ISTAT Europe: a tough review by Aeroturbopower, and our thoughts

ISTAT Europe: Aeroturbopower has this recap of last week’s ISTAT Europe conference and he takes a devastating hit at the Boeing presentation. We weren’t at the event this year but we’ve seen plenty of Boeing presentations and agree with Aeroturbopower’s assessment that Boeing takes liberties…something we’ve written about and something we’ve also expressed to Boeing directly. Comparing apples to oranges seems to be a common tactic.

But in fairness, Airbus also selectively chooses numbers that boost its case. We dissected one such instance in this column on AirInsight. Both companies play around with the seating configuration of their airplanes and the opposition to come up with numbers for seat-mile costs. We’ve seen Boeing compare ranges of the 737 NG and MAX vs the A320ceo/neo families by including the auxiliary fuel tank for the 737 but not for the A320, completely distorting the comparisons. Boeing relies on DOT Form 41 data and a study from 2006-2009 in Europe when comparing maintenance costs of the two families to argue the 737 costs up to 27% less to maintain. The figure, on its face, defies logic. If the A320 cost this much more to maintain, airlines would be hard-pressed to buy it. But more to the point, the methodology for the DOT Form 41 data is thoroughly discredited as a reliable source of information. Relying on a study that uses data up to six years old is also questionable.

All these manipulations of data is why we view numbers from both companies with a high degree of skepticism. In this column, we discuss this at the very end.

Manipulation of data like this harms the credibility of both companies.

As for Aeroturbopower’s report on the 737 MAX design not being frozen, this is true and it’s not news. Boeing said it won’t be until next year and this is what we are also hearing from customers. We’re hearing from a variety of sources that there are still challenges in achieving the advertised 13% fuel burn improvement over today’s 737 NG. We believe Boeing and CFM will get there, but it remains tough. We would not be surprised to see the 69.4 inch fan diameter increase yet again.

WTO Compliance?

The Washington Post reports that the US has complied with the WTO ruling on Boeing illegal subsidies. Boeing didn’t announce whether it has repaid the illegal subsidies, as it pledged to do if it was found guilty of receiving them.

14 Comments on “ISTAT Europe: a tough review by Aeroturbopower, and our thoughts

  1. For both Airbus and Boeing to achieve the promised numbers for the B-737MAX and the A-320NEO, both still have a lot of work to do. With the possibility of some type of workaction against Boeing by SPEEA, that makes their work and deadlines harder to achieve.
    I don’t think Boeing has returned any money deemed ‘illegal’ to anyone, yet. Then again, neither has Airbus.

    • Apropos
      Boeing: “Airbus thumbing their nose at the WTO”

      Extrapolating from Boeing’s activity in the recent past this is
      probably more like Boeing projecting their own “compliance, horay!” potemkin activity
      onto Airbus.
      As someone on FG wrote: this will be a tennisgame of “you did”‘s, “but the other did”,
      foot stamping and finger pointing exchanges for years to come.

  2. Re. Aeroturbopower’s report on the 737 MAX design not being frozen.
    I speculated before, that the sudden retirement of CEO J. Albaugh, just
    before the FAS this Summer, had something to do with what I called
    the “shaky” aspect of the MAX ground-clearance/eng. thrust problem
    NOT to be resolved until early next year, in spite of the large number of
    orders for the airplane.
    These orders were based on the “guarantee” from GE/SNECMA for the
    fuel-burn/thrust levels for the GenEX engine with a 70 inch fan diameter.
    I have yet to learn what the committed MAX customers wiil do, if those
    “guarantees” cannot be fulfilled by next Spring and why Jim A. really
    retired at such an ominous time!

    • I’d be surprised if Boeing really got a hard guarantee from CFM for the paper MAX.

  3. If the other aircraft has the same engine with an 8 inch bigger fan, the only thing a marketing man can do: say its far more complicated, include new variables, hire analysts, invent a new benchmark, select specific conditions, don’t lie but leave stuff out, drag in irrelevant history to suggest a trend : confuse the public, overload them with contradicting info. Many will assume both must be about equal. Mission accomplished.

    • keesje, the airline customers already know about the product airplanes. They are concerned how the new airplane product will fit their airline mission and how much buying/leasing and operating the new airplane costs.

  4. According to friends at Lufthansa Technik in Manila, apart from Airbus already being in the PAL fleet, the killer for 737MAX was the anticipated field performance.
    There are a few provincial airports here that keep pilots fully concentrated and the extra weight expected in the MAX suggested even higher levels of concentration would be required.

    • The major restriction of the 737 remains the main landing gear. It is very efficiently build into the wing/ belly. Stretching it for more efficient engines or better runway performance is impossible without removing the keel beam, or changing the hing points. Both dramatic, far reaching redesigns.
      http://www.sunvair.com/media/737_belly.jpg

      The 737-900/-9 runway performance is severly compromised by the resulting rotation angle, -speed and/or payload range restrictions. IMO a reason AA had to go for the A321 replacing 757s/762 in their large southern / caribien network. And why UA /Co will come back to Leahy..

      On the compromised data/ skewed assumption Airbus and Boeing use, I think there may be an opportunity for Leeham / Airinsight to create a credible independent benchmark. E.g how many economy seats at 30 inch pitch and minimum mainline width fit in, with fixed lavatory and galley rates. Both with the same payload. The MTOW ranges are skewed as busses can structurally carry more weight, as are passenger only ranges (bypassing runway restrictions at realistic high payloads). Maybe select three benchmark, defined flight profiles, a typical east bound transcon, the average 80 minute euroflight and a typical asian/ carabien/ hothigh short runway profile.

      It wouldn’t be perfect but far more realistic and credible then the average John/ Randy presentation. Lots of folks around the av web community that can assist / provide input.

      • It seems most airlines don’t agree with you as the B-737 is, and has been for a long time the best sellingairliner ever.

  5. KC135TopBoom :
    It seems most airlines don’t agree with you as the B-737 is, and has been for a long time the best sellingairliner ever.

    The Boeing trap: comparing apples to some fruity assumptions 😉

    • Uwe :

      KC135TopBoom :
      It seems most airlines don’t agree with you as the B-737 is, and has been for a long time the best sellingairliner ever.

      The Boeing trap: comparing apples to some fruity assumptions

      from my post #6: “invent a new benchmark, select specific conditions, don’t lie but leave stuff out, drag in irrelevant history to suggest a trend”

      • Oh, I get it now, neither the B-737’s 45 year history nor the A-320’s nearly 25 year history are relevent……..NOT.

        Both the A-320s and B-737s do exactly the same missions, and their next versions, the NEO and MAX are projected to continue doing that.

  6. KC135TopBoom :
    Oh, I get it now, neither the B-737′s 45 year history nor the A-320′s nearly 25 year history are relevent……..NOT.
    Both the A-320s and B-737s do exactly the same missions, and their next versions, the NEO and MAX are projected to continue doing that.

    No KC135Topboom. But you state:

    “It seems most airlines don’t agree with you as the B-737 is, and has been for a long time the best sellingairliner ever.”

    I think you’ll agree that the Airbus A320 has been outselling/ outdelivering the 737 for a decade and its backlog is larger.

    So your statement seems to fall under : “confuse the public, overload them with seemingly contradicting info”

    As Uwe names it “The Boeing trap”

    I think Boeing should stop communicating this way. IMO it hurts the brand.
    http://boeingblogs.com/randy/archives/2011/11/the_sweet_spot_1.html

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