ISTAT Day 2: MOM business case remains a challenge

March 1, 2016, (c) Leeham Co.: The manufacturers and their customers remain unclearISTAT-logo_no_tag-(2c) about the need and design of the so-called Middle of the Market aircraft, their representatives said at the ISTAT AGM today in Phoenix. The business case has yet to be proved.

Participants in the Middle of the Market Panel are:

Ron Baur, VP Fleet, United Airlines

Robert Lange, SVP Market and Product Strategy, Airbus

Randy Tinseth, VP-Marketing, Boeing

Bert van Leeuwen, Managing Director, DVB Bank

  • We’re at the 2016 ISTAT AGM in Phoenix and will be reporting on presentations and news from the sidelines.

Van Leeuwen, the banker, said financiers would need to see at least 1,000 MOMs in the market with a broad customer base to feel comfortable financing the airplanes.

(At a media breakfast preceding this panel, lessor CIT sees a market of 2,000.)

Tinseth said Boeing’s biggest challenge relating to MOM is what’s in development today with the 737 MAX, 777X and 787-10. First and foremost, he said, is delivering these on time.

He said the MOM remains a “tough business case.” What is the development and recurring cost, and at what compensatory price can it be sold? Tinseth also said a consideration is whether the MOM might infringe on other products.

Airbus’ Lange said his company is in a similar space. “The accent in the next couple of years is on execution.” He called the MOM “in a gray space,” and also cited price and what customers are willing to pay as crucial. Engine development will be “key” to what happens next, he said.

United’s Baur, a major Boeing 757 operator across the Atlantic, is concerned about the price of the airplane but revenue (the number of seats), operating costs and design also are obvious considerations.

The liquidity of the aircraft, which is the ability to re-lease the airplane after the first lease expires, is another factor, says van Leeuwen.

Lange said Airbus is focused on creating families of aircraft; the MOM might be an orphan, he said. In response, van Leeuwen wondered whether this could be an opportunity for OEMs in China or Russia to enter the market with a MOM. Tinseth said that van Leeuwen’s thought is “an interesting concept.”

Baur, of United, said the 757W is a good aircraft for Trans-Atlantic, but domestically, “the economics are killing it,” and United is retiring these airplanes “as fast as we can.”

Tinseth acknowledged that domestically, the 757 economics “just can’t keep up” with today’s single aisles.

Baur said United allows an extra 10 minutes to turn the 757-300, which is about the size of a single-aisle MOM, which is a trade-off for the extra capacity. United’s 757 fleet is fairly young so UA is not under pressure to pursue a MOM.

A stretched MAX, to what’s been called a 737-10, will be difficult to do, said van Leeuwen. “I don’t see it as a viable solution.” (In a separate interview, Airbus’ John Leahy said a 737-10 would be an all-new airplane except for the fuselage itself, requiring an investment of $8bn-$10bn.)

 

 

 

57 Comments on “ISTAT Day 2: MOM business case remains a challenge

  1. Well of course Leahey would say its 10 billion, its not like he wants any competitor in that segment!

    Nice to get data on the turn around time on the 300 as it is a definite aspect of the discussion.

    Of course the longer the flight the less importance that is, its the fast turn arounds on domestic flights that would be a consideration (not the only one but one)

    You have to love Tinseth and compensatory price! Right, we used to call that the sales price.

    Simply put, is there a 8 to 12% ROI in it for Boeing?

    • I don’t think Leahy is that far off when he says $8-$10 Billion to develop a 737-10 MOM. The 737-10 would require a new wing and all the design and certification expense associated with that wing. So…the 737-10 would essentially be a new aircraft.

      • Not just wing. This MadMax 737 would need ANYTHING new exept the fuse (which is nonoptimal for an MOM).

        It needs new MLG, new center wing box, new wing, new system (avionics), plus stretch … It is essentially a 2/3 clean-sheet cripled by the 737-fuse. I’m not in fovour of a new small TWIN but I think a wide single aisle about 30″ could be helpfull and much better above 45 m length anyway.

        If they proceed with the MadMax 737 they’ll do more of a A321/A322 combination than a real MOM.

        If they

  2. “…van Leeuwen wondered whether this could be an opportunity for OEMs in China or Russia to enter the market with a MOM..”
    I thought that was the the very real situation with the Irkut/Yak 242.

    But back to the 737-9, since even Concorde was able to shorten its main undercarriage leg upon retraction, this is a relatively simple design change for Boeing to do so it can be more competitive with the A321. There must be issues about commonality with the other family that thats stopping this ‘MOM-to-be’

  3. I think the turn around problem for a single aisle could be solved by specifying a dual aisle. That would however likely lead to high costs. An obvious compromise could be wide aisle enabling people to pass each other. The MS-21-400 specification comes close.

    • Keesje,

      I keep hearing about this “Turnaround Problem” associated with single aisle aircraft, yet I have not seen any data or figures that support the assertion…from anywhere.

      Is there data, or studies, out there that quantifies the “Turnaround Problem”?

      • @jimmy: United Airlines at ISTAT said they had to add 10 minutes to the turn-time for the 757-300 over the 757-200. Southwest now schedules 45 minutes turn time for 737-800 vs 30 for the 737-700.

        • Thanks Scott, here’s the cat-in-the-sack unveiled ! Take a 230-seats A321, Ron Baur’ll rate it a 55′-turner (eg Wizz Air). Change that to 25′ and you produce one additional flight before curfew. Add this fact to the difference in the cabin crew roster, not forgetting delta trip fuel and a 199-seats twin-aisle H21QR – Excel spread-sheet in hand – easily undercuts the CASM of the single aisle A321, CQFD. Vs the 738 of SWA, an H21QR would produce near two more legs before curfew, if the average block time/leg is close to 75′ ?

        • Thanks Scott!

          You are the only one that I have seen post any numbers…or anything tangible.

          Again…Thanks.

  4. The MC-21 is at least in the lower part into the MOM market. Certainly an A321 competitor (on paper, lot more to keeping a plane flying of course)

    What they should do on the MC-21 is go for the 400 version immeidaly as there is a market up there only Airbus serves. They will not be able to compete with cut throat A320 and 787-8.

    Boeing needs to change the wing on the 737 to accommodate a longer version regardless and that in turn lends itself to the gear change.

    Complex gear system are not a mainstay of the frequent ops planes. Simpler the better.

    Airbus has its issue with the 90 degree turn the nose wheel has to do on the A320 series.

    And yes they would loose some commonality, but a lot stays the same as well.

    I think a re-winged 737 is a waste, but then I am not having to convince the board to spend the bucks either (or responsible for said bucks)

    • Airbus used to have an optional 4 wheel landing gear on each leg ( reduces runway loading) for A320 but dropped after a while. Same goes for Boeing , to have an optional extended leg undercarriage for its 737-9 or even a new 737-10, and the rotation problem is solved.
      They probably spent more money on the 747-8’s new split rudder!
      There seems to be more holy writ than in the Vatican that says you can change the 737 undercarriage

  5. “van Leeuwen wondered whether this could be an opportunity for OEMs in China or Russia to enter the market with a MOM. ”

    If not for their financial position, it could also be a very interesting place for Bombardier to develop another “family” – have CS100 / 300 and a future CS500 covering the 100 – 180 seat market at CASM below Airbus and Boeing and then develop a new range of MOM products in the 180 – 250 seat range.

    Snapping back to reality, of course it will not actually happen.

  6. Randy, Baur and Leeuwen can idle their search engines and settle, as the answer to all their primary concerns is undoubtedly the H53QR MAX …

    • FT, unit cost go skyhigh with your concept, who told you that’s unimportant?

      • Unit costs are misleading, what matters is Trip Yield. Airlines are not selling seat-kilometers. They are selling seat-trips. No customer ever stood up mid-flight saying “Thank You, I only paid for 267 seat-kilometers so I guess I’ll have to get off this airplane now !” Into Trip Yield you get the effects of shorter turn-arounds, higher 24h productivity, dilution of Night Stop-Over Costs, Product Differentiation, lesser fuel from lower OWE, lesser crew costs from reduced crew roster, JC Decaux “Mobilier Urbain” fees from thrice 44″ x 25″ KabinKino flatscreens, second carry-on ancillaries, APEX-driven higher cabin factors, empathy-sensitive frills sales boost … add on the savings in NRD&D costs of H53QR vs any clean-sheet alternative MOM project and the decision is straight-forward, keesje ! Carries more water he whose pail is deeper … Airbus advertise A321 efficiency based on unit costs @ 240 seats, an “Offre de Gascon” nobody in this industry ever gobbed. Leahy himself recommends for Randy to span the 753 MAX horse, a MAX Family endorsement to the bitter end but he didn’t reckon with the U-turn Jack-in-the-Box APEX-boosting capability of H53QR MAX whereby Boeing may once more surprise the world !?

        • APEX-boosting capability, like Legend Airlines, Maxjet, Skymark, Midwest, EOS, Silverjet; great products / cash machines..

  7. I take it the domestic 757 is expensive because it is too heavy or oversize for a two hour flight. One MOM aircraft area is 753/762 size with 2500nm range, another MOM aircraft is that size with 5500nm range. Two different wing/weight/engine combos.

  8. I would not be surprised if Boeing doesn’t go for a dual aisle. Because it wouldn’t solve the 200 seat/3000NM A321/739 problem effectively.

    Also the star 737 MAX-8 gets soundly outsold these days by the A320NEO. Boeing has to cover this (biggest) segment competitively. Or their NB market share dives under 40%.

    An acceptable compromise could be a wide single aisle, reducing the turn around problem, giving long fuselages stiffness and adding cabin flexibility and LD3-45 options.

    http://i191.photobucket.com/albums/z160/keesje_pics/Boeing%20797%20NSA%20NMA%20MoM%20keesje%20A320_zpsnwwwvmo3.jpg

    But Boeing has to move fast. Probably United and Delta told them they’ll issue an 200 seat RFP later this year and Mobile A321s can easily be had. Maybe Boeing is too late already.

    http://www.madeinalabama.com/assets/2016/02/MAAS-Alabma-Airbus.jpg

    • Keesje:

      Can you back up the assertion that the 737-8 is outsold by the A320NEO?

      My understanding is the -8 has done well against the A320.

      The big difference is the A321NEO per my understanding.

      Its the A321 that it nor the MAX200 or the -9 have done well at.

      I don’t have those figures available but they have been cited previously.

      So how many A320NEOs have been sold vs 787-8? I won’t even go with Boeing in that and take the total A320NEO vs the Total 737-8 to date regardless of who got the jump on whom.

      • If anything the A320 is on the decline. Too much capability in wing/engine/weight/range for too little floor area.

        Production is clearly peaked and on the decline 2013-352, 2014-306, 2015-282, and that is without the NEO capability increase.

      • “Can you back up the assertion that the 737-8 is outsold by the A320NEO?

        My understanding is the -8 has done well against the A320.”

        Many people feel / believe so. It’s perception management, Boeing is talking about the 737-8 as the winner. In reality the A320NEO is 700 aircraft ahead of the 737-8, while it started selling 9 months earlier. I guess the 737-8 is doing “relatively” well against the A320. http://www.pdxlight.com/neomax.htm

        • Keejse: Thank you for helping out and actually listing numbers instead of sending me to a site that I can them compile the numbers myself.

          So, my quick interpretation is that A320NEO has got 3312 firm orders (which I take with a whole barrel of salt)

          737-8 an 9 have 2871 (I am going to be ornery due to the above and insist that the 8 and 9 are direct competitor to the A320NEO not the A321 with a great ability to justify that.

          So with a 9 month lead, averaging out the numbers per month (which I said I was not going to do but I am now ornery) The 737-8 and 9 are ahead of the A320NEO on a pro rated basis.

          Feel free to do the math yourself.

          Feel free to disagree how firm the 737max orders are as well.

          • TW nice twist, combining 737-8 & -9 but leaving out A321.

            “the 8 and 9 are direct competitor to the A320NEO not the A321 with a great ability to justify that.”

            There’s two rows between 737-9 and A321, same as between A320 and 737-8. Biggest -9 customer United will replace 757s with 737-9’s.

            There no market ratio behind your statistical construction. Tinseth & Conner don’t agree with you, nor do I.

            The A320NEO is ahead of the 737-8 in every respect.

          • 737-8 is ahead of deliveries of A320. Any guess when the A320 will outdeliver the 738?

            If the A320 has over 3000 orders, but less than 300 deliveries, what’s going on? Lots of long term orders I guess like the 787. Is selling slots 10 to 15 years in the future good fiscal discipline? Sounds very 787-like.

          • Ted:

            737 MAX is not remotely ahead of delivered.

            One development aircraft is flying, Airbus has something like 6 A320 family flying, one of which was delivered.

            Boeing will not deliver an aircraft to a customer until next year.

            some advantage in having only one engine to certify involved (unless said engine has issues then it all halts while its revolved)

          • I’m going with same body length with either engine choice. I still don’t see the A320ceo/neo outdelivering the 737-800/8 in the next five years. Long term, in 15 years, maybe the landscape has changed, so the A320N could beat the 737-8 by then.

          • Keesje:

            Thank you, we keep hearing the A321 beats the 737-9 all hollow on pax and range and approaching a 757 with a total seat count of 240 for short range?

            So if the 737-9 is not an A321 competitor (which I agree) then ergo, its a much better A320!

            By logic then the 737-9 is an enhancement of the -8 and a place for those who do not need the A321 range capabilities but have a larger number of pax needed to carry above the -8 (Alaska Airlines likes it a lot)

            If an Airline needs the capability of an A321 they have to buy one, they won’t get it with a -9, and that is why its outsold. Frankly we could put the column at 0 for the -9 vs the 1400 some odd for the A321.

            If you need a 777-300, you aren’t going to buy a 767-400 to fulfill that need are you?

            So, its makes perfectly good sense to put the -8 and -9 into the same A320 Category.

            TED: You are right, Airbus will not deliver A320NEO family or A320 CEO over Boeing 737 family NG or MAX for the next few years

            Many experts think both will have to throttle back as the numbers are not sustainable and some of those order like Norwegian, Lion and Air Asia X are shaky.

          • Not even Boeing places the 737-900ER/9 against the A320. This is pure fantasy, @TransWorld

          • Scott:

            Thank you, but then Boeing PR has a fantasy world all of its own, I think its well supported. The best you can say about the -9 is its the nearest competitor, that does not mean its anywhere close to the same category .

            I look at what I think is the reality, comparing a 737-9 to an A321 falls flat on its face.

            I have a very nice Passat wagon, it sure does not compete with a Corvette in performance.

            I think its logical to put the -8 and-9 in the same category and accept that the A321 does not have a competitor.

            Or you can created an in between category and say Boeing has 100% of the market and the A 321 is the third segment and has 100% of its market.

            the numbers show that the -9 certainly does not come close to competing with the A321. Its an apples and oranges thing so why compare them when they don’t and aren’t.

            That does not dismiss the -9, its a nice addition to the 737 line and it obviously has some application for Airlines that need a bit more.

            I listed AK Airlines and obviously there are others.

            No matter how you slice that apple though, its not an orange.

            Airbus slotted the A330NEO right under the 787, nice move.

            While Boeing did not do it delivery with the 737-9, in affect its the same thing, an aircraft that can’t do what the A321 does but has a small market under it.

          • While its a new thought on the subject, it does not mean its wrong.

            Sometimes thinking outside the box gets you a different perspective (wrong or not) and may even re-frame (explain) a situation and or discussion in terms that make sense.

            I have read Frequent Travelers N2QR3 or whatever it is, I don’t think it flies (pun) but it is certainly worth considering and thinking about.

            I think we all clearly agree that a 747 does not compete with an A380, though its is the nearest competitor (Boeing or anyone else) . Other than using it as a negotiating ploy, they aren’t the same.

            777X and A350-1000? Closer but are they direct competitors?

            So, the A320 is the nearest competitor to the 737-800/8, but while its close it is not a long and it will always be behind the 737-800/8 if you pack them both the same densities. Not enough to change a fleet for.

            Close enough to be considered equal from the sales numbers? Well that’s how they do it.

            But if you look at the 737-9/900 vs the A321 it obvious why it does not sell nearly as well, its not an A321. Less close than an A320 and 737800/8.

            So at what point are they more like a 747 and A380 than and A320 and 737-800/8?

            Either the 737-8/9 are close sibling and in the same category competing wise, or the 737-9 is an in between category that Airbus does not have a direct competitor for and the A321 is in its own category Boeing has no competitor for.

            Clearly the A321 in its own slot is much superior and successful not only in sale but production to the nearest competitor of the 737-9.

            The A321 is clearly outselling (and more important out producing) the 737-9, so there is a reason.

            Basically if you are going to move up, for most operation the A320 family is offering an overall better progression and the A321 stands alone leaving the 737-9 in some limbo land of its own.

            So, the 737-9/900 is not a bust or a dog, something like the 767-400, a nice addition to the 737 line and low cost to make (and as close as they can some to an A321 which offers 737 exclusive airlines a step up) but no where near the same capability.

            I don’t think its fantasy, I think its realistic. Happy to have others disagree of course, that’s what this is all about.

            But the basic question is, if the 737-900/9 are direct competitors to the A321CEO and NEO, why does it not sell or is produce nearly as well?

  9. Boeing can play with adding doors and door sizes for boarding on the NSA. Having the normal one behind the cockpit and an extra wide one over the wings were pax can go fwd and aft would boarding a new 250 seat narrowbody feasible. Of cause airports has to comply putting this extra drawbridge in place but the USA and Boeing can put pressure on different gouverments to make it happen.

    • Really?, the US Government is going to beat up on Australia, Japan, Chins if they don’t put in extra jetways ? It certainly would not make any difference in Zaire.

      I don’t think so.

      Boeing may entice them to do so with the offering and the advantage but that would be pressure by the airliners buying the aircraft, not Boeing.

  10. At my Machiavellian best I, as the CEO of Airbus, would push this agenda for a long time and let Boeing invest a good few billion in a new MOM creation only to mercilessly destroy it on acquisition cost with an A321NEO LR/A338NEO combo. Isn’t the MOM the size of a B767? I don’t see many sales of these, what about the 787-3? The numbers do not add up.

    At the same time I would be looking at the A320 replacement going forward with a view to replacing this product whilst at massive booked current sales with a combination of two aircraft. The best bits of all designs out there can be hoovered up (Wide aisle, AlLi fuselage, low manufacturing cost CFRP wing, ultra high aspect ratio wing, 2nd generation GTF etc etc) and factored into the definitive replacement for 2027/8.

    Two wings, possibly two fuselage cross sections but all the systems applicable from A350 and maybe one exciting visual clue to modernity, maybe play with a much reduced but effective empennage or go with props on the smaller version. Unless we have truly disruptive technology this is the only way forward.

    But first let Boeing waste their money and opportunity chasing the chimera. That is why Randy T is reticent and John L is gung ho.

    I am surprised that the board aren’t snapping me up as we speak

  11. Rightly or wrongly we are talking about an all new shorter range optimized fuselage and more importantly for the 4500 mile segment (and shorter)

    Fuselage on 767-200 was beefy enough to handle extension to -400, that’s too heavy to be efficient at shorter ranges. Wing was designed to carry the heavier aircraft.

    All new engines with GTF offers a major fuel burn improvement (Gen II GTF as it were. )

    I am not saying Boeing is right, there is a significant market, just that its a different design criteria and where its optimized for.

  12. Off topic but if the pictures are accurate, what looks like a honeycomb like structure seems to have been found in Mozambique channel.

    A bit suspect as its finding is connected to an MH370 blogger, I have not see a tail structure inside before but have seen a helicopter blade section that looked like that (smaller of course)

    Supposedly has no step on it.

    No scale yet but definitely interesting.

    • As I was suspicious of, the so called MH370 searcher and blogger has come up with a clean and pristine piece of aircraft. No barnacles or weathering on it.

      I am not familiar with the 777 tail structure, but the experts say its not a honeycomb design. Ergo, BS.

      News organization should be embarrassed.

  13. How to define a MOM? I think every discussion concerning the MOM has to much focus on number of seats.

    In a comparable, long-range, three class configuration the A321-LR, A330-200, A330-900 can be configured with respectively, 175, 242 og 304 seats.
    See https://airlinesandmore.files.wordpress.com/2015/11/asiestos-tap.jpg?w=545 for TAP Portugal’ seat maps. TAP plan to use these frames between Portugal and Brazil. The gap in seating capability between A321-LR and the A330-200 is about the same as between the two A330 models.

    What is really needed is an aircraft that is optimized for middle of the marked RANGE, that is optimized around 4000nm.

    In this sense the 757-300 is not close to a MOM as it is a short range aircraft. The 757-300 can’t fly transatlantic. The A321-LR at its maximum range (not optimal range) at 4000nm.

    I think a MOM could be the size of A321 (plus a little), but have a wing, MTOW and aerodynamics optimized around 4000nm. That is, optimized for 200 passengers, which is maximum for with a four FAs crew, optimized for 7 to 11 hours flight time, which means no extra flight crew and no need for crew rest facilities onboard. This flight time interval is also good for frame utilization, completing a round trip within 24 hours.

  14. I continue to think that what B needs to build is basically a better A-320 with multiple fuselage lengths (up to about 752 length) and a choice of two wings, for short/medium range and for long range. A +/- 6″ wider cabin interior would give it a comfort increment over the 320 series. IMHO they should have started this in 2011 instead of Max but that’s history now.

    Alternatively, with about a 13′- 2″ width cabin (737 is 11′-7″ so that’s 19″ wider) they could do 2-2-2 seating with with about the same seat width as 737/max. Given four aisle seats and two window seats it would be more comfortable and offer great loading and unloading. With modern design the fuselage O.D. could be a bit under 14′. The 320 is 13′-0″ O.D.

    For long range flights it could be 3-3 seating but with a 12′ more width than an A-32x to put into (middle) seats/armrests and the aisle. This would, however make the 9 and 10 abreast 87 and 77X very tight by comparison.

    Boeing does have a tough choice in this area and airbus can respond (relatively) cheaply with an A-322 with a new (bigger) wing.

    Hopefully we’ll find something out soon.

  15. All these airlines that you are listing did the same mistake : they sold quality at a Premium. That doesn’t work ! You need to offer your own bottom-quality seats at market prices, then let offer vs demand auction rules apply exploring the individual PDEH of the prospect Buyers until the ticket sale is confirmed, where PDEH = Purchase Decision Enactment Hinge. This way the individual Price-Quality elasticity per Product will be fully explored … this sales method liquefies the Market, exploring and safely tapping the PDEH until the sale is confirmed. Collecting ticket yields closer to whatever price the traveler is prepared (deep inside) to pay for his or her preferences is a diggin’art that any up’nrunning Retail Psychologist’ll master to excellence, keesje … but anyway there is no need for your RP to be “one of the few”, ’cause CASM-wise, H53QR MAX is easily proven the challenger vs A321, so in case of a price war, the aircraft that’ll be priced out of the market is A321, not H53QR MAX …

  16. It is far, far past time to retire the 707/727/737/757 fuselage, at least as any potential consideration for MOM. The 738 and the MAX will be OK for most domestic UA hauls, but the paxex of a 757 across the Atlantic, or a 737 west coast-Hawaii are terrible. Leisure travelers tolerate it to Hawaii, often a once-in-a-lifetime (or perhaps once-a-decade) destination.
    But business travel that realistically takes place in Y+ on Delta, AA and UA 757s regularly to Europe are getting old. Sure, it beats connecting from a widebody if one lives in smaller markets or is headed to one. But if the future is a single-aisle MOM, it needs to support at least 18″ 6 abreast in Y.

    • Even a 2m stretch and the same wing is a bonus. Not for maximum density, but for the same rationale as the 737-9, more space for premium service operations and three class operations.

      Whatever the cost of that stretch, Airbus will recoup it, and so will the airlines. Say the A322 gets a premium price of 5 million more per aircraft than the A321, and the airlines generate 2 million per year more in revenue. Probably a quicker business case than a winglet.

    • Stretching the 737-9, 787-10, and 777-9 out to minimum rotation angle is squeezing the most out of the airframe. I would imagine Airbus will do this with the A322, A350-1100, or an A345 length A330-400.

  17. If used on domestic routes for capacity increase beyond A321, ie for flights of typically 2 hours block time, an A322 could use the A321 wing “as is” and still carry (single Y-class, 28″ pitch) some 46 rows or 276 pax where the A321 carries 39 rows or 234 pax today. The Emergency Exits configuration of today’s A321 (4 x Type B doors) would suffice : 4 x 75 pax = theoretical exit limit 300 pax … Size-wise, such an A322 would be very close to the 753 …

    Now, in order to effectively retrieve the range capability of the 753, or even of the 752 (not to mention the possible 753 MAX/752 MAX), a new wing would be required. That’s an entirely different project ballpark. Airbus wouldn’t move to such extremes unless challenged in its current A321 market Reign.

    So IMHO your suggestion, keesje, is not likely to be followed by Airbus, unless as a reaction to a prior move by Boeing going forward with some MOM venture. The A321 is selling like hot Do’nuts “as is” and the Airbus beancounters are not likely to relax their tight grip on new ventures, awaiting better financial visibility for the “danseuse” A380’s ramp-down and for winner A350 ramp-up, plus fully successful A320 NEO family and A330 NEO deployment …

  18. FT sometimes first mover strategies pay off. The NEO being an example. 1000 sold / operator switches before Chicago could react , forcing their hand. For a A320 based MoM it could go the same way.

    • In some ways you are correct … and we Geeks here would enjoy the market dynamics of an early full-scale A322 move by Airbus. Again Boeing would be caught the pants down forcing a precipitated response from Chicago, prone to miscalculations and erroneous tactics, as always when cornered or late …

      Let’s have the fun, keesje ?! I hope you’re right, because as I see this game, with the scale economics of the largest A320 family sibling, there’s enough meat to dish up from that – in fine – somebody may see the logic of (1+3+1)/(1+2+1) specially on medium-to-longer ranges where a MOM will be at ease.

      • @ K, FT

        Could we add a minimum change A320.5neo that takes the fight directly to the MAX 8/ 200 and then all the bases are covered. I would be very interested to see the margins achieved by the 321 vs 320 at present.

        So in summary a320 + a320.5 to cover the middle ground and the a321/2 to generate real margin at the top end. But of course do not announce a322 until the MOM concept from Boeing is clearly understood

        • The MOM seems to be all about range and not aircraft size. The use of a new wing that apes more the b752 dimensions would give any of the current a320 range more capability. Would it however recoup the investment with sales over and above the cannibalisation of existing orders received? Why would Airbus take on its own high margin winners with a substantial additional investment.

          The question to me is that the A320 platform has turned out to be such a capable one. When will it start to be seen as outdated/ beyond development potential much as the B737 is (sadly). It has barely been changed since first introduction. What will knock it off its perch and in what timeframe?

        • A A320 stretch is included in my link. The capacity difference betwee A320 and A321 is a whopping 7 meters or 7/8 rows. Several large operators openly asked for a optimized 199 seater over the last decade.

          http://i191.photobucket.com/albums/z160/keesje_pics/AirbusA320NEOPlusConcept.jpg

          I have a conspiracy theory that a straight forward 200 seat A320NEO, slightly (2 rows) larger then 737-8, would be an instant hit. Half the A320 backlog could convert and Boeing would launch an NSA asap.

          That last consequence is something Toulouse probably wants to avoid as long as possible. A 737 on life support is much better to compete with and the likes of DL, UA and AF could become NSA launching customers.

    • Keesje:

      You forget the economics. I has to be paid for and no program stands alone, you have to determine where to put your money (which is limited) to where the needs are.

      You and OV99 build aircraft on photo shop but you don’t have to be responsible for the consequences of all those models you guys have come up with (tens of billions out with no money coming in)

      As the old song goes, know when to hold em, know when to fold them.

      I would not call the NEO a first mover, its simply a low cost progression and frankly it was as low a cost progression as you can get away with. I admire the how deliberate it was. Get the most bang for your buck as they have the A350, A380, A330NOE and the troubled A400 program all demanding money and engineers talent that is also not unlimited.

      So yes they could stretch the A320 a few frames and match or exceed the 737-8/9 series but would it get them anything significant they don’t already have? they certainly have the sales numbers on their side.

      More importantly they also have the A321 that not only has sales, its has current production numbers beating the daylight out of Boeing against the 737-9.

      There you make good money as you get far better pricing when the other guy has no direct competitor.

      You can always do a new wing if Boeing comes out with something competitive, or you can ride your investment and ROI and put it into something else while Boeing struggles to catch up.

      An all new program is going to take 6 years so you have that and plenty of time to assess what you need to do to at least match it. and if you match it at the current then you are going pretty darned good and can compete in the other segments.

  19. I simulated the dynamics of a fleet of 222-seater A321 @ 30″ pitch 3+3 vs the same fleet (in number of units) of H53QR (assuming a new wing plus 2nd generation Max engines) @ 28″ pitch 1+3+1, deployment on short-to-medium range routes (not really a MOM application), OWE of H53QR = 58.8 metric tonnes, cabin length from rhs doorsill 1L —> lhs doorsill 4L = 1,522″ = 38.74m … I found that if CASK of A321 = 100.0 then CASK of H53QR = 98.5 … For RASK I found 100 for A321 vs 117.0 for H53QR., giving a frank yield-advantage to the twin aisle 757. The assumptions are taken out of FT’s hat, but would withstand avgeek scrutiny to the best of my intentions. However, payfreight was left out of the picture …

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