“7M7” MOM means opportunities all around US

The prospect that Boeing may launch the so-called Middle of the Market (MOM) airplane seems to be gaining ground.

We’ve reported previously that our Market Intelligence suggests the MOM would be launched in 2017 or 2018 with an entry into service seven years later.

In an interview with Air Lease Corp president John Plueger, he outlined why Boeing has to proceed with the MOM–the response to the 737-9 MAX has been disappointing. We also reported in our interview with Airbus CEO Fabrice Bregier he doesn’t believe a MOM is needed, that the A321neo and A321LR fill the bill. Clearly he is looking at this from a different perspective than from Boeing’s current dilemma.

On the eve of the Paris Air Show, Jon Ostrower of The Wall Street Journal reported that Boeing sees a demand for MOM.

The prospect of a launch of what we’ll for now call the “7M7” (for MOM, obviously), presents opportunities all around the US. And potential anguish for Washington State and Boeing’s local unions.

We fully expect Boeing to compete the assembly site for the 7M7.

Depending on a lot of moving parts surrounding Boeing’s aircraft manufacturing (no pun intended), Boeing may not have room at its Everett plant for the 7M7. Will the 747-8 program be winding down, making room for a 7M7? It all depends on whether the global cargo market makes that recovery Boeing has touted for so long. If not, we don’t see that Washington has any chance of winning an assembly site. A new, “greenfield” plant in Eastern Washington is unlikely.

Washington would certainly compete in a national contest.But after giving Boeing an $8.7bn set of tax breaks to win the 777X, does Washington have any more to give? These already extend to 2040. They could be extended well beyond that, in theory. In fact, these breaks were an extension of the Boeing 787 tax breaks granted ion 2003 and the World Trade Organization found those breaks to be illegal. WTO is pondering whether to open a new trade dispute over the additional breaks.

Boeing is expected to demand new concessions and a contract extension from its touch-labor union, the IAM 751 (a District of the International Association of Machinists) as a condition for any siting of a 7M7 assembly plant in Washington. The current contract runs to 2024 and was extended, with concessions, after a bitter, bitter campaign and vote in January 2014 that pitted 751 against the parent IAM and member against member.
Would Boeing automatically locate the 7M7 at its Charleston (SC) plant? Boeing has more land there than it needs, a lot more. But the IAM is trying to organize the plant, and while it is an uphill battle (and in our view, unlikely to succeed), Boeing surely wouldn’t want to dramatically expand to another unionized facility.

Boeing has facilities in Alabama (Huntsville) and Texas (San Antonio), which are non-union and where there is embedded experience. And, of course, Boeing could seek to put a plant anywhere with an entirely new workforce. This didn’t work out so well at Charleston, where quality control, turnover and a slow learning curve has hurt. Lessons learned will be important should Boeing go to another greenfield site.

 

32 Comments on ““7M7” MOM means opportunities all around US

  1. Well, how about St.Louis where F-15 and F-18 may finally wind down ‘just in time’?

    Jon’s article cannot distract from the fact that a notional 7M7 is a very elusive spot in airliner design space.

    Single-aisle is too close to the 737/321 and a new twin-aisle would be too costly to compete with the 330. A 787-3 Mk.II created as a direct shrink/downgauge from the 787-9 may be an option.

    But the market may get swamped with cheap second-hand 787-8s and 33ceos early next decade decade. Perhaps they would just make do.

  2. A 787 or A330 version for MoM roles weighs about twice as much as a NEO 321 or rewinged stretch. And has double the range unless you remove fueltanks. And has enormous long haul cargo capacity. At roughly double the cost of a NB. Boeing found out just in time & cancelled.

    Dramatic things could happen if Boeing feels the 737 can soldier on until 2030 though..

    • I agree, of course.

      In terms of business case, nothing would beat a 322NEO based on a stretched 320 fuselage with a new wing and 2nd generation GTF engines. Wouldn’t cost half as much to develop than an all new airplane and most of the current production infrastructure could be re-used.

      That’s why I guess Boeing will soldier on with the 737MAX as long as it captures more than 40% market share. Calling the MAX-9 dead is premature.

      The message is: It looks like Airbus can counter any Boeing move at much lower development cost, giving them a significant price advantage. For some time to come, new technology is unlikely to provide Boeing with a performane edge that would outweight the Airbus cost advantage and justify the added maturity risk.

      • That’s why this plan will be significantly larger than a A321 or even A322 with an MTOW between at least 120t up to 150t with an floor area about an A330-200.

        Even if it is a single aisle it will be about 4,2m (for a wide aisle) which has significant advantages above 40m lenght. It will have a GTF about 46 kN. That is simply not the same.

  3. What about long beach? The production of the C-17 is coming to an end. So boeing has they facilities builted and ready to be used. Furthermore long beach is connected by highways rail line s and deep sea port. California will also give some form of subsidy. The only disadvantage for boeing is that long beach is unionized.

    • I’m with you. Long Beach is the best bet. Historic location, workforce is available, and California will throw you a great deal to move the 7M7 there.

      Alternatively, you can always build a brand new factory in my home state of Nevada. We’d take care of you….well, they will since I am away..

    • The current Boeing management wont like that they would have to produce it in a non right to work state where they will have unionized labor.
      I think California is out of the question.

      • If Boeing designs the MOM (797) properly it might come as fully stuffed tubes from Wichita and pretty quick major module final assembly in Long Beach with IAM mechanics surrounded by Kuka robots will be quite effective. The skills are there as the before when the best B-17’s were assembled here. Wings can also be flown or shipped from Japan that do not want to miss the train again on new Boeing wings as they did on the 777-9. The real danger is getting cost effective and reliable 44k engines. that can stay on wing to 10 000 cycles.

  4. Interesting. I agree that the facilities in San Antonio would make the most sense. It behooves Boeing to not go down the CHS route and the debacle that started out as.

    “Single-aisle is too close to the 737/321 and a new twin-aisle would be too costly to compete with the 330. A 787-3 Mk.II created as a direct shrink/downgauge from the 787-9 may be an option.”

    The market feedback is that the MOM is going to be a single aisle plane with 5-6 hour range and capacity close to the 757-300 or the 767-200

    • Senior Vice President John Wojick: “What we have heard back pretty consistently is interest in an aircraft that is slightly larger and can fly slightly farther. So they want an airplane about 20% larger than a 757 and something with 25% greater range than a 757.”

      I interpret this quite different: The market feedback is an airplane with 20% more seats and 25% more range than the 757-200w. As an example United Airlines have between 142 to 169 seats in the international version and 182 seats in the domestic configuration. Nominal range for the 757-200w is 3900nm.

      So the market feedback is a plane with 200 to 220 seats (3 class configuration) capable of connecting city pairs with a flight time up to 9 hours (maximum allowed with a single flight crew, in other words a plane without crew rest facilities).

      And they want this with single aisle economics. The Airbus A321lr needs a few extra seats and one hour more range. This could be a A322. Boeing needs a new aircraft.

  5. “What about long beach? The production of the C-17 is coming to an end. So boeing has they facilities builted and ready to be used. Furthermore long beach is connected by highways rail line s and deep sea port.”

    It’s now under a 15 year lease with Mercedes Benz
    http://www.presstelegram.com/business/20140407/long-beach-to-lose-boeing-c-17-globemaster-production-earlier-than-expected

    “A 787 or A330 version for MoM roles weighs about twice as much as a NEO 321 or rewinged stretch. And has double the range unless you remove fuel-tanks. And has enormous long haul cargo capacity. At roughly double the cost of a NB. Boeing found out just in time & cancelled.”

    I’m not convinced that the MOM aircraft will be dual aisle. A Dual aisle design adds unnecessary weight. My opinion is that Airbus is unwilling to divest in a MOM project because the A321 NEO and the LR are the closest thing to a 757, but NOT a 757. 2 of the largest operators have already voiced that the LR is not for them (UA, AA) Cargo<paying passengers. The largest of them all, DL, with a fleet of around 140 with 5 more on the way, has already ordered the 45 A321 CEO with 140 737-900ER's ordered so a LR order or NEO is unlikely, in the near future.

    • Mercedes-Benz USA leased the former 717 factory and converted into a facility that consolidated all of their various operations in SoCal, including the Vehicle Preparation Center, into one place. MBUSA did not lease the C-17 factory.

  6. Not sure but I’d think that whether composite or aluminum Wichita would also be evaluated. Spirit certainly should be interested in this new family/possible derivative/little sibling of which might replace the 737. Curious if Fort Worth is also a candidate. F-16 plant is/was huge, and F-35 is unlikely to need all of that space.

  7. I think we need to see what they propose before it can be commented on.

    Its wide open as to what they can do, its not going to be a 767 light or NEO and not a 787 shrink.

    New engines will be needed from the looks of it so there is a serious completion to be had and single source or dual.

    Other than that there is not anything to say.

    • Why not a 767-200NEO or light? It seems to be the in thing to do, take an existing frame, add new engines, lighten the frame, etc, and since the 767 line is up and running, it would be the lowest cost option for Boeing. With about 200+ seats and a 5000 mile range, it should sell quite well and have a quick EIS time frame.
      Its being done on the 737, A320, A330,E2-175, why not a proven seller with the right range and seating.

      • I think Boeing is calculating with a rewinged A322 as a reference.

        You need few specs to conclude this would make a 767-8NEO look unattractive for airlines from the start.

    • There is an interesting point, engines. Linked in with the article from last week, would Boeing go for a sole or dual source engine package?
      Considering that the GTF seems to have an advantage, would Boeing go sole source with them at the cost of their relationship with GE, or would the dual source it, or would they even go sole source with GE?
      The last one would surprise me.

  8. I think Boeing indicated they will keep above A321LR +10% in terms of capacity range. Avoiding a direct confrontation.

    Ad 15% for the stretched -900 version and 5000 NM and the wing size, OEW, MTOW are pretty much defined.

    A conventional 20 inch single aisle / 18 inch seats (A320) probably becomes structurally and space wise inefficient for medium long flights.

    But I’ll repeat it does’nt make the 170-220 seat (Cargo, High BPR/sfc) MAX-NEO situation go away. Another 2-3 real bad switches and the agenda is open again.

  9. If Boeing is contemplating a new MOM aircraft with an entry of around xxxx with 5-9 hour range, single aisle, with capacity of around 250 passengers, then they’ve likely determined that any derivative of the 767, 737 and A322 (whatever that is) is not going to work.

    I’m with Transworld in that until more is brought forth to the table by Boeing, there’s nothing really to say.

    • I’m not sure most people are aware of the investment Boeing is making into the Everett WA site. Given the size of the composite wing center I find it hard to fathom that it was developed only with the 777X in mind. I’m pretty sure that BCA was aware of the MOM (797) being right around the corner when they recently decided to increase manufacturing capabilities. The 747 is on life support and will not be in production post 2020.

      I think the state of WA would amend the current tax breaks and allow Boeing to locate the Everett 787 line to South Carolina in exchange for the MOM aircraft.

      • That ignores the current efforts of McNenearny to close out Everett and Renton at all costs.

        Well, I think the only reason it wasn’t (isn’t) is the cost to his salary and cause the stock price to plunge (i.e. billions spent on all new infrastructure wherever)

        It does fly in the face of negating the union though in reality as the 787 is not making any money and the 777 is (was) its a false thing anyway.

        New CEO, maybe different. Maybe not

  10. The 767-200NG wil have to have :
    A aluminium lithium wing and fuselage with 10% weight reduction.
    A higher ratio of wing of 11.5 this can be accomplish with split scimitar wingtips and trailing edge extension like the a330neo along with an aerodynamic clean up of both the wing , fuselage and HLFC tail fin and horizontal stabilizer.
    New scaled down GE9X or pratt and whitney next generation GTF with laminar flow nacelle.
    Finally convertion of all systems from analog to fly by wire.
    An optional 8 feet stretch should be under consideration.
    Fuel consumpton will be about 10% lower than the a321neolr
    The overall cost of the programme would be around 2.5-3 billion dollars. Launch around 2018 and EIS around 2022

  11. I will as always cast my vote for a 2-2-2, 48m long 40m folding wing, 100t model to come in to the market slightly above the A321, for an optimized 1000 to 2000nm 200 seater.

    Then a 45K engine, a second 50m wing, a 55m length for 5000nm range.

    The 757-300 is a limited idea in any era.

  12. The SonicCruiser, NSA, 787-3 well shelved after strong unfavourable market responds.

    I wonder if we are heading for a similar scenario. E.g.
    – Japanese and Chinese airlines, United, Delta showing Boeing large A321NEO LOI’s,
    – Airbus testing the water for a 320 stretch NEO 200 seater.
    – Hundreds “Undisclosed” MAX orders being “postponed”.
    – The GTF proving structurally better then the LEAP..
    – a combination of these events.

    It could force Boeing setting new priorities again. Listening to their customers iso engineers.

    http://www.theblaze.com/wp-content/uploads/2012/05/Boeing-Sonic-Cruiser-Model.jpg

  13. It would seem airbus holds all the cards in this battle, with broughton in wales now proficient in composit wing design/production, and the inferstructure already in place to cope with a rewinged and stretched a320 family product (a322-200), brand new avionics derived from neo and or a350, and a close working relationship with pw with a high efficient engine, it could be brought to eis in half the time and at less than half the cost of a boeing mom product
    technology hasnt progessed or wil not enough in the next 5 years to make a mom outshine and outpreform an a322, and also theres the pilot training, comonality and service centres for a320 already in place. I would imagine plans are already in place at eads to counter any mom boeing rolls out. Imho boeing missed the boat on this 10 years ago and only have themselves to blame.

  14. How about an updated 757-300 with a new composite wing, space for larger fan engines, and a new 787 based cockpit. Pretty much what Boeing’s doing with the 777X. They’d get some efficiencies from reproducing what they’re doing now on the 777.

    • Ruled out as the 757 was reportedly and expensive aircraft to build.

      sometimes an upgrade works (777 and 330) and sometimes not.

      this seems to be a case of not.

      by the time you get what they seem to think they want then its pretty much an all new program anyway.

      • You’re probably right, but with a new wing and a new, automated riveting system for the fuselage, they could change the production cost equation. It’s hard to think of anything all new which could be lower cost for equivalent performance.

        • I think that is the rub, they are not looking for equivalent performance, they would want/need superior performance.
          If they manage that, then perhaps the lower cost portion isn’t as important.

  15. Overall I am puzzled by MOM.

    They know there is a single aisle market (or even a light twin if the economics could be made to work)

    As noted the A320 can morph into a 737-8 competitor with a bit of work and probably will when the A321LR project is on its way.

    Also seems a new wing on the A320 series would close to negate anything Boeing can do all new.

    Other than out of auto clave curing, there is nothing technology wise on any horizon that is a game changer, its all refinement of existing.

    The need is the 737-8 and -9/A320/A321 replacement not an all new segment and how the MOM would work its way back to that category.

    Maybe it makes sense to them, or maybe all spin and hype and something else comes down. Again wait and see.

    • Assuming the market would roughly break down into some proportion of, 150 seaters, 175 seaters, and 200 seaters? Boeing already has a one class and two class 175 seat offering. Even if they replaced it with slightly better offering, is the technology and efficiency the issue, or the issue that the entire market mode is moving to 200 seats? In which case I would say ignore 175, and build the optimal 200 seat aircraft, be it single aisle or double aisle, and let the 737-7, 8, and 9 soldier on in a shrinking market area.

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