Also: AirInsight has this commentary on the MAX.
Boeing today (Nov. 3) announced it now has more than 600 commitments for the 737 MAX, as well as confirming the 68 inch fan selection and discussed some other issues related to MAX.
Our immediately preceding post synopsized Jim Albaugh’s presentation to Goldman Sachs. Shortly after this, Boeing offered up to the media a tele-press conference with John Hamilton, 737 chief program engineer, to update the status.
One of the things he also referred to was the 600+ commitments by eight airlines for the MAX. Based on questions from the media, focusing on when “commitments” become “orders,” we thought it might be useful for the Reader to discuss this.
Basically, what Boeing has are Memorandums of Understanding for the airplane. The eight airlines, and potential customers, agree to execute a purchase contract (firm order) when Boeing is ready to offer definitive specifications and guarantees for the airplanes. John Hamilton (who is no relation to us, in case anyone wondered) alluded to this on the media call. He essentially said he doesn’t expect any of the commitments to be converted to firm orders any time soon.
In fact, the final design specifications won’t be ready until 2013, Boeing announced today, with first flight in 2016 and (as previously announced) EIS in 2017. As before, Albaugh and now Hamilton said they hope to move the timeline “to the left.”
Who are the customers that have MOUs? American Airlines is the only announced customer. We understand GOL, COPA and Norwegian Air are the other three of the original five customers. We understand the fifth is a small carrier with a small number of commitments. We haven’t yet snooped around about the three additional ones announced today.
Notably, lessor GECAS is not yet among the commitments, we understand, which seems odd to us at this stage of the game given that the engine is from sister company CFM International. (It should be noted that GECAS never ordered the 787, despite having the GEnx engine.) None of the lessors has yet signed an MOU, as far as we know. Several lessors have placed orders for the Airbus NEO family.
Several news outlets have already posted reports from the conference. A search of Google News will bring these to the front. We won’t repeat what’s already been written elsewhere.
An important element of the MAX briefing lies in the ambiguity surrounding the LEAP-1B engine. Although Albaugh and Hamilton confirmed what we reported weeks ago–that the 68 inch fan has been selected–we knew from our own information that the MAX in its current iteration is 2-3 percentage points in fuel burn savings less than advertised by Boeing to-date. (In fact, we had specific questions about this into Boeing Corporate Communications since Monday.) This is why Boeing revealed publicly for the first time that it has asked CFM to customize the engine core–it is an effort to recapture some of this shortfall.
Boeing’s Hamilton also revealed that the decision has been made to increase the length of the nose gear. While the most commonly reported extension is 6-8 inches, Hamilton said this is not yet set. He did say that an extension is not necessary, but doing so provides more optimization.
What we heard several weeks ago is that this extension permits CFM and Boeing to grow the engine to 71 inches from 68 inches is unable to provide the efficiency advertised. The 71-inch fan would provide another 1.5% fuel efficiency before the trades associated with the larger diameter, weight and other factors. The heavier engine would also likely mean greater structural modifications, which Boeing endeavors to minimize.
Boeing’s Hamilton was asked about the core customization and he didn’t provide any detail, rather sticking with “we’re-studying-this-with-CFM.” The fact is that at this point, the customized core is in R&D, and by definition detail is unavailable.
It must be emphasized that today’s advertised 11%-12% improvement in efficiency (up from 10%-12% announced in August) includes airframe improvements. But as with any design, engines are the driver and the airframe–particularly an older design like the 737–can only get you so far.
We asked CFM about the 2-3 percentage point difference in fuel efficiency.
“The LEAP-1B absolutely met the specifications when we signed the MOU back in March,” a CFM spokes-person wrote in an email. “You have to remember, though, that this program is still in the early stages of development and requirements will continue to evolve until design freeze. That why Boeing and CFM are working so closely together.”
We also asked about commonality of a customized core with other LEAP models.
“Commonality has a lot of advantages from a manufacturing standpoint for us and from a spare parts provisioning standpoint for airlines with mixed fleets, but we would never penalize one engine application over another to achieve that commonality. Again, we optimize the engine technology for each application,” CFM wrote.
Finally, the push to develop and optimized core won’t set the timeline of the program back, CFM wrote.
“Our schedule is in lock-step with Boeing.”