460 orders and 465 options, that’s got to be some kind of record. Don’t you get a free 748 and a 380 when you order that many planes at once?

  27. UKair :
    NW/AC isn’t an example, Boeing had a new product against Airbus’ A330NEO by which time it lost a major QF order to Boeing. Unless we see another AA scenario, I doubt there will be defections to 737RE. Anything is possible, of course, but I doubt it.

    The only thing certain in this industry is change.

    As I’ve mentioned previously, only time will tell..

  28. KC135TopBoom :This little tib bit of wisdom from Jerome;
    “737 RE is very far from EIS.”
    I case you didn’t notice, so is the A-320NEO. It looks like the A-320NEO EIS is 2016, and the B-737-800NE is 2017.<

    Well the shock of how absolutely wrong you were about this order lasted only long enough for you to not submit a comment on only one of Scott's posts. Now you are back in form again.

    Let's look at the facts, shall we.
    Airbus has been seriously working on the NEO for close to a year now and had an official go ahead, with a specific plan, around 6 or 7 months ago.
    Boeing has been poo-pooing a re-engine option and has seemingly (by their own comments) put significantly more effort into a new NB, rather than aforementioned re-engine.
    It is only now that Boeing has gotten around to "selling" a 737 RE to AA (how do you sell something you don't even have on offer yet and what sort of guarantees or walkaway clause does AA get for taking this rather unprecedented step?).
    The configuration of any "potential" 737 RE is far from fixed (super small fan diameter with no change to landing gear/slighter larger fan diameter with minor change to landing gear/full size fan diameter with major change to landing gear etc).
    As the engine manufacturers are fully committed to working on the NEO, C-Series and COMAC aircraft, how much effort will they be able to put into developing what would amount to be an all new engine variant for Boeing? How long would that take and what are the risks (performance)? (Okay the blurb about the engine manufacturers is not fact but is a great big factor to consider.)
    What Boeing has offered to AA has not yet been authourized by the Boeing Board of Directors and there is no guarantee that they will approve this in August.
    All of this points to the fact that any RE from Boeing is much further away than the NEO and I personally believe there will be more than a year's difference in EIS, probably closer to two.

    I implied that to mean that Airbus would have a NEO in service more than a year before a 737RE but with these 2 companies these days, who really knows?

  29. The A320NEO EIS is scheduled for Oct 2015. Look it up on the Airbus website. If 2017 for the 737RE is not going to mean 1 January, I’d make that up to 2 years difference. Unless of course 2016 is still in the running. Nevertheless, Boeing claims to have it all sorted out, bar the minor issue of fan size. How trustworthy this is I guess depends on which Kool-Aid fountain you are drinking from.

    http://www.flightglobal.com/articles/2011/07/20/359751/final-737-re-engine-configuration-down-to-four-possible-fan.html

    • As the NEO is a minimum change re-engining, the engine availability is the bottleneck. The “earlier” 2015 EIS puts pressure to the engine manufacturers, not to Airbus. The principal aim for Airbus is, not to jeopardize the smooth, well oiled “manufacturing machine” with many configuration changes. Boeing fanboys should look for ethe engine OEMs to identify EIS problems… oh, that would affect the 737RE as well… at least for the LEAP…. 😉
      The comin years will be most interesting and most entertaining as well. 🙂

  30. I am very intrigued as to how the 737Re will be able to compete with the neo while having a 12″ smaller fan!
    Their difference in fuel burn will be massive!

    • I think that is highly simplistic. An airplane is a system, and its efficiency is based on the interaction of the parts. There isn’t a magic bullet. The 737NG has a number of things going for it. Newer wing, lower weight, lower drag due to smaller fuselage. While both will add weight with the re-engine, the delta will probably remain in favour of the 737NG. The 737NG was competitive until Airbus changed the engine – now it will also change the engine, and unless the GTF comes out massively ahead of the CFM LEAP (and the sales numbers say it won’t), then it stands to reason that the NEO will not have the slam-dunk advantage it currently enoys over the 737NG. Both OEMs will move back towards equilibrium, but with the advantage of the short period of dis-equilibrium being firmly with Airbus. They killed the NSA, they broke into AA, and they locked in several of their core customers for a very long time. Boeing on the other hand got nothing out of it. That’s embarassing, but it won’t kill them anymore than Airbus got killed by going through variations of the A350.

    • I would say, not massive, but significant nevertheless. The two planes come from an equilibrium. The A320 has a greater scope for improvement (bigger engine fan; addition of winglets that the 737 already has; although the GTF option is less popular at the moment it will probably be more efficient than LEAP). With the RE, the 737 will move from being well behind the A320NEO to being slightly behind overall in the medium term, although there will be some models and missions where it will be ahead. Boeing’s aim with the RSA was to trump Airbus in the longer term. I think that’s still a live issue.

  31. Uwe :737 ( LH), 747 (PanAm) were started of by clear definitions and urgentinterest from customers.Boeing would not have had the idea on their own.

    What relevance do events 45 years ago have to today? The name and location is the same. The company ain’t.

    • Hmm, that the company never was really that much different from today?
      i..e. much less the big innovator driving the industry than a lot of people
      like to paint it?
      I see more similarities to Microsoft than any of the other airframers.
      Someone at Boeing read and _understood_ the german Aero research
      papers after WWII. That gave an initual boost, but successfull for the long
      run more due to managing the market than really innovating ( just like M$ ).

    • @Keesje, you keep stating the same thing over and over again. If one goes only on your metrics, then the current iteration of the A32X would be crushing B737NG sales. After all, the current A32X uses a larger engine fan than the current B737NG and has a significant sfc advantage.

      Until this year with the introduction of the NEO, the sales between the two basically have been running “neck-on-neck” the past few years.

      The market has clearly stated you are incorrect. No matter how many countless times you come out with the same comments.

      • Quite right. If Boeing can do a ‘simple’ re-engine with no need for other major systems upgrade, then it will continue to have a competitive 737 for sale. It maybe less profitable, since I doubt that CFM would pay Boeing much if anything for developing the RE, but otherwise they should do just fine.

      • sfc and other hard merchandise property aren’t the only forces in the market.
        Price, marketing fibs, availability, location, patriotism ,political pressure and some further degrees of freedom comprise the complete vector field..

      • Funny Idea…. I know the Bremen guys are very proud of their VWF614 but it was so ugly!
        I have found an interesting presentation about engine integration (from 2000, and mostly pictures). The presentation was done by an engineer from the Airbus design office in Bremen. This explains the overly positive assessment of an engine installation on top of the wings. My own view is a little bid different: He forgot to add following points
        – destroys airflow at a crucial part of the wing
        – Particular Risk: Uncontained Engine Rotor Failure (it happens)
        – bad position for maintenance
        – unpleasant view for pax seating next to it
        – near field noise (cabin)

      • CRORpower :
        Funny Idea…. I know the Bremen guys are very proud of their VWF614 but it was so ugly!
        I have found an interesting presentation about engine integration (from 2000, and mostly pictures). The presentation was done by an engineer from the Airbus design office in Bremen. This explains the overly positive assessment of an engine installation on top of the wings. My own view is a little bid different: He forgot to add following points
        – destroys airflow at a crucial part of the wing
        – Particular Risk: Uncontained Engine Rotor Failure (it happens)
        – bad position for maintenance
        – unpleasant view for pax seating next to it
        – near field noise (cabin)

        @UWE: Forgot the link in my post:
        http://www.fzt.haw-hamburg.de/pers/Scholz/dglr/hh/text_2000_04_13_Triebwerke.pdf

    • CFM engines for the two aircraft (A320NEO and 737RE) will NOT be identical, even if both are called LEAP.

      LEAP is a FAMILY of engines. Since the 737RE variant has a smaller fan, it will be optimized accordingly, e.g. the low pressure system (spool) will be completely new. A very relevant comparison is the GEnx-family. It currently has two memers, -1B and -2B. The latter is the latter sibling, built on the CORE of the -1B with a smaller and revised low pressure turbine to match. There are not many parts from the -1B in the -2B LPT (even the numer of stages are different). The frames in the engine will also be different, and the TRF (turbine rear frame) is made to match the LPT.

      The -2 engine also had a new FHF (fan hub frame) planned, but in the end kept the one from the -1B since there was not sufficient time to re-design a new one. There was a weight penalty, but likely also some cost savings due to the same design being used.

      As I wrote in another post last weekend (look it up and read it, it contains some good arguments I think), the frames are long lead time items and some production bottle necks do exist…

      So, the 737RE engine will need additonal engineering to avoid using the systems designed for the higher BPR A320NEO, which wold make the 737RE engine somewhat compromised. Instead it needs purpose designed systems to make a optimum engine, not least from an engine weight perspective.

      A last comment: sfc/fuel burn and BPR are closely related , up to a point where additional nacelle drag etc start to increase more than the increased propulsion efficiency, currently around BPR 18 IIRC. After 18, additional nacelle tech can/needs to be introduced to conteract the drag etc.

  32. I cannot see any engine manufacturer getting too excited about producing a smaller and cheaper engine when they will reap the benefits of selling a bigger engine to Airbus for the same application.
    If it is true that the GTF has a margin on SFC, it is likely they will reveal their hand if GE keep up the current momentum.

    • I don’t understand. CFM will own the 737RE market, but split the Neo market with Pratt. Why wouldn’t it see 737RE as a good thing?

      • I’m sure they would. But why would they pay Boeing to develop that plane when Boeing is desperate to have it developed for its own reasons? They’d still own the 737NG residual market, and would have a good shot at buying a place on the NSA.

      • A single source re-engine is hugely in GE/CFM’s interest. It means they get 100% of the 737 sales for the forseeable future. Otherwise they have to compete with Pratt for A320 NEO sales and almost certainly have to do the same with the NSA. They can charge more for the 737 engines, compared with the A320 versions. They maintain their strategic relationship with Boeing. I would be dumbfounded if Boeing didn’t extract a large part of the development costs out of GE.

  33. FF :A single source re-engine is hugely in GE/CFM’s interest. It means they get 100% of the 737 sales for the forseeable future. Otherwise they have to compete with Pratt for A320 NEO sales and almost certainly have to do the same with the NSA. They can charge more for the 737 engines, compared with the A320 versions. They maintain their strategic relationship with Boeing. I would be dumbfounded if Boeing didn’t extract a large part of the development costs out of GE.

    I’d be dumbfounded if they did. Let’s hope we find out one day.

    • I agree Boeing’s negotiating position isn’t as a strong as it could have been. But it does have cards to play. As the Mexican stand off between GE and Airbus over the A350 has already shown, airframers are in a stronger position than engine manufacturers because they control access to the program. GE really, really won’t want to offend Boeing. There are some prices that will be known to the players: What GE/CFM have paid for previous Boeing programs. What they paid to Airbus for access to the NEO program. My guess is that negotiations would start at about twice the NEO amount, with a haggle over the value of exclusivity.

      But as you say, it’s speculation.

    • CFM is going to be making a huge amount of money selling Leap-X engines on a Boeing platform, and if they balk at helping with the program, Boeing has an alternative maker waiting for a change to jump in. The engine guys know they’ll make back the investment from future sales. It would be odd if CFM tried to put the screws to Boeing.

      • An alternative maker with considerably higher risk. It really isn’t all take-it or leave-it for CFM. Also, they would have to pony up considerably more money for the RE in order for Boeing to come out at the same point as Airbus does on the NEO, since there i) the overall amount was lower, and ii) PW shared in shouldering it. So even if they pay, Boeing will almost certainly have to pay more for the RE than Airbus did for the NEO.

  34. We’ve been predicting that AI would launch NEO and Boeing would have to respond with 737RE for about two years now (see letters, http://www.aisi.aero).
    Many valid relevant points have been made here, but the clincher is that the new engine(s) advanced enough for an all new NB, the aircraft Boeing really wanted to offer, will not be available until some time after 2020. My guess is about 2025.
    The NEO, and now the RE will use first generation GTF and LEAP-X technology, not good enough for an all new aircraft by a considerable margin. But we need those first generation engines in service to provide the platform for the second generation. It will be quite a challenge to match the on-wing reliability of today’s engines, without over-reaching to a second generation.
    Airframes are designed to fit available engines, not the other way around.
    But, having done a hatchet job on the NEO economics with onageristic analysis, it will be interesting to listen to Boeing explaining to its stockholders and analysts why they are building an aircraft with only 3 – 5 % operating cost improvement.

    • “onageristic analysis”

      nice term 😉

      “.. Boeing explaining to its stockholders and analysts ..”

      No problem. Stockholders ( viewed as a swarm beast )
      wake every morning with a clean memory.

      Boeing understands this and leverages it to perfection.
      A Shareholder Value Show with a sideline in hardware.

  35. This little tib bit of wisdom Aero Ninja;

    “Well the shock of how absolutely wrong you were about this order lasted only long enough for you to not submit a comment on only one of Scott’s posts. Now you are back in form again.”

    What are you talking about? I have responded to each and every topic from Scott that I know of.

    Andreas :An alternative maker with considerably higher risk. It really isn’t all take-it or leave-it for CFM. Also, they would have to pony up considerably more money for the RE in order for Boeing to come out at the same point as Airbus does on the NEO, since there i) the overall amount was lower, and ii) PW shared in shouldering it. So even if they pay, Boeing will almost certainly have to pay more for the RE than Airbus did for the NEO.

    How do you know that? The B-737NG wing/wingbox does not need strenghtening. and the 66″ fan CFM-LEAP engine will weigh less than the 80″ (or so) fan LEAP on the A-320NEO. Also, the B-737NG already has blended winglets, the A-32X won’t have them until next year, or 2013.

    • How do you know that?

      he,
      Well TopBoom that one is easy,
      while you empty the Cool Aid Can
      we dring from the fountain of wisdom :-()))

  36. The B-737NG wing/wingbox does not need strenghtening. and the 66″ fan CFM-LEAP engine will weigh less than the 80″ (or so) fan LEAP on the A-320NEO. Also, the B-737NG already has blended winglets, the A-32X won’t have them until next year, or 2013.

    Well, if it is just swapping in another engine Boeing would have done it long before
    the Airbus NEO came to market.
    Common wisdom here ( from that other fount ) is that any significantly improved engine
    will be expensive to fit for Boeing.
    Already having winglets ( added to just stay on par with the A320 ) means that
    “adding winglets” is no longer available to Boeing as a wayside gain.

    Boeing has an expensive upgrade ahead but works against a hard ceiling on pricing.
    I can full well understand why Boeing was very keen on avoiding to take that pill.
    they will loose money just for staying competitive with Airbus.

    • Are you re-writing history? The B-737NG was ‘on par’ with the BEFORE the BWL were offered, first as an ‘option’, then as ‘standard equipment’. IIRC, the first airline to order the, then, optional BWL was TZ on their 2000 order for the B-737-800NG.

      Airbus played with winglets on the A-320 back in 2007 or 2008. I seem to remember them saying there was just minimal improvement, but not worth developing for the A-32X. No, they have them back, not as winglets, but as ‘sharklets’.

      Uwe :How do you know that?
      he,Well TopBoom that one is easy,while you empty the Cool Aid Canwe dring from the fountain of wisdom )))

      Is Juan Ponce de León still looking for that “Fountain of Youth” in Florida? Did EADS build it yet?

      • NG sans winglets on par with contemporary A320?

        OK, in your timeline were the coming NEO derivative will marginally siddle up in performance to the current day
        NG that may be true.
        Unfortunately the physics in this timeline here are different.

  37. @Andreas….

    There is a difference between “ramp up” and “bulk of the work completed”. Aspire Aviation reports the B789 is coming along quite nicely.

    http://www.aspireaviation.com/2011/07/11/boeing-787-a-dream-almost-come-true/

    “Aspire Aviation has learned one important contributing factor to Boeing’s optimism in the payload/range performance, as well as the superior fuel burn performance of the 787-10X is the weight reduction opportunities being realised on the 787-9, which Aspire Aviation‘s source says is “moving ahead of the curve” with little to no overweight issue.”

    Also, you only mentioned the B787…I’m glad you conveniently didn’t mention my comment about the B748.

    Yes, Boeing will work on dealing with the A351. Now that they have decided to go with a B737RE, they will have more resources on that end.

    Airbus has openly stated they need resources pulled from various programs to deal with the A359XWB.

  38. KC135TopBoom :This little tib bit of wisdom Aero Ninja;
    “Well the shock of how absolutely wrong you were about this order lasted only long enough for you to not submit a comment on only one of Scott’s posts. Now you are back in form again.”
    What are you talking about? I have responded to each and every topic from Scott that I know of.

    Well I don’t see your moniker anywhere on the post that actually announced the orders: http://leehamnews.wordpress.com/2011/07/20/american-orders-airbus260-boeing-200/

    I know it must have all been a bit difficult to accept that Boeing had really made a mess of this one.

    I actually still wonder what Boeing had to promise AA in order to get them to throw Boeing a bone.

  39. “@Keesje, you keep stating the same thing over and over again. If one goes only on your metrics, then the current iteration of the A32X would be crushing B737NG sales. After all, the current A32X uses a larger engine fan than the current B737NG and has a significant sfc advantage.”

    As you know, the BPR difference between 737NG and A320 was marginal.

    If Boeing does a 68 inch LEAP vs a A320 NEO 80 inch, that is anot a marginal difference. At the Sharklets & the writing is on the wall. AA’s order is a reflection of that.

    Btw I’m relieved Boeing goes re-engining on the 737. If they went for a Dream797 in 2020 Airbus would have ruled this decade in an unhealthy way, building up a pile of money to launch a “lessons learned” more mature A30X, EIS 2024 after building 4000 NEOs. It’s seems that risk has diminished now.

  40. I believe Boeing and CFM/GE are looking at a 66″ fan version of the LEAP engine. The current CFM-56-7B engines on the B-737NG have a fan of about 61″.

    The AA order looks like both Boeing and Airbus offered delivery slots in 2013 for the current versions of the B-737NG and A-32X.

    Does anyone know if the A-32Xs delivered before 2015 have sharklets, or standard wingtips?

  41. So what happened to the “delay tactic not announcing anything by Boeing was a brilliant masterplan to get Airbus roped into the NEO so they wouldn’t back out, after which Boeing would magically launch the NEO killer using some magical technology that somehow Airbus doesn’t know about because the Boeing engineers are just sooo much smarter”. Gotta love the idiot’s/fanboy thought process.

    Wonder what we’ll see next, maybe Boeing not yet firming up the RE design is another masterplan and when they do firm it up, it’d be with some magical new engines that’ll also kill the NEO.

  42. BTW- I’ve been told by knowledgeable people that ‘ sharklets’ or winglets work better on ‘ short range’ commercials and ‘ raked wingtips’ a la 787 work better than sharklets or winglets on long range high altitude cruise commercial routes.

    Then there are the spiral- lets by aero partners . . .

  43. CRORpower :
    Funny Idea…. I know the Bremen guys are very proud of their VWF614 but it was so ugly!
    I have found an interesting presentation about engine integration (from 2000, and mostly pictures). The presentation was done by an engineer from the Airbus design office in Bremen. This explains the overly positive assessment of an engine installation on top of the wings.

    got a link to that presentation?

    My own view is a little bid different: He forgot to add following points
    – destroys airflow at a crucial part of the wing

    blown wing? And the Honda Jet has about the same arrangement.
    ( Honda advertised this as their new and personal invention 😉

    — Particular Risk: Uncontained Engine Rotor Failure (it happens)

    better loose some pax than the whole wing 😉

    – bad position for maintenance

    Hmm, stand on the wing, work at eye level.

    – unpleasant view for pax seating next to it

    sets a task for the marketing people. ( keeps them away from other dumb ideas 😉

    – near field noise (cabin)

    Yes. But modern engines are so much quiter.
    And it would perfectly tide over the 737 dachshund legs. ( Maybe even shorten them a bit?)

    • I forgot to list the link and my re-post is “under moderation” (I will not post it again, to avoid the same problem with this reply: You can find it on the DGLR pages for Praxis-Seminar Luftfahrt, 13-04-2000, Triebwerksanordnungen bei Transportflugzeugen )

      You are from Bremen, aren’t you? 😉

      A blown wing works different, not like the VFW614 or Honda Jet.
      To stand on the wing should be a plus for maintenance? 😮 …. you really must be from Bremen…. Standing on the ground, working at eye level is better in my opinion. Furthermore, you can de-install the engine much more easily when they are under the wing.

      Remember the Airbus Intelligence Presentation, unfortunately unveiled by Jon Ostrower? There, a missing window due to riser ducts in the 787 were presented as a big minus for the pax who sits right there. An engine is even worse. Further… I feel very uncomfortable to sit in the possible trajectory of rotating parts. Even if the probability is 10^-9/FH … To task the marketing department is a “no argument”…. thus a funny one…

      • Bremen?
        No, but they have the Key to the place were I was born 😉
        These days i live in Angeln with a view over Germany’s only
        fjord.

      • apropos, found it : There be Monsters!

        blown wing ~= vfw614. yes I am aware of that.
        ( all a bit tongue in cheek, actually. )

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