Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Boeing unlikely to meet FAA’s 90-day deadline for new safety program April 18, 2024
- Focus on quality not slowing innovation, says GKN April 18, 2024
- Boeing defends 787, 777 against whistleblower charges April 17, 2024
- Dissecting Boeing CEO’s statement next new airplane will cost $50bn April 15, 2024
- Bjorn’s Corner: New engine development. Part 3. Propulsive efficiency April 12, 2024
More on MAX: Aspire Aviation does long analysis
Aspire Aviation in Hong Kong has done a long analysis on the Boeing 737 MAX, capturing what Boeing has said recently along with original information and data from other sources. This article may be found here.
Meantime, the image below is from Randy Tinseth’s blog and neatly illustrates points made by John Hamilton, the chief 737 program engineer, during his recent conference call with media.
Airbus has a different view, as we extensively reported here.
The MAX is still being defined, as Boeing will readily admit, but it is showing customers specifications. Boeing is not yet ready to write performance guarantees because the specifications aren’t firmed up yet. Jim Albaugh, CEO of Boeing Commercial Airplanes, was quoted at the Dubai Air Show saying he hopes to firm up the first contract perhaps by year end or early into the new year. We believe this would likely be American Airlines, the first customer for the MAX (but not the launch operator).
There is still a lot of design work to do for the B-737MAX. The suggestion by Aspire that raked wingtips could be offered is exciting, as raked wingtips offer a 1%-2% better drag reduction than even blended wingtips. They are also much lighter than winglets. Boeing has already designed raked wingtips for the B-737-800 based USN P-8A, and it only brings the wingspan out another 6′ (3m) or so, to 123′.
But as I have been saying all along, the MAX has a big weight advantage over the NEO. With its slightly narrower fuselage, the MAX also will have less drag.
It would be good to see AA firm up their order, but they still don’t want to be the launch customer. At this point, my guess is it will be WN who becomes the launch customer for both the B-737-7MAX and B-737-8MAX. I don’t know who would launch the B-737-9MAX.
How much more efficiency would the engine gain if there was no MAX 9, and the core was customized to just be powerful enough for the MAX 8? Looking to the future, the MAX 8 could continue to fill that slot for Boeing and the NSA could cover anything larger.
Boeing are right. Weight is what counts and larger fans are useless. … As long as you don’t have to fly anywhere (very far)!
Larger fans only really make a difference in cruise I believe. Weight is what drives up fuel costs during climb. Airbus don’t get much advantage from their larger fans during climb but these will add weight. Although I suspect a geared engine will help climb performance.
The 737 MAX should match A320 NEO performance on up and down type flights.
Boeing’s suggestion that bigger fans have more drag seems irrelevant to me. You’re not going round with the engine switched off. A working engine with a bigger profile is either more efficient or it’s not
Sadly, Aspire’s piece is less analysis than it is a regurgitation of Boeing quotes.
I think they wanted to bring all the pertinent quotes into one place. 😉
( Should have added quote sources though )
As such the article already is very valuable.
Next step would be to add in positional changes over time.
The most prominent thing to note here for the MAX is
that “minimum change” already died a gory death.
The tendered upgrades to match A320NEO performance are fast
siddling from a similar to the 737Classic step effort over to the scope
of the 737NG airframe changes _plus_ an engine upgrade.
With all that effort announced and the associated cost
the NSA developement recedes further into the future.
Q: any numbers around for the NG developement cost ?
Hmmm…
At first glance that diagram seems to makes sense, but the second step: lower thrust required -> smaller fan diameter…?
I thought efficiency as a function of bypass ratio (for a given set of conditions) was the main driver of fan size, not max thrust…
In principle, I think it makes sense. If you need less maximum thrust because the plane’s lighter, the optimum fan size will correlate to the thrust. Otherwise all planes from Citation Jet to Airbus A380s would have the same massive engine.
Put it another way. Did Boeing go for a 68″ engine because that’s the best size regardless of placement, or because it was the very largest engine they could squeeze in without it hitting the ground? Exactly. The best that can be said for the smaller engine is that it doesn’t prevent Boeing from selling a marketable airplane.
I take the marketing guys with a grain of salt.
Money talks and “b.s.” walks. While its nice to see a huge order/commitment spike on the B737MAX, the sales of the A32XNEO is staggering and speaks volumes.
Both the B737MAX and A32XNEO will be excellent planes offering unprecedented economics on a single-isle plane.
Well, sales pitches and achieved sales victories are no different than a war. That is, the past will be rewritten by the winner and nothing else will matter.
Will the conservative option of a 68″ fan for the plantform of the 737 be ´right´ decision, or a just a temerary fix in a well worded sales pitch? Time will tell.
I for one, have no doubt that with such installed customer based, both programs will be wildly successful sales wise and financially. However, the big question is if A and B are doing enough to keep an edge on their very real up-and-coming serious competitors.
Again, time will tell…
Boeing proposed MAX calculations currently don’t marry up, the promoted 10% to 12% efficency improvement is not achievable, subject to an unannouncment by the encumbent manufacturer of an improvement in engine technology, that currently we know nothing about. Nose gear modification will also demand a higher degree of re-modeling than Boeing are currently letting on.
NEO development presents some arduous challenges in acheiving promised performance levels, weight shedding is paramount & despite gains required in the NEO design weight shedding seems destined to offer up some suprises on the final manufactured NEO product.
Currently many industry decision makers look upon the MAX as a compromise & the NEO as a solution.
No question both models will be good of course, however consider that without the duopoly neither would be on the drawing board.
Well, the way some of us read it. Airbus is promoting a 15% improvement in fuel saving for its A320NEO series and everybody is saying that it is ok. Boeing is promoting a 10-12% percent improvement for is B737 MAX series and mostly every body is doubting this outcome. So what gives? If CFM can come close with every engine offered to both OEM, is it that hard to come up with these numbers for one and not for the other manufacturer?
CFM know full well what they can achieve, the problem lies with airframe manufacturers & the manner they interpret the application of given data during embronic project developement. Naturaly enthusiastic marketing/sales teams & their managers actively embroider & promote unachievable engineering statistics, so nothing new here.
I fail to recall any modern commercial airframe ever meeting it’s original promised spec on EIS
727-100 was 10% better than predicted by Boeing….
CRJ1000 was 4% better…..
Anybody else recall others?
Whoops!
Apologies, I was somewhere else when the 727 launched & despite not being a threat I should have importantly checked & known the CRJ1000 figures,
Rgds
Suitably chastised……
So Boeing has better, lower induced drag (smaller fuselage, less weight) and Airbus has more room for more efficient engines.
So Boeing has an apparent advantage at shorter ranges and Airbus will likely outperform its rival at longer distances.
and of course everything hinges on how the airline actually uses the product (seat lay-out, route, furnishings)
And the rivalry continues.
“And the rivalry continues.”..and the way it should be!
Boeing is desperate. They don’t have the optimal engine and they know it. If the Boeing fan diameter was the best solution Airbus would use it too.
No, you are completely wrong, maybe from drinking to much of the Airbus kool-aid, Mark? Boeing has the optimal engine for the B-737. Airbus cannot use the LEAP-1B engine because it does not provide enough thrust to power the heavy A-32X airplanes (compared to each model’s B-737 counterpart). The current versions of each A-32X is up to 10,000 lbs heavier than the current versions of the B-737NG. Now Airbus has to add winglets (Boeing already has them and can convert to the lighter raked wingtips), engines that are heavier than those going on the MAX, and more wing structure (Boeing needs some of this too, but not the extra strenghting needed for the winglets).
Current CFM-56 versions used for the A-320 and 737-800:
A320
CFM56-5A1 25.000 lbf – Weight 4.995 lb
CFM56-5A3 26.500 lbf – Weight 4.995 lb
CFM56-5B4 27.000 lbf – Weight 5.250 lb
737-800
CFM-56-7B24 24.200 lbf – Weight 5.216 lb
CFM-56-7B26 26.300 lbf – Weight 5.216 lb
CFM-56-7B27 27.300 lbf – Weight 5.216 lb
It seems the super heavy A 32X doesn’t need that much extra thrust to fly.
Spilled my coffee when I saw Randy’s chart. So, apparently, Airbus’ (and GE’s)engineers are stupid enough to fail understanding the smaller fan is a much better solution. Well, if this was the case, Boeing offers them the evident solution. It’s still possible to put a couple of so-called lightweight 68″ fans under the wings of the Neo. There’s plenty of room for that. Of course, if Airbus is right, the opposite is not true…
You can also put the Trent1000 on the wing of the NEO if bigger was always better!
Then, it would be about, should I say 30% more efficient?
Voilá!
Good campaigning by Boeing.
On the physical side some weaknesses.
Trading the fuel efficiency of a an engine versus the added drag is simple.
Airbus might have its failings, but getting that right should be within its ability.
If you can’t convince them, confuse them.
That seems to be Boeings marketing tactic at the moment.
Airbus says the opposite.
Result: the majority believes they’re about equal.
Goal achieved.
Reality Boeings 737 Max 68 inch fan isn’t a choice, it’s a limitation.
The OEW differences are marginal & Sfc is missing in Boeings presentation.
“If you can’t convince them, confuse them.
That seems to be Boeings marketing tactic at the moment.”
Not just this project. It worked for the Dreamliner quite well.
( Too well actually. “Leaving the road at high speeds” comes to mind 😉
Why shouldn’t it work here?
Silently provide very good rebates and sales shouldn’t be far away.
@keesje
Do you REALLY think carriers are that dumb as to be confused by a bunch of marketing gimmick? If so then they don’t deserve to be flying pax in the first place.
Taking a holistic peak at the Dreamliner Project : Yes, most emphatically yes 😉
Does Airbus really say the opposite, keesje? Airbus claims the NEO, as a family is 15% more effient. The problem that is in comparison to the current, non-wingletted A-32X family.
They calim the A-320NEO will be 16% more efficent than the (current) B-737-800, per seat. The problem is the slightly bigger and heaiver A-320NEO is about a 150 seat airplane, compared to 165 on the B-738.
The LEAP-1B engine fan may be a limitation for the B-737MAX, so what? Boeing has not released the OEWs for the new B-737 family because it is still in design. Boeing, I’m sure, has given the 9 customers for the B-737MAX some weight numbers to work with. Airbus has done the same for the still undefined A-32X-NEO family for their customers.
The Airbus cheerleaders swallow every word from Airbus as though it is the word of God, and question everything from Boeing as if the devil said it.
The NEO family had a great start in sales since it launch, and most of that is a credit to the PAS. Bravo Airbus. But has anyone noticed how the NEO sales seemed to have dropped off since Boeing announced/launched the MAX? Airbus has not announced a 100+ airplane sale of the NEO since the MAX began raking in sales of that size.
Of course, if you only count orders by hundreds, Airbus’ sales for this week are poor. The modest Alafco’s deal announced today failed to reach that bar.
“Does Airbus really say the opposite, keesje? ”
It seems we forget quickly what we don’t like..
http://airinsight.com/2011/10/05/airbus-takes-on-max/
Boeing made bold claims based on undefined specifications, physics beating engine parameters & irrealistic assumptions (seatcounts, ranges, PIPs). But it doesn’t seem to bother the least. I’m surprised by the free ride they got on this by much of the press.
Where exactly has the MAX raked in sales? So far it hasn’t got one. It has a commitment from one or two likely purchasers, plus aa number of anonymous commitments. But that’s it, and those are not sales. Also, where in the world are 500 commitments ‘similar’ to. 1200 sales? Meanwhile, in the real world, Airbus is firming up its commitments to sales, and selling more.
@andreas:
Total bogus, there are a number of commitments/purchasers and they have put down deposits on them and you also know there are close to 700 of them now.
The only reason why Boeing hasn’t closed the deal is because the numbers aren’t 100% firm.
Boeing has been working on a B737NG/NSA for many years. D you SERIOUSLY think they don’t know about 95% of what the numbers are going to be?
You are correct….about the current engine weights. But we are talking about the LEAP-1A/-1B engines, and what they weigh. There will also be a big difference in thrust ratings. The 1A engine will have between 27,000 lbs and 34,000 lbs of thrust while the 1B engine will have between 25,000 lbs and 29,000 lbs of thrust.
Do you have a source for your numbers?
And what about the differences in engine weights?
WP:EN has some data on various CFM56 engines:
http://en.wikipedia.org/wiki/CFM_International_CFM56
for A319, A320, A321 ( guess this is out of production ?)
CFM56-5A* weights in @ 4,995 lb (2,270 kg)
for A318, A319, A320, A321
CFM56-5B* weights in @ 5,250 lb (2,380 kg)
all 737NG versions:
CFM56-7B* weights in @ 5,216 lb (2,370 kg)
So the weight uptake came with the B version
and the smaller fan for the NG saves about 10kg.
Just for the fun of it:
The V2500 engines weight in @ 2,330 .. 2,360 kg
( for Airbus A319.. A321 )
Whichever way one addresses the issue, the Leap and GTF engines for NEO are optimized for that application.
The 68″ Leap for Max is a compromise.
“The 68″ Leap for Max is a compromise.”
That is what Boeing has been saying all along. ( only people didn’t read all that carefully 😉
Leap for MAX is “more optimised” due to significantly harder design constraints than
the Leap or GTF for NEO. i.e. propulsive efficiency is stunted by airframe limitations
forcing design decissions that take more effort and cost and a larger buquet of compromises.
“more optimised” here means more effort will go into achieving usefull results.
You could reverse this:
The A320 is the more optimal fit for uncompromised efficiency Leap and GTF engines.
The LEAP-1B engine fan may be a limitation for the B-737MAX, so what?
The so what comment is more significent then you imagine, dramatic is more valid comment, a qualified percentage of your suggested EADS supporters (Cheerleaders ?) are seemingly more informed than you give credit for.
It’s perhaps unreasonable to suggest that contrary to your suggestion that whilst Boeing come to terms with the MAX, the suggestion NEO sales of recent have dropped off, is quite ludicrous as todays media seems to support, sales or LOI materialise arrive on almost a daily basis.
I recollect previously mentioning that future sales or more aligned toward availability of the NEO & timely delivery dates, consequently the Max option will achieve sales primarily within the North American market & it’s politicaly loyal customers at what appears to be an operational dissadvantage, on the promoted figures.
.
“.. consequently the Max option will achieve sales primarily within the North American market & it’s politicaly loyal customers at what appears to be an operational dissadvantage, on the promoted figures.”
Hamstrung.
As someone noted the MAX is the plane for the EURO market ( potential short range advantage while the NEO will save more on longer segments.
The gyrations over fan diameter are almost laughable. Take a breath guys!
Boeing’s claims are for 10%-12% reduction in fuel burn on a 500nm mission, 1% of which comes from the aft-body refinement. Airbus claims are for engine + winglets being worth -15%. Since we know the 737 winglets are worth ~3% on a 500nm mission, and we have past Airbus claims and DAW study evidence the old A320 wingtip fence is worth 1%-2% on a 500nm mission. That means the A320neo is equal to A320 block fuel +1.5% for removal of the tip fence -3% for adding the winglets (net -1.5% reduction) with the balance of the gain coming from the engine (-13.5%).
The way I see the data stacked up, Boeing is claiming -9%-11% block fuel reduction coming from the engine. Airbus is claiming around -13.5% from the engine. That difference is easily explainable within the proposed fan diameter delta.
The flavor of the above comments is that somehow it is impossible for Boeing to match the A320neo fuel burn improvement with the MAX. As far as I can tell, that does not appear to be what Boeing is trying to achieve – nor have I heard them claim that. It seems to me Boeing is comfortable conceding a couple % block fuel in order to keep the MAX workstatement within some business constraint (i.e. not extending the main gear).
Adding credibility to Boeing’s story that 68″ gives them what they need is the fact the 8″ NLG extension creates enough space for a 70″-71″ fan. Nothing is stopping Boeing from adding those few extra inches in the fan should they need it to make the airplane successful… but clearly they don’t. They didn’t need to match the A320 fan 13 years ago when they rolled out the 737NG and quite apparently they don’t now either.
The almost panicked attempts above to declare the 737 MAX dead-on-arrival are actually a bit sad. What are obviously smart people are letting their emotions run the thinking parts of their brain… all the while accusing Boeing of distorting reality or offering a product based on smoke and mirrors.
All Boeing needs to do is create an aircraft which remains competitive with the A320neo. All circumstantial evidence indicates they have done just this in the MAX.
That is the problem “CM”. Lots of commenters on this blog just like to question everything Boeing says (or insinuates) about what the MAX will do or will be able to do. The mighty A320 will do it all. Good thing they can a least have the A320 to gush about, cause Airbus will really have to work really hard to make the A350 be as good as they claim.
I’d say there are a good number of blind followers from both camps.
Why that seems to be your inverse behavior!
Another 30 NEOs have gone to a lessor as a firm order. It is a shame to see a new a/c programme struggle so badly….
With 1000 NEO-orders so far the line is booked through 2018 (assuming mid 2015 deliveries). So why order now? I guess there are some slots in reserve, which Airbus retains for upcoming campaigns. But another “200 aircraft” order is unlikely.
Both manufacturers want to keep their marketshare, and if possible at acceptable discount rate. It is not about “destroying” the other. Boeing will feel every % of SFC disadvantage in the prices it can charge. Dead simple.
My view continues to be that given the sales numbers we will see new slots being created from day 1 onwards by production increases, at both manufacturers.
I think airbus has become conservative on A320 NEO discounts during the last 6 months. A question of demand and availability.
Don’t know about the Boeing MAX in this respect. Restoring market share & keeping current customers loyal might be high on the priority list.
After two decades of experimentations and more than one billion$, P&W get the GTF technologies. What is the reality of the LEAP 1B ? For now, it’s a mathematical model. The experimentation in the real world command another type of calculations and ajustments. We don’t have any ideas for the sociotechnical adaptation of that engine “inside” the infrastructure or the old body of the Maxseries…
If I am not wrong the 777 was above specs as well as the first A330/340s.
A380?
http://atwonline.com/aircraftenginescomponents/news/a380-fuel-burn-better-expected-0309
Better Aero and sfc jinxed with an endearing bit of baby fat. 😉
Did Airbus ever announce anything tangible about their weight watchers progress ?
Yes, I think so too 😉
Just to keep in sight the “order weight” the different NEO types have:
A319NEO : 40 firm orders
A320NEO : 1055 firm orders + 465 options
A321NEO : 66 firm orders
Aren’t a lot of the A320NEO sales for the ‘family’, I.e. Not broken down to sub-type yet?
Probable.
How would you quantify ?
Anyway, the numbers are “cold” now 😉
Do these numbers include the addtional 200 plus A320neos orders today and 5 additional a380s? The BusBoys are selling airplanes.
No, that was the reason for the “cold” addendum.
I took those numbers from the WP:DE NEO page:
http://de.wikipedia.org/wiki/Airbus-A320-Familie#Bestellungen
As Falcon? further down noted the AA order on the october O&D sheet currently shows 130 A321 and not the full complement of 260.
In contrast the “NEO Bestellungen” paragraph shows 260 NEO orders for AA though afair it was a 1:1 mix.
replace “Falcon” with “TC”
I don’t know why you’re so fixated on orders involving 100+ frames. I count 391 NEO orders and commitments since MAX was launched. Not too shabby in four months. This number includes the 130 firmed by AA as this essentially coincides with lauching of the MAX.
1,268 firm, 152 pending, some 750+ options, and chugging along quite nicely.
Then do you also count the 700+ commitments for the MAX in the time period the NEO got 391?
I certainly don’t discount them, no. I would, however, appreciate knowing who these commitments were for. More importantly, your comparison of sales figures over the past four months is rather ludicrous as the MAX experienced its initial order surge upon announcement during this period.
Oh, sure, we do have Boeing’s word for those orders 😉
95% fixed?
Well, with all the colourfull test balloons let loose by Boeing in recent weeks that might be slightly overoptimistic.
Anyway the last 5% will be the most difficult.
IMHO Boeing is preparing a very expensive bath of scalding hot water for their own benefit.
What again did founder the 748 project ? Letting a minimum change update run wild ?
Yes, Boeing can’t be making misleading statements. That would be illegal. They have close to 700 and those would be deposits.
The B748 project was delayed due to a number of factors, not just a design change.
Sales and commitments. Not the same. If John Leahy made this claim, you’d be the first to chastise him on A-net.
But hey, by that measure Airbus now has north of 2,000 ‘sales’ for the NEO. So I will stick to saying that 700 is not almost the same as over 2,000.
Impossible. That’s my point. 🙂
Yeah, only 3.6 sales per day it has been offered. What a failure this programme is. Buried by Boeing’s NSA… Stupid Airbus to put Boeing into the strategic driving seat….
Well, 3.6 sales per day is a very good daily average. The NEO is doing well in the year since it has been offered. The MAX has been offered now for approximately 140 days, with 700+ sales/commitments, that is an average of 5 per day. Now the NEO really took off at the PAS, get some 700+ commitments there. The MAX is now being offered at the much smaller DAS this week. It may do well, and it may not, we shall see.
It’s hardly surprising Boeing reached the 700 mark quicker than the Airbus did with the NEO. Airbus announcing the NEO triggered the frenzy not only in the Airbus camp. Boeing was under heavy pressure to respond, and it took them several months to do so. I somehow doubt Boeing’s customer base was sitting on its hands throughout this time.
please correct your figures: 0 sales – 700+ commitments
Has Airbus put any NEO orders on their order and deliveries page? What’s the hold up?
No hold up. Not at Airbus 😉
All I see for American Airlines is 130 but they ordered 260 back in August.
If you’re referring to the spreadsheet, the NEO orders are grouped together with the standard A320s.
The C-series is lighter than the 737 and its engines have a lower thrust and a larger fan diameter.
The Boeing equation : “Higher weight = Higher thrust = Larger Fan” is false.
I don’t think they will get a lot of orders with this kind of silly arguments…
Birdy, you should know better, a smaller engine can be as powerful and as efficient as a slightly larger engine if the core runs a at higher temperature and the fan turns faster. The C-series is using the geared turbofan, so the fan will turn slower. This should be better for maintenance issue and probably a cheaper engine too.
Your right, Birdy….NOT. The B-737MAX has outsold/commitments the C-Series by better than 3:1.
Today only the 737MAX-7 competes with the CSeries. So please take that into consideration when you evaluate the two. Maybe in the future, if Bombardier develops the CS500/700/900, will you be able to make a comparison on an equal basis.
The CSeries will only lose when more range is needed. 20 A319NEO for Frontier, 6 A319NEO for Qatar. MAX7 will be a long range machine too.
@ my dear friend KC135TopBoom :
Boeing could have sold 2000 737MAX, the equation “Higher weight = Higher thrust = Larger Fan” would be still false.
If you like syllogisms “à la Boeing”, as the A320NEO outsells the 737MAX by 1200 firm orders to 0, you could say that “Larger Fan = Bigger sales number”.
Don’t confuse commitments and options. A commitment requires a reasonable deposit and guarantees a production slot. Options, require little collateral and no specific slot guarantees.
130 A321 in the september ordersheet.
Initially the order was announced as 130 A320 fam + 130 A320NEO fam
I can’t find the remainder either. ( Firmed in nov? or booked under a different buyer? )
-I challenge you to find me one place where I have stated “Leahy is lying” or “I don’t believe him” when it comes to sales/LOI/MOU.
-When was the NEO launched/announced for sale and the same for the B737MAX? Maybe you can let everyone here know.
The issue here is that the MAX, which I do not for aa. Second doubt will do very well, has not got a sale yet. It’s well on its way to 700+ of themn but not there yet. Boeing must have promised something to those companies who committed, and they will have the right to walkk away at no penalty if these promises don’t materialise. On the other hand, Boeing won’t have to pay them damages in. That case. So a weaker commitment serves both sides well. I am not calliing anyone anything, I am just making a point here that Airbus has 1200+ orders and 200+ or so committments, while the Boeing has about half that in commitments.
As for Boeing not being allowed to make. False statements, I think the 787 debacle exploded that myth. Nevertheles, I don’t believe that their claim here is false.
In any case, my personal view is that both planes will do well, but that Airbus has an advantage wwhen it comes to new operators, aand that they may switch some existing 737 operators. But it wwon’t break the duoopoly.
The marketing-babble by. Boeing however continues to be sad to watcch. Shrug.
OK, everybody. Let’s get back to the issues.
Knock off the personal challenges, who said what (or who didn’t), etc.
I hoped Boeing would formalize some of its 737 MAX commitments at Dubai.
It seems the design freeze milestone is moving.
Looks like the BusBoys did fairly well in Dubai with new orders.
Do you have as source for the claim that these ‘commitments’ involve deposits?
Do you have sources that say they don’t?
As we previously reported, “commitments” for the MAX are MOUs. We don’t believe deposits are involved but are not 100% certain. Typically deposits don’t get placed until firm contracts are signed.
“Boeing has commitments from eight airlines for more than 600 737 Max aircraft, the company’s marketing VP said in a Nov. 4 briefing.
Speaking at the Assn. of Asia Pacific Airlines annual meeting in Seoul, Randy Tinseth said a commitment means that an airline has paid a deposit to secure its order for the 737 Max, ”
http://www.aviationbrief.com/?p=4492
It seems that there could be SEC violations for misleading investor’s, if he is lying about the deposits?
Thank you, this is my understanding likewise.
There would also be the question of whether these deposits would be refundable or non-refundable. For firm orders, we know theyy arre not refundable, but are probbably often applied agaiinst other purchases, if the original order can not be commpleted. For commitments, I would expect them to be refundable. I would also expect them to be less important than deposits for firm orders, in terms of percentage of purchase volume.
regarding andreas reply #93.
If one were interested in actual facts about the Neo or Max on this thread it would much easier to have legitimate conversation.
However, I only answered a posters question regarding the nature of commitments vs. options… and low and behold the A&B mafia decides to make wild accusations on weather or not Boeing really has “Commitments” for Max… Really! Can you be any more immature?
Someone asks for a source, and I provide one… And then, since it covers the question about Boeing actually receiving deposits… Its turned into weather or not they are refundable? Oh my… We must do better then this.
@Observer
Thanks for the quote. I share your view: I’d rather like to have an educated exchange of views than rhetoric p****** contests between clacquers.
One has to acknowledge though that the term ‘commitments’ used by Boeing in the context of MAX is quite dubious. Boeing’s Albaugh is on record saying that Boeing is not taking firm orders because they are neither able to provide performance guarantees nor has pricing been fixed. It is obvious that ‘commitments’ at this stage are just that – short of an MoU, short of an LOI. Otherwise Boeing could have simply used these terms instead. So it is reasonable to assume that the deposits Tinseth is adamant about are much closer to a symbolic 1$ per airplane than to significant pre-delivery payments which usually are a percentage of the contract value.
It seems Oman Air and flydubia are interested in the B-737MAX. But neither has placed an order or commitment, yet. At least I have not seen one from them, has anyone else?
http://www.reuters.com/article/2011/11/12/us-airshow-boeing-idUSTRE7AB0BW20111112
FlyDubai’s Al Gaith said at the air show they would be placing an order “within a year’s time” so I wouldn’t expect to see any announcements in the next few months. He has also expressed his interest in the NEO and stated he wasn’t opposed to operating a mixed fleet. That said, I see them signing up for the MAX in six months or so, possibly earlier if they don’t want to be left behind… the order books are filling up rather quick.
Sorry about that, us BusBoys are still learning about how to do (Euro)Jingoism properly.
Probably a long way to go to reach the proficiency of the Boeinginista :- (())
We must read more carefully.
I never doubted the commitments. I doubt however that they have the same strength as a sale though. I would be certain that deposits for these are fully refundable, if in the final negotiation the sale can not be consummated, for whatever reason. And commitments lapse all the time (Emirates on the recent A330 non-order comes to mind), for various reasons. If the commitment deposit were not refundable, then it stands to reason that Boeing would also have to enter some firm commitment to the potential buyer regarding the performance of the a/c they sell, rather than just the space in the production line they offer?
Boeing will have given the airlines some data on performance on which the commitment is based. They will now have to come up with a design that matches this performance (as will Airbus with a produced NEO a/c that matches its obligations), otherwise the buyers will almost certainly be able to walk away at no penalty. It’ll be interesting to see if they can convert all the original 700 commitments (not that I expect we’ll ever find out). If they do, it would speak well for their sales department, since getting such a large number of commitments so quickly can not have been easy on a relatively (by normal standards) undefined a/c.
Given what the term ‘deposit’ normally stands for, one is left wondering what it stands for in this case. Again, we’ll probably never find out, but my guess is that it is probably closer to deposits that might be paid for purchase rights, or slot reservations.