27 Comments on “Odds and Ends: No to 757 MAX; Fallout from Boeing job transfer; 8,000th 737; Fire sale pricing on 777LR”

1. “but as we wrote we had heard rumblings that Boeing was at least talking to the market about the prospect of such an airplane”

   I think there a large diffference between a new 757 and a new 757 sized aircraft.

   Motley was talking about / Boeing defusing the first, not a 757 sized aircraft.

2. On Airliners.net there is a thread regarding one of the remaining AI 777s – apparently it has broken spar and has been heavily cannibalised. suggestion was that it was about to be scrapped, although that is refuted by AI. It suggests, though, that they will not get a lot for it even if they are able to sell at as the cost of repairs will be very high.

   • It hasn’t flown for 18 months. I suspect it is a write off and AI just don’t want it’s loss to be seen on the books just yet, given the state they are in!

     • Newish used aircraft from the Indian sub continent don’t seem to be exceptionally well maintained by the time they’re disposed to say the least. I am a little impressed they managed to break a wing spar on a 5 year old T7.

       Add in that these are 3 class birds and it would seem most likely they’d be converted somehow to cargo. It would be amazing/sad to see them scrapped, but the other operators (ME3 mostly) seem to have committed to quite a few new build 777X models, and don’t tend to buy many used frames at all. I guess maybe DL/Boeing themselves could take them in to be reconfigured/set up for another mission, but since Boeing is so determined to sell new build 77F’s…

3. The Fool article says this about the 757:
   The A321NEO could thus take over many transatlantic routes, though not all of them.

   True?

   • Saw something recently, maybe here on Leeham?, that Airbus claim that there are only 5 B757 routes now that the 321 NEO can’t replace it on.

     • Yes, that was here but this seems understated.

   • Well, it depends on what the definition of is, is. The A-320NEO can do many TATL missions, if it does not have a full pax/cargo load. At MTOW from DUL, it can do Iceland. At MTOW from BOS, with favorable winds it can do LHR/LGW, from JFK it can do SNN, ORK, and DUB.

4. Boeing had a B-757 replacement. The B-787-3 was to replace the B-752/3, A-300/6, A-312/3, and non-ER B-762/3. In theory, Boeing could revive the B-783 for an EIS after the B-7810 in 2019. Boeing could adjust the range to about 4250 nm, and a MTOW around 370,000-375,000 lbs.

   MartinA:
   “Saw something recently, maybe here on Leeham?, that Airbus claim that there are only 5 B757 routes now that the 321 NEO can’t replace it on.”

   Actually there are many more than that. None of the US TATL, except Iceland missions, nor any “high-hot” beyond about 2000 nm. Airbus can claim all they want, but they never produced any evidence, nor did they identify any routes. BTW, Boeing has claimed the B-739MAX can do 95% of the B-757 missions. I have doubts about that claim, too. It is easy to say your next ‘paper airplane’ can do this mission or that mission. Proving it is another matter.

   Congrats to Boeing on delivering B-737 # 8,000!!!

   • Continental used to do Bogota-Houston with 737-700s and leave a dozen or so seats empty, they also used to have another dozen or so angry pax., as their luggage would get left behind. You can claim many things one way or another. I guess Airbus’ A321NEO claims revolve around pax/bags only.

     • Was that just one time, or on every mission for the BOG-IAH B-73G? I had never heard that story before, but it could happen once in a while due to weather conditions.

       • Always I think, I used to catch that flight a lot. Last time I flew it they didn’t seem to have to short seat though, and had upgraded to an 800. I suspect runway improvements.

   • Even if its 85% of the routes that still leaves a very small market for a non competitive long aircraft with all the single aisle boarding issues that length brings for a rapid turn around (Trans Atlantic long flight not so bad)

5. Delivery of the 8000th 737 is indeed an impressive milestone. However, I’ve always had lukewarm feelings about the aircraft itself.

   A long time ago, before the NG, one of my university professors several times referred to the 737 as “that little pig” during a design course I was taking, and he was even a Boeing engineer who worked on defining configurations at the time. The 737 was indeed a cobbled together, inelegant, brute force solution. Another thing he used to say was that Boeing “laughed all the way to the bank” with the 737 because it was such a successful seller.

   I guess those statements pretty much sum up my opinion about the 737. It continues to be somewhat of a “pig” but Boeing is still laughing all the way to the bank.

6. Regarding the A320 TATL, IMO AA could surprise us all. The A321T (14 in service today, # quickly growing) has
   – additional range (100 less passengers: -10 tonnes…)
   – international 4 class cabin (lots of galley & lav rate 1:5), IFE
   – ETOPS: http://www.flightglobal.com/news/articles/us-faa-grants-180min-etops-to-a319-a320-a321-206544/

   ICA cabin:
   http://www.seatguru.com/airlines/American_Airlines/American_Airlines_Airbus_A321_new.php

   AA 757 at MAN:
   http://www.airplane-pictures.net/images/uploaded-images/2010-6/19/92509.jpg

   They could theoretically switch any day (3000NM from JFK)..
   http://www.gcmap.com/map?P=&R=3000NM%40JFK&E=180&MS=wls&MP=polar&MX=540×540&PM=*

   • Flying TATL is not the same as flying US TransContinental. The AA A-321TC only carries about 100 pax. BTW, the B-737-800NG flies some of these same transcontinental missions as the A-321TCs fly, but carry about 45 and 65 more pax (there are two different seating versions of the B-73H). The A-321TC ability to fly transcontinental is because it carries so few pax. AA knew that and decided to make the A-321 mostly a premium service with F, J, Y+, and Y seating. There is no A-321TA (TATL) in any form, CEO or NEO. AA doesn’t need an A-321TA, as they still have about 20 B-757ERs.
     When the A-321NEOs, and the B-737-8MAXs begin to arrive, they are to replace the MD-80 series and the B-757D (domestic).

     • “The A-321TC ability to fly transcontinental is because it carries so few pax. AA knew that and decided to make the A-321 mostly a premium service with F, J, Y+, and Y seating.”

       Some story lines are just too good to check. Maybe once everybody has flown transcon on A321s and made fuel stops on 737s will they go? Doubt it.. Maybe take the Jetblue A321 JFK-LAX 190 seats.

       http://airchive.com/blog/2013/08/04/jetblues-first-non-premium-airbus-a321-flights-inaugural-flight-december-19th/

       The 737NG is less efficient but has larger fuel tanks.

7. re …We’re also told the IAM 751 membership continues to have poor morale in the wake of the Jan. 3 contract vote related to the 777X, with a major retirement expected among workers just in advance of the 2016 switchover to the 401(k) style pension plan…

   The company party line is of course that they must do this to reduce/afford labor cost and pension and benefits.

   What is unsaid is that the freeze and the layoffs etc serve to increase the pension surplus which can be used in the bottom line as operating earnings. This makes the short term stock look good- great for exec bonus and high fives for the Power point rangers. . .

   ANNUAL FUNDING NOTICES
   http://www.boeing.com/boeing/companyoffices/empinfo/benefits/spds.page
   THE STORY OF JOELUNCHPAIL WAS DONE IN 2008. IT STILL APPLIES
   http://tinyurl.com/JOELUNCHPAIL2
   case can be found at http://tinyurl.com/BAMILLSAP2001

   66. MDC’s ExecuGve Council knew about the large surpluses in the salaried pension
   plan. The pension surplus continued to be an issue for MDC from 1991 through 1993. By early
   1991, MDC focused on the cost of company-paid health care coverage for both its current and
   future retirees. MDC management employees Rich Smoski, James Proffitt, William Austin,
   Mike Becker and Ruth Reeg prepaed studies of these costs and shared them with Chairman
   McDonnell and Chief Financial Officer Herb Lanese.

   health care paid for by the company when they retired. In addition, under the collective
   bargaining agreement hourly workers who had not crossed over the age of 55 when the plant
   closed received no retiree health care coverage
   67. On October 8, 1992, effective Janua_ry 1, 1993, MDC terminated company-paid
   retiree health care coverage for both current and fnture non-union retirees and their dependents.
   After this change the non-union salaried health care coverage was entirely funded by retiree
   contributions.
   68. Mr. Smoski, one of the persons involved in preparing these studies, testified that
   what motivated MDC to terminate retiree health care coverage for its current and future salaried
   retirees was cost. The decision to end retiree health care coverage not only impacted MDC Tulsa
   retirees, but salaried members of the Plaintiff class who would no longer be entitled to have their health care paid for by the company when they retired. In addition, under the collective
   bargaining agreement hourly workers who had not crossed over the age of 55 when the plant
   closed received no retiree health care coverage.
   ==== UH OH !!!

   69. Mark H. Allen also testitied as an expert witness for Plaintiffs. Mr. Allen’s
   expertise was in the area of employee benefits and mergers and acquisitions. As a business
   lawyer, Mr. Allen conducts a broad range of business work and is involved with mergers and
   acquisitions and employee benefits. Mr. Allen testitied that MDC pension plans were in an
   overfunded status and that the overfunded status of the plans resulted in value to the company.
   70. Based upon a review of the Defendant’s summary plan descriptions and ammal
   reports, Mr. Allen found that the plans were substantially overfunded in 1992 and 1993. Mr.
   Allen identified a number of reasons why it would be good for an employer to have an
   overfunded pension plan. The predominant reason to overfund a plan is to effectuate the
   prepayment of future retirement benetits, while the monies invested in the plan accrue income
   tax free.
   71. Once a company like MDC has an overfunded plan, the company may use the
   surplus funds for corporate purposes. For example, the MDC annual report showed the
   overfunding was used to pay retiree health benetits. MDC was able to monetize the $385 million
   from the pension plans because it was able to use plan assets, instead of other cash to pay for
   health insurance benefits. In this way, the company was able to use the surplus to assist its cash
   flow. The paragraph entitled “corporate cash flow” addressed this issue stating:
   Assuming that after any transfer of the pension plan continues to be in full
   funding, MDC would clearly improve its corporate cash flow for some period of

   time. Retiree medical benefit dollars that would have been paid from company
   assets would now come from pension assets.
   Tr. 188, Pltfs. Tr. Ex. 6.
   ++

   So whats changed ??

8. Shouldn’t all viable businesses do like “Boeing being Boeing” and explore everything (market studies)? No less, the shareholders expect them to know the possibilities and plan.

9. There are various terms for it, shooting yourself in the foot, killing the geese that lay the golden eggs, gross stupidity etc.

   All Airbus has to do is idle along and at this rate Boeing Chicago will self destruct the company. Of to put it another way, have they ever done anything right?

   Capitalism at its best, eat your young

   The Chicago Mafia, the gift that keeps on giving.

10. Richard Aboulafia was reported said in Februay:
    Congratulations,” he said sarcastically. “They saved the cost of a 777 or two per year, and lost the opportunity to work together with the workforce to be innovative and productive.”

    “That seems really foolish,” he added.

    “If you don’t have the workers on your team working with you and feeling good, you’ve lost a big chunk of the battle.”

    I add:
    Imagine how probably a Boeing customer feel now..would his product be delivered in time? would be the total Quality needed achieved?

11. It seems Airbus “stole” my “A320 NEO Plus” name for further NEO enhancements this and next decade 😉

    http://www.aviationweek.com/Article.aspx?id=/article-xml/awx_04_17_2014_p0-679530.xml
    http://www.cardatabase.net/modifiedairlinerphotos/search/photo_search.php?id=00015369

12. Keesje,

    It is a good idea. It is true that it is getting a litle bit a fuselage stretch experienced by section 737 in 1979 before becoming the 757!

    I understand that the A320 neo “plus” size has actually the 737 Max -8 (168 pax, 2-class).

    Then the A322, “real” replacement for the 757-200!

    Not sure if Airbus launches the A322! If the A321 neo “plus” is called and will not be a coincidence!

    Do not you afraid to work for Airbus, no recognition, no pay ??

    Thanks!

    • “I understand that the A320 neo “plus” size has actually the 737 Max -8 (168 pax, 2-class).”

      Yes 200 seats, inbetween the 737-800 and -900. There is a significant gap between the A320 and A321; 7 meters. These days an A320 can fit 180 passengers (28-29 inch pitch..) and a A321 over 220, or even more.
      http://blog.apex.aero/cabin-interior/airbus-offer-higherdensity-a321neo-major-interior-planned/

      From a crewing perspective 199 seats would be optimal because you can handle that with 4 crew members (flight safety minimum). The 737-800 seats about 2 rows more then a A320. Ryanair said the A320s were too small for them. Jetblue, Easyjet and AF said the same.

13. Yes, those ULR aircraft like the 777-200LR and A340-500 are not very popular.
    Thai has been trying to sell its A340-500. http://www.ch-aviation.com/portal/news/23498-thai-board-balks-at-saudi-princes-offer-for-parked-a340-500
    The Sauydi princes offered 23 million dollars for Thai’s A340-500.

    It seem that the 777-200F is slightly more popular than the 777-200LR. So, maybe, just maybe, there will be a freighter conversion to do from 777-200LR to 777-200F.
    It is still unclear if an A340-500 freighter conversion is even viable.

    If you need a private aircraft for you and your family and if you do not use it very often then you can buy A340-500 very-very-very cheap.

    • There are only 50-60 ever build. Surely thats not enough to warrant the development costs for a conversion programm. But would a conversion design be possible that covers both the 777-200LR and 777-200ER without much additional cost ?

      “Developed alongside the -300ER, the -200LR features an increased MTOW and three optional auxiliary fuel tanks in the rear cargo hold” (wikipedia).

14. Because of few Readers on another post engaged in what amounted to arguments back and forth rather than engaging in useful issues, I’ve decided to close comments for a while. This unfortunately penalizes the innocents along with the guilty, but I have neither the time nor the inclination to monitor individual comments.

    Hamilton