Leeham News and Analysis
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Leeham News and Analysis
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Boeing has MOM sector “crisis,” says Leahy
June 5, 2017, © Leeham Co.: Boeing has a “crisis” in the Middle of the Market airplane sector, declared Airbus’ top salesman.
John Leahy, COO Customers, Airbus.
Development of the 737 MAX 10, which is expected to be launched at the Paris Air Show in two weeks, won’t solve it, either.
John Leahy, COO Customers for Airbus, made the remarks today during a small press event at the Annual General Meeting of IATA in Cancun, Mexico.
Airbus dominates MOM Sector
Leahy said that the A321 has 80% of the market (against the Boeing 737-9).
“They had a 757/767 combination that actually controlled the market,” he said. “They dominated the middle of the market for years and now they’ve lost it. They don’t have the 757 anymore and they can’t think of a replacement. The 767 has faded away.
“We have now moved in to the middle of the market and we dominate [it],” Leahy said. They’re flailing about coming up with idea after idea after idea. They’re constantly creating paper airplanes and going around, saying, ‘don’t buy the A321, there’s something new just over the horizon. I’ve put up with that for 23 years.”
Go do the 737-10
Leahy hopes Boeing launches the 737-10. (This is likely to happen at the Paris Air Show.)
“I hope they do it,” he said. “I think it’s a very marginal airplane. I’m reminded of the 767-400 and the 757-300. They’ve done all sorts of things with products where they’ve tried to squeeze a few extra seats and gave up range and performance. They market never accepted any one of those airplanes. I think this would be a good competitive move for them to make.”
I’d much rather fly on a 767, than an A321.
Yes, but to ride on a new 767 (my fave too) vs a new 321 you would have to be willing to pay more. Few people are.
Make that ‘few people’ equal to ZERO people, if flying their ‘favorite’ airplane costs half a dollar more.
Favorite commercial airplane based on what ?
Favorite airline, and also favorite internal seating arrangement, I can understand.
But favorite airplane ??
Come on.
Favorite airliner (since the L-1649). 2-3-2 seating, 4 aisle 2 window and one middle seat per row. Good width too @ 15.5′ ID.
My favorite seating arrangement beats the 2-3-2 style hands down.
The 2-2 seating of the E-Jets is unbeatable. Half window seats, half aisle seats, hugely pleasant and comfortable.
Fly the 787-9, then see whether you have a ‘favorite’ plane. I DO pay a little more (25% or so) to do this whenever my travel allows. No more cattle wagon for this boy!
D’liner john
The 767 remains for me the most comfortable aircraft in economy followed by the A330’s. The Embraer E’s are also nice, BBD’s CS’s looks good on paper but have not flown in one yet.
It doesn’t have to be new. Delta’s refurb 767s are just fine.
But the 767 is an old gas guzzling 1980s airframe and would not be competitive against the competing A321neo that the other airline chooses to fly on the same route.
Still can’t figure out why Boeing did not offer a 767MAX, they upgraded the 737 several times, the 747 got the 747-8 upgrade and the 777 is going to the 777-9. With new engines, winglets, a weight loss program and a 5500 mile range, it would go where the A321neo will never go. It would be a low cost option compared to a clean sheet and the line is still open. Not that the airlines care about passenger comfort, the 767 is my favorite across the pond.
A 767 Max has a wing too big and the twin aisle 7 across doesnt make efficient use of fuselage diameter. As well the production process is out of date to make at a profitable price.
Now if the 757 was still around, they could use the same wing and tail surfaces, but …
If airlines want to replace their 767-300/ER’s they most likely will NOT go to the A330’s but to 787’s, based on what is currently available.
Replacing 757’s and 767-200’s is Boeing’s MoM “crisis”. They developing the MAX10 to rescue some of the 757 replacements.
A longer range (4500Nm) new wing A321 and higher capacity A322 (new wing) could satisfy most of the 757/767-200 replacement requirements.
So Boeing needs a (real) answer to new winged A321/322’s and Airbus needs a (real) answer to the 767-300/ER’s replacements and 787-9, …and that is NOT the A330-800/900’s.
So Airbus have a “crisis” in the medium and longer haul 240-300 seat market?
I don’t want to sound like a stuck gramaphone but the “original” A350-800 would at least have dealt with the 787-9.
Yet Delta continued to use them from SEA to LHR even when oil was over $100/bbl.
Now oil is under $50 making “gas guzzling” less of a concern.
Be sure to mention your preferences to the airlibes who have your persibal preferences at the top of their list ahead of most passengers who want a cheaper fare. A cheaper fare offered by the vastly superior econonics and availability of a new A321 NEO or existing CEO vs the 767.
Retarded smartphone typing fail. Apologies
endangered species 🙂
Agree
Last paragraph, second last sentence: should it not read “The market never accepted …….”? As it it written now, “They market ever accepted …” does not make sense.
My correction, replace 2nd ‘it’ with ‘is’
Believe size is critical for the MoM from a Boeing perspective, ~220 seats in a typical layout for the 1st model?
This could cover >2000Nm requirements while the MAX10 sectors of less than <2000Nm. It will give Boeing breathing space before they have to develop an NSA.
And we expected JL to say what?
Flash: JL says Airbus is better than Boeing,
You’d think selling some more A380s would be a better use of his time.
He’s doing a brilliant job of that, with his minions Mark Lapidus and co.
Mr. JL should not underestimate brand loyalty. The MAX10 could get a couple of hundred orders in relatively short term, many of those however likely conversions from MAX8/9 orders.
But he must also remember that every MAX10 order is -1 order for the A321.
To be honest, I can’t see what Airbus have to offer in the MoM market at the moment with its current lime-up? The 321LR is also a “marginal” product in my eyes.
….and the A330NEO, not a MoM nor competition for the 787-9, and still without engines!
True
Not really. Any airline who is buying the-10 out of brand loyalty according to you, is probably an airline who would probably have never ordered the A321 in the first place, and would have stuck to the -9 and it’s iterations.
A -10 sold to those airlines is a minus for the -9, not the A321
Yes , I agree Boeing is now selling two versions for the same market space, more of a 9.5.
What happens to those that order the Max 10, they are rewarded for their loyalty by Boeing having a new plane just above them ?
That seems to be the opinión of the leaders as well, and they seen ti be worried now about whether either the 9 or the 10 Will reach a decente volumen. Some of them might now avoided both models to be sure of getting it right.
Ryanair can quickly order 500 of the 737-10 and squeeze 218 pax into it as it would cover their EU+UK routes where Airport runway length is sufficient, just take some 737-MAX200’s then switch for the -10’s. Similar for Asian traffic between todays 737/A320 trafficed Airways with longer runways and up to a few hours flight.
Distance Dublin to Rome is 1000Nm, Chicago to LAX ~1500Nm, Mumbai to Delhi <700Nm, Tokyo to Hong Kong, 1600Nm. Why do you need 4000Nm range for the MAX10?
Can see "Boeing Airlines" using the MAX10 on 2000Nm sectors. MTOW most likely to be similar to the MAX9?
So Mr. JL there could be place for a shorter haul, higher capacity MAX10 and the lower capacity longer range MAX9.
Ryanair have no interest in UK routes until Brexit is cleared up, they’ve already said so.
Judging by the Boeing Boys best efforts seem to be limited to snarky comments about him, his team and on selling A380s (sorry to say it, but neither really useful nor factual), it would appear that he has hit a sensitive spot with his statements.
I especially like his comparison of the 737-10 to the 767-400 & 757-300.
Also true.
That does not make his claim that the A321 and the A330NEO non existent -800 competitors though either.
From my algebras there was something about two negatives don’t make a positive?
When JL talks Boeing or Randy talks Airbus, my brain hits the mute button.
And speaking of Randy, he’s been awful quiet lately.
You must have an insatiable desire for “B fan stroke” writings to ever return to his blog. No idea how he performs in his job details away from “great unwashed public” interactions.
( apropos Vero Venia and Randy seem to share the same ghost writer 😕 )
Leahy is totally wrong here.
.. ok, at least 60-70%
I can understand him wanting Boeing to do the 737-10. Everyone’s been saying the 737 has been stretched too far for 10, 15, years now.
Surely the -10 would be the death blow for the model, and possibly for Boeing too? Now that really would make JL’s job appallingly easy. At least in the narrowbody market he’s already got it pretty easy…
Perhaps Bombardier should buy Boeing in a few year’s time?
Ok, come on. The 737-10 may be a lame duck but its not like its going to sink Boeing.
Cash buybacks of stock, yes.
Failure to develop future competitive aircraft, yes.
But a 737-10? All it does is make them look stupid with its few sales.
Management picking a fight with Canada over the C series and loosing a lucrative F-18 sale, for sure.
Surely the -10 would be the death blow for the model, and possibly for Boeing too? Now that really would make JL’s job appallingly easy. At least in the narrowbody market he’s already got it pretty easy…
Perhaps Bombardier should buy Boeing in a few year’s time?
@Matthew a failed -10 would be a death blow for Boeing ? The most successful commercial airplane in history is produced on behalf of customer request and sales commitments . But Boeing cant afford to build on forecasts alone ie A380 . JLs may have held Airbus back ten years based on the A380 fail ( great plane ) .there are no new Airbus planes in the pipe line being developed . JLs wait to see what Boeing builds and build a better plane is his only success . When given the chance to lead development and innovation he failed to get market commitments and cash outside of launch aids . Not factoring in Cargo from the beginning of the A380 development process was a fatal mistake . The A330 NEO is a good plane but at the cost of A350 orders . No Airbus has to wait and see what Boeing does . Boeing still drives Commercial Aircraft Development not following the competition
I believe the 737-10 will be the death blow of the -9.
The price being asked by the airlines for MOM suggests it will not happen
What would be 737-10 strong points over the A321s?
I don’t expect miracles from an uprated 69″ Leap-B.
I read elsewhere that the -10 would need loooong runways to unstick…
Boeing is playing for time. The MAX10 is targeting Boeing operators, guess they want to give them something not to jump the ship to the A321?
An MC21 build by Boeing in the US could be an interesting move?
What price ‘America first,’?
Lion Air, apparently, will be a launch customer for the MAX-10
https://www.reuters.com/article/us-airlines-iata-boeing-idUSKBN18W2TR
Over the last 17 year Lionair build a fleet / network and now have 120 in operation. Lionair has an enormous 737/A320 series backlogs, 400+? I can imagine there will be conversions.
Two things will occur.
Lion Air is now in the rental business (I know the tech types call it leasing, but in reality its just renting an aircraft)
The 737-10 would give them a chance to kick the can down the road for aircraft they can’t use or lease.
Lionair is already starting to cancel A320s, maybe the plan was to get slots cheap and convert to A321s and Boeing made them a too good to refuse offer to take 10s?
Of course JL wants Boeing to do a 737-10. As said it will kill the -9, it will cost Boeing a lot of money, it will prevent them from launching anything bigger than a -10 and Airbus will just go for the 322 to counter the -10 – which they can do cheaper than Boeing.
Maybe Boeing wants Airbus to launch the A322, an over stretched single aisle.
Then they can build the MoM that will outperform the A322 in many areas. Range, passenger comfort, planing/deplaning, etc. and rule the 200-300 seat market.
Emerging of the C919, MC21, CS300 are starting to eat into the 100-200 seat market cake and Airbus will be left stuck in there.
Maybe Boeing wants Airbus to launch the A322, an over stretched single aisle.
That would be one shrewd move… “We’ll launch a stretch of a somewhat overstretched single-aisle to trick them into launching their own overstretched single aisle. That’ll show them!”
Had a good chuckle, good to see there is still some humor out. Can see a good Boeing-Airbus handbag fight
747-8, Hooray!
Maybe we will see a high speed “tow-by” of the 330-900 at Paris?
Anyone remember the Spy vs Spy vs Spy vs Spy (what mad magazine).
In the end they had no idea who was doing what.
Why would a simple stretch 737-10Max “[…]cost Boeing a lot of money, it will prevent them from launching anything bigger than a -10 […]”?
I guess the -10Max is simple as it is to do somethings else with the engineering capabilities. Most likely the MOM.
The question remains what Airbus will do [with their capabilities]. To set the engineering stuff iddle for years was typically a bad idea in retrospect.
I think Airbus will launch a new wing / fuselage length for the A321/A322 just large enough to reliably perform 4000NM 200 seats/two class. Or 250 seats 30-32 inch single class.
Without auxiliary fuel tanks, micro lavatories, riot causing seat pitches and realistic cargo / fuel / payload reserves.
The current LEAPs/PW1000’s could be used providing 40k lbs, reducing risk/costs.
If over specification can be prevented and Airbus keeps it real lean / NEO standard , it will be hard to beat by anyone. Boeing fully understands, so this is going to be interesting.
http://i191.photobucket.com/albums/z160/keesje_pics/AirbusA321A322NEOStretch757_2_zps9d26113d.jpg
I still can see Boeing burry the MoM and come up with a state of the art NSA, slightly better on everything than the NEO.
The A322 is moving into a MAX9 situation, just not enough seating and range.
Ideally the aircraft should have typical seating of ~220-240 and range of 4500-5000Nm?
That’s would compromise it on 1000-2500NM missions. Guess where 90% of the market is..
http://i191.photobucket.com/albums/z160/keesje_pics/RobertNuttallRRNButilization.jpg
If you mean 220-240 seats in a long haul three-class configuration, then this is too close to the size of the A330-800 and 787-8. I think that 250 pax in an all Y configuration @ 30 pitch should be maximum size for a single aisle MOM aircraft. The 787-8 is close to 300+ pax in an all Y configuration.
I can envision Airbus designing a new wing that is optimized for higher MTOW and high altitude cruise. The Airbus MOM could be in two length variants: 1) The same size as the A321, and 2) a stretched A321 adding two or three rows of Y seats. The first one should have a “catalogue range” of 5000 nm with the stretched variant taking a hit on range (4000 nm “catalogue range”).
Meg, I actually referred to two typical 2-class. Something in capacity between a 767-200 and 757-300 but less than the 767-300 and 330-200?
With premium economy maybe could call it a “2+ class”.
Hi Keesje, wont the following be an option for Airbus;
1)A321NEO: Keep as is, can be competitively price.
2)A321XL: New wing 4500+Nm.
3)A322: New wing, stretch, 200-210 seats, 3000NM.
That’s what I thought a few years ago.
http://www.cardatabase.net/modifiedairlinerphotos/search/photo_search.php?id=00015369
Thanks Keesje, any chance of Airbus pulling the trigger on something soon?
Well so far they have not gone for his twin engine A380, this may suffer the same fate.
Airbus is stubborn, they just refuse to listen to hymn.
Correct, http://www.airliners.net/forum/viewtopic.php?t=767461&start=30
But they did some patents to make sure, a few yrs later. And had some interesting communication.
http://ww3.hdnux.com/photos/14/20/56/3214254/3/920×920.jpg
https://www.google.com/patents/US20130306793
I think Airbus needs to do all three of Boeing launches the 797 MOM.
1) Keep the A321neo as it is. Ramp up production.
2) Longer range variant with new wing. Preferably capable of 5000 nm.
3) Use the new wing for a stretched variant with reduced range.
Airbus “just” have to go for A322 Neo because it is already delivering A321 Neo.
A “mix” variant could be a later option but is unlikely.
Given the gap from the A320 Neo to the A321 Neo, the next logical expansion of the Airbus single aisle lineup is likely the A322 Neo that kessje proposed (4000NM 200 seats/two class or 250 seats 30-32 inch single class).
Just for the record, A320/1NEO orders for 2017, -15. B737MAX 109.
Market saturation for Airbus clients?
Wow, Airbus must be reeling 🙁 Now what’s the number since the -9 was launched?
Delta en Easyjet each took 30 A321 last month didn’t they?
And another delay for the 330NEO, don’t think the TRENT 7000 is high priority with R&R.
Said many times get a CEO/NEO “crossbreed” in the air with CF6-80E1AX’s. Believe there is a market for such an aircraft, 64K-Lb, 230T MTOW, 5000Nm, will put it on an A330-“800” air frame.
Leeham reported a while ago that a Trent-TEN delay was being carried over to the 7000, it is much the same except for the bleed air.
Of course JL wants Boeing to push on with the ’10’, that’s all resource and time Boeing will be putting into a plane that will probably result in more swaps than new sales (or loses for Airbus). It’ll then delay/ postpone them pushing out a MOM plane that will also compete with the A330neo (as they are then claiming they have a great MOM product with the 10).
It seems Boeing won’t/can’t launch the MoM until the engine technology is there for what they require?
What else can they do, launch the MAX10. If they pitch it as a <2500Nm aircraft for high density routes that can equal or better the A321 on economics they have a business case, especially for current 737 operators.
And of some interest, Lion is simply canceling 7 A320, 5 of which are NEO
I have wondered on that order for some time.
Shifting to an A321 order would be one thing, outright cancellation?
No leasing (and those had to be good terms)
Hope Airbus catch a wake-up call before its to late!
The 320Plus could have killed the 737MAX8, but they believe they have enough orders.
Lets see what the status of affairs are in 10 years from now.
Yes, it really is Airbus that needs to catch a wake-up call in the narrowbody market.
Calling Randy!
Still just catching up. 🙂
As the smallest viable large narrowbody I suspect the A320 is in an okay place. A319/B737-700 operators have nowhere else really viable to go to unless they want to switch to BBD and operate a completely different large NB fleet.
In general I’m into plot theories, but I could image Airbus want(ed) to keep the A320-737 situation “as is” (60-40) as long as possible.
An A320″Plus” could have indeed hurt the bread & butter 737-8, stripping Boeing of its capacity niche in between the A320 and A321.
Probably Boeing would have sped up towards a new NSA, which would have forced Airbus into action / investments too.. maybe Airbus likes the 60-40 situation better.
http://i191.photobucket.com/albums/z160/keesje_pics/A320%20NEO%20Plus%20737-8%20MAX%20Airbus%20Boeing%20keesje%20stretch_zpsrn2hdeda.jpg
Airbus could have won over customers from the MAX8 with an A320Plus. Now those MAX8 customers are also buying 787-9’s instead of A350’s?
Seems Airbus is in the waiting game, eventually they going to drop the ball?
Whats after the 330NEO’s (for what its worth)?
Anton
You are a bit too good at making the Boeing 2+2=22. Whatever you say the facts point to the SA sector being a win for Airbus overall. That is the current status quo. As such Airbus have no wish to rock the boat, they have nigh on. 60% share with a very healthy product mix with A321neo commanding a premium. So the longer this can be maintained the more massive profits will be generated. If I were in charge I would hold a watching brief. My only concern would be that Boeing seem to have got their R&D mojo back. Perhaps they can develop the NSA more quickly than Airbus can respond. Beside that Airbus could not be in a much stronger position.
Both B & A have launched aircraft before the engine technology is there – 320 neo is the latest example, A350/787 before that, 777 300ER even earlier. You either believe the MOM market is going to evolve from today’s marketplace or you don’t, and you front up with the billions or not, as you see it.
The 787 was a gamble on smaller WB aircraft on long P2P, and the A380 was the gamble on the opposing strategy of ever larger Hub to Hub. The next gamble is similar – a new, ultra-efficient small semi/total carbon WB versus a plus plus stretch of existing technology.
The really interesting question is can the cost of producing a robot produced carbon plane then drop to below the cost of aluminium planes for the next generation of NSA, and what is the best way to learn how to do this? Let the games begin!
I’ve read that Boeing is planning an oval fuselage with little cargo space in the belly. Does that mean the fuselage will be shaped like this ⭖?
It is also possible that the engines will not be typical “wing-hung” but rear mounted fuselage/wing incorporated that could explain the fuselage shape?
On something different, I didn’t realize that the 737MAX wing area is more than that of the A320/1’s.