Delta 737-900 order bypasses re-engine

Here is a story we did for Commercial Aviation Online:

Date: 26/08/2011 13:37
Source: Commercial Aviation Online
Location: Seattle
By: Scott Hamilton

Delta Air Lines’ order for 100 Boeing 737-900ERs is a major boost to this model, but does nothing to add to the 737 re-engine programme.

The airline’s original request for proposals, issued early this year, came well before Boeing decided to go forward with the 737 re-engine and accordingly, the airplane was not included in any proposal from Boeing to Delta or in any analysis after American Airlines placed the launch order in July.

While there had been some expectation among Wall Street analysts that Delta would at the least have conversion rights in the contract to allow some deliveries in the 2017-2018 period of the 737 re-engine, CAO has confirmed with two sources that there is no provision. Delta would be taking too few airplanes in this period to be allocated valuable launch customer/launch operator delivery slots, according to one person familiar with the situation. Although American provisionally ordered 100 737REs, it does not want to be the launch operator and has slated first deliveries in 2018.

Boeing needs a substantial launch operator before the board of directors will authorise launch of the programme. The board is expected to approve authority to offer (ATO) at its meeting Monday.

Southwest Airlines and Boeing are in negotiations for a launch order with launch operator status. Southwest previously was the launch customer and launch operator for the 737-300, -500 and -700.

Credit Suisse’s aerospace analysts, in a note issued 25 August, believe the Boeing board will authorise launch of the 737 re-engine at its October meeting, following a commitment by Southwest.

Credit Suisse, and CAO’s sources, said one of the factors that tipped the Delta order to Boeing was the availability of production slots vis-à-vis the Airbus A321. Delta wants all the airplanes delivered by 2018, a requirement Airbus could not meet, it was believed, without massive overbooking its delivery positions and the risk that either the skyline could not be moved around sufficiently or production could not be ramped up.

“Airbus has racked up 995 net orders YTD (96% narrowbody), well ahead of Boeing’s 276 (62% narrowbody),” Credit Suisse wrote in its 25 August note. “To date, the 737-900 model has not sold particularly well and represents just 10% of 737 backlog. Airbus’ narrowbody backlog is 1.4x Boeing’s, so delivery availability was likely key.”

24 Comments on “Delta 737-900 order bypasses re-engine

  1. Scott, something no one has mentioned is that the reason Boeing had slots for Delta was because Delta already had options and rolling options for 70+ 737NG aircraft in the 2013-2018 timeframe as part of its previous big Boeing order.

    In a sense, that order from the ’90s gave Delta the flexibility to get these airplanes fast and probably sealed the deal for Boeing.

  2. Keeje, it looks like WN will be the launch customer, and probibly UA, too. No one has really talked about the upcoming UA NB order much. Then again we haven’t talked much about the WN order, either, except the possibility of them ordering the NEO a while back. Now, that possibility looks less likely.

    So if WN does become the B-737NE launch customer in the next several months, with the first delivery in 2017, that could put it on about the same schedule as the A-32X-NEO(LEAP). Roll-out for both could be around 2015Q4 to 2016Q2, the rest of 2016 for flight testing and supplemential certifications by 2017Q1 or 2017Q2 and first deliveries, of both airplanes, in about 2017Q2 or 2017Q3.

    Of course this all depends on the timeline developement and build-up for the NEO-LEAP and the 66″ fan NE-LEAP engines.

    Imagine the “discussions”, on, between Boeing supporters and Airbus supporters while having dueling roll-outs, flight tests, and deliveries?

  3. With the Delta order, the 900 series backlog went to 15%, even with the 700. Looks like a trend to the larger low CASM models. More A333 orders, Continental’s conversion of 800s to 900s, Southwest’s order for 800s, and Delta stocking up on 900s.

    Will Southwest keep buying 700s or opt for a larger variant if they launch the 737RE?

  4. Historical late EIS dates & missed performance parameters have made carriers justifiably apprehensive in signing up as a launch customers, of the last three major projects 380, 787, 7478 emerging from the duopoly all have been absurdly late with the latter two additionaly struggling to overcome performance issues, clearly not the way to rebuild industry confidence as SIA, Cargolux & Lufthansa will testify too.

    Your correct, this is a major boost for the 900ER other than earlier availability & with no conversion rights Delta must have a valid reason for for accepting the NG so late in its project life that escapes me, The projected date for completion of this order means competitors may well be flying either of the proposed NEO options before this order is completed, seemingly putting Delta, at an economic operational disadvantage for well in excess of a decade

    • Phil, I agree the A-380, B-787, and B-748 were all very late, but what performance issues are you saying the B-787 and B-748 have? The only issues are the garunteed performance difference between the RR Trent-1000 Package 1 and Package 2 versions, and the GEnx-1B (B-787) and -2B (B-747) PIP1 and PIP2 versions.

      BTW, the way the A-350 is going, it too will be late, anywhere between 1 and 1.5 years at this point.

      DL does have a very valid reason for taking the B-737-900ER (which will all be delivered by 2017), they HAVE to replace the oldest B-757-200s in their fleet, due to increasing costs operating these airplanes, NOW. The A-321 could not meet the delivery schedule, none of the NEOs and NEs will be delivered before 2017. and DL got the production slots and delivery times they wanted. So no, no NEO/NE will be delivered to anyone before B-737-900ER #100 in DL livery is delivered.

      DL still has at least another 150 NB airplanes to order in the next few years to replace all the MD-88/-90s and the remaining B-757s. That order will be for (mostly) the NE/NEO versions, most probibly the B-737-8NE and B-737-9NE and/or A-320NEO and A-321NEO. There will also be an order for the CS-100/-300.

      • Missed EIS dates are easily identified, by contrast guarantees relating to initial performance are often fogged off within the initial project development. The 380 suffered severe & significant performance shortfall claims, however if we now believe operators they were unsubstantiated. The industry view is that Boeing still faces challenges in realising it’s promised performance on it’s two new types, these equally may be part of a media frenzy, the manner in which boeing is working indicates otherwise.

        I made reference only to previous & current EIS projects & not speculative projects & their EIS dates, your 350 projections may well be correct but at this juncture are merely speculative.

        Delta’s 757 fleet is in dire need of reknewal the options in our view were more broad based & their were more opportune options than the chosen avenue.

  5. KCTB most agree, however A320NEo will be delivered from 2016, which doable. No LG etc changes required & experience developing wingpylons (3 for the A320 series sofar, they had the GTF under a A340 already).

    “No one has really talked about the upcoming UA NB order much. Then again we haven’t talked much about the WN order, either, except the possibility of them ordering the NEO a while back. Now, that possibility looks less likely.”

    Why is that less likely?

  6. Because it is beginning to look more likely they will be the launch customer for both the B-737-7NE and B-737-8NE. Boeing can stress the commonality of the NEs with WN’s current B-73Gs and B-73Hs. But you never know.

  7. When we mention the fact that airlines are apprehensive of quoted delivery dates because all the new programs have been late, we tend to forget to add the A400M to the list. Like most of the other military programs, as well as the recent civilian programs, it is running terribly late. And not too long ago EADS gave back the responsibility of managing the A400M to Airbus.

    I think the whole subject of new programs running late would be worth exploring, or be revisited, in a new thread eventually. In each case the reasons seam to be different. So I cannot readily identify a generic problem.

    • (lack of ) Holistic project understanding. We are loosing universalists fast
      and the vocal small minds rule.

      Management Schools produce people that break Einsteins “Model” postulate:
      “As simple as possible but not simpler”.

      The interesting thing to observe is that detail changes work much better than
      completely new projects.

      • Vocal small minds rule. I love that one Uwe! It reflects my own experience but I could not have expressed it better than you did.

  8. There is a huge difference between the development of an existing airframe and starting a new project from scratch.

    The major aerodynamic issue with the neo is the sharklet, and that is on schedule for Air New Zealand’s first example next year, and I understand the new pylon attachment requirements will be built in at that stage

    Whether the Leap or the GTF it is not a big issue providing the engines do as promised.

    As far as the 737 is concerned, it comes down to how far Boeing are prepared to go on the new engine

    Should know something next week I guess.

    It will be interesting to see what the boards reaction is to the perceived compromise on reduced fan size.

    If they take a longer term view of what happens after all the initial excitement of a few big orders at launch, then how will a new 737 sell if it is perceived as a few percent short of the neo.

    On, the much esteemed “Lightsaber” who really knows what he is talking about IMO, hints that the GTF could have a few percent in reserve as far as fuel burn is concerned, and while GE/CFM are tending to hog the limelight in recent engine contests, it would seem inevitable that GTF will respond by diluting their contingent margin to regain the initial impetus,

    As GTF will not be available for the 737, a very significant advantage could emerge on the neo if this happens.

    • “As GTF will not be available for the 737, a very significant advantage could emerge on the NEO.” Yes, absolutely!

      The advantage of the gear system might actually be insurmountable over the long run as it’s reliability is further demonstrated.

      And fuel burn is only one of the advantages that the GTF enjoys over the competition. The other obvious benefit is a significant reduction in the noise footprint. 4 to 1 they say. If this figure can be proven it will mean that the GTF is indeed a game changer.

      I think there is much more to it than what Rolls-Royce came up with when they introduced the three spool engine. It was never truly revolutionary like the gear reduction might become if it’s potential is realized.

      The environment has become a major issue in our society and that is where the GTF excels: low fuel burn, low emissions and low noise.

      • I should have mentioned that the 4 to 1 figure is when compared to a current engine like the CF34 or CFM56.

  9. “Keeje, it looks like WN will be the launch customer, and probibly UA, too.”

    How can one have 2 launch customers?

  10. I am guessing that the current engines on the 737 fleet are around 66″ in diameter, based on the assumption that they were maxed out with the changes to the nacelles for the NG, hence the flattened bottom.

    If so, Boeing will be strapping new technology engines on their RE fleet but with absolutely no increase in engine diameter. The ultimate question will be, “just how much of a compromise will this be, as far as performance, SFC wise, is concerned”?

    The fact that Delta is buying current tech aircraft with no provision for upgrades to new tech engines begs the question as to what they actually have planned long term for their fleet?

    Ride it out until Boeing, Airbus or somebody else comes up with some true next generation narrow bodies? Look at some sort of order for new engine technology aircraft some time soon? Is their a third option?

  11. Aero, the current CFM-56-7B engines on the B-737NG have a 61″ fan diameter. GE/CFM said they could built an engine with anywhere between a 66″ to 71″ fan for the B-737NE. Even up to the 71″ fan, Boeing could have excepted it, but with more changes to the airplane, like the longer NLG. But those additional changes would take more time to develope, and the 66″ fan did not need things like that. So, apparently Boeing and GE have settled on the 66″ fan engine.

    • I may have missunderstood you, but:

      “The meek ruling” is certainly not Boeing’s avowed mantra 😉

  12. Thanks for the update on the conversion rights, I was getting curious why it hadn’t been reported anywhere else and why AA didn’t mention it in the PR like they did with being able to switch families for the A32XNEO.

  13. Pingback: Any "Latest & Greatest" about Delta? - Page 9122 - Airline Pilot Central Forums

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