Leeham News and Analysis
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Leeham News and Analysis
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American wants to decide A350 fate within six months
Sept. 28, 2017, © Leeham Co., Grapevine (TX): American Airlines would like to decide within six months what it will do with its order for 22 Airbus A350-900s, a left-over deal from US Airways before the latter acquired the former.
Derek Kerr, EVP and CFO, told LNC on the sidelines of American’s investors/media day here in a Dallas suburb that the A350s were intended to replace US Airways’ A330s. The airline ordered 22 of the airplanes.
American, however, selected the Boeing 787-8/9 for its mid-size, long haul fleet, ordering 74 42. The new American deferred delivery of the A350s to 2020 and Kerr said a deadline is approaching to decide what to do with the order.
Options
A fleet of 22 aircraft for an airline the size of American, which operates about 1,550 airplanes (including those at American Eagle), doesn’t make sense, he said.
Kerr said the options are to increase the order, swap them for the A330neo, or swap them for more A321neos.
Airbus is pitching the A330-800 to American, which is a size it needs to replace its Boeing 767-300ERs. But the airplane is an orphan—just eight have been ordered—and American isn’t keen on this option so far.
Boeing is pitching a re-order of the 787-8 and the New Midrange Aircraft (NMA), which Kerr says that as presented is of great interest. The NMA is a 220-270 passenger, twin-aisle aircraft with a range of 4,500-5,000nm in the most recent concept Boeing has been showing the industry.
That American has been wrestling with the future of the A350 isn’t new; officials have been open about this. The deadline is new.
100-seat airplane
American is unambiguous about the prospect of a 100-seat aircraft and relaxing the Scope Clause, however: neither is going to happen.
CEO Doug Parker, responding to a question from LNC at the same event in open session, said there is no interest in a 100-seat aircraft offered by Bombardier in the form of the CS100 or by Embraer in the form of the E190/195 E1/E2.
AA is ridding itself of 20 E190-E1s, another legacy from US Airways. It operates a large fleet of Airbus A319ceos, both from US Airways and from an order from legacy American.
Parker said AA is trying to simplify its fleet, not add complexity that the 100-seat aircraft would add.
He also said there is no plan to ask pilots to relax the Scope Clause, which restricts the number, size and weight of airplanes that may be operated by American Eagle or
With all the A321’s and A319 AA has ordered, it might be in Airbuses best interest to allow AA to cancel the deal minus part of the deposits. The merger has made the A350’s an unwanted commodity as the 787 is a large fleet and still growing.
The last sentence looks incomplete.
Boeing has to be desperate to off them more 787-8!
Hopping they turn into -9?
Given the lack of desire to build any more B787-8s I think you are correct
Guess its to keep the 330-800 or cheaper 330-200’s out?
Two options for the A350:
1) Take delivery of the A350 when they are ready to replace the 777s (probably not until the early 2020s)
2) Convert the order to A330NEO and use that aircraft to replace the 767s
Agree that the cheapest way to replace the 767’s with new Aircraft types is the A330-900 unless Boeing lowballs the price on the 787-10. (other Airlines has already replaced the 767’s with A330ceo’s) The 777-200ER’s are not the latest and greatest anymore and the A350-900’s takes some more pax and flies 1000nmi further, the 787-10 is of similar size but has less range than the 777-200ER. The MoM will be the 757/767 super efficient replacement but you have to wait.
Seems like the A321neoLR could be a good niche product for AA. Enough commonality with the existing A321 fleet, but with range and performance for short TATL and MIA to South America.
Would really just depend on what Airbus wants in terms of conversion from the A350 order.
80 Of the 125 A319 are older than 15 years and inline for replacement AA indicate the not interested in 100 seaters, but a 130 seat CS300 could have been the perfect fit, but Mr Ross seems to have reduced this option.
As a “desperate” move AA could order A319NEO’s but suspect the MAX7 (which is now a shrink of the MAX8) will be the better longer long term plan.
If AA is uncertain about the MoM time frame it could soften an A359 order cancellation by being a launch customer for an A321+(322)?
This is really an interesting one.
The 777-200ER’s needs replacement (47) but AA’s drive is not to operate small fleets of a type. They have 20 B777-300ER’s that is in general <5 years old, that is a small fleet of 777's if the -200ER's are replaced.
The 9 A333's are around 16 years or older old while the 15 A332's mostly younger than 8 years.
The MoM will fit in well with their requirements, so I am not to sure about a big order for 321ULR's, maybe 25 or so to add to the current 100 A321NEO orders?
A333's are "done" in 5 years leaving 15 A332's, a small fleet. AA also indicated they not interested in the A338, they operate 788's.
There is a fair market for good second hand A332's, potentially LCC's. Can see them go.
Can also see AA consolidate around the 787's for aircraft15 years life left??
AA could decide to go for more 777-300ER’s, price should be (very) good and no big backlogs, the 787-10 could cover the middle ground between the 789 and 77W. Can see Boeing bending over backwards for this.
If AA decides to phase out the 77W’s for modernization of its fleet the 359 order could go to 40+, if not, it could be zero.
In the old days AA never operated a fleet less than 50 Aircraft of the same type. So Airbus might offer a batch of 50 A350-900’s with option on 50 extra A350-1000’s and take the fairly new 777-300ER’s as trade ins?
With the America first “thing” seemingly gaining momentum I wont be surprized if AA replace 777-200’s with a combination of 777-300ER’s and 787-9’s.
The 330’s could be phased out by 787-8/9’s, this will give 2 wide body types vs 4.
AA has a fleet of 125 A319’s, ~80 of those are older than 15 years. Its not impossible that a replacement order for those will balance the value of the A359 order.
Has there been any more rumor on an a321+/322 or a someway further enhanced a321lr? Seems like the time is now to get this out, and not miss any sales.
Airbus is waiting for the MoM/797 Engine before offering the A322.
Doesn’t sound to be very pro-active? First flight of the A320 was in 1987.
Wait for the Boeing to launch the 797? But could be very cunning if….,
……AB launches the 322 as an “NSA”, same but CFRP fuselage, a new wing, but same major systems and interior. Then we are talking!
Putting on an A350 noise-job could be a good a good facelift.
Most likely the A322 will have a new composite wingbox and wing. Depending on installed Engine size and MTOW a new set of landing gears and revised brakes. The A321neo+ will get “the goodies in due time”. I think they will switch to Al-Li fuselage and get the mass, strength and corrosion life benefit before doing a brand new narrowbody with a carbon fuselage. We will see.
Al-Li would be my choice, but seems everybody wants cooked up plastic lately.
If 47 777-200ER are to be replaced by 787-9’s would be a step backwards in term of capacity & payload range. In a growing market where 787-10 often can’t do the job.
https://1v7mh43xejam2hi9m11cptux-wpengine.netdna-ssl.com/wp-content/uploads/2014/03/aa777.gif
Doubling the A350 order might be simple/logical.
They will match United Airlines. The A350 allows the US carriers to take on the ME carriers by going point to point thereby bypassing the ME.
AA’s two longest flights are from Chicago and Dallas to Shanghai, about 6200Nm, currently using 787-8’s.
So it appears that they don’t require “monster” range aircraft. But on the other side, the 359 will easily cover such routes efficiently will full passenger loads, winds, etc.
Also, the A359 could open other destinations with direct flights that is not currently served. Shanghai/Beijing/Hong Kong/Seoul form the East coast and destinations such Kuala Lumpur from the West Coast.
That’s my point. US carriers have had to cut their cloth to their limitations. The A350 puts an end to many of their limitations, allowing them to take the fight to the ME carriers. Delta and United are sending a clear signal. Will American do the same!
Current oil prices are a big contributor to the current trend of down sizing of wide bodies and direct linking of city pairs.
If oil goes North of $70/barrel this could change requirements quickly to more Hub-Hub routes with higher capacity aircraft.
If an airline orders A359’s it has the option to convert/(add) to 350K’s (that has reported good range) in such an event, the 787-10 just won’t have the legs for many such routes.
Given the current climate, political pressure to buy Boeing is not beyond the realms of possibility.
If they can keep some (a lot) of the 767/757s and A330s going until 2025/26, they will wait for the NMA. If they can’t they may have to buy A321neoLRs as an interim measure.
I think the A350 is a separate issue. American must begin the process of replacing its 777.
They could go all in with the 787, thereby accepting a smaller airplane than they currently have.
They could buy the 787-10, but it does have range limitations which would represent a backward step.
I don’t see it. If American want to compete with their peers it got to be the A350
The MoM could be useful for the US Big 3 who are the main users of 757 and 767’s.
Lets assume the MoM gets certified in 2025 and production starts in 2026 (a bit optimistic?).
Whats the production rate going to be and who is going to stand in front of the queue to get one?
True. Without you or me knowing, Willie Walsh said the NMA could be late to market (see Flight Global). In other words the 767/757 replacements are due before the NMA arrives!
It’s good stuff for us commentators! Loving it as an airplane geek!
Below link to AA’s presentation yesterday. 82 Slides, with some you could read into things. Consolidation and stream lining seems the bottom line from a fleet perspective in the short term.
http://c.newsnow.co.uk/A/904284583?-303:3665:0
Think the 330’s are history. The 350, what this is all about, anything is possible.
Can’t rule out a 787/X and A359/35K fleet? On the negative for AB it could be 787X and 777-8’s over time?
The MoM could be part of a growth plan?
Boeing is probably essentially designing the 797 for a combination from EK, AA, and UA, with a goal to pick up from JAL/CX/LH/AF/BA if possible.
The MoM is always getting into most discussions, bit like a roller coaster.
With an A321+ (322) AB will have the 757-200 covered.
So is the MoM not actually the 767-300/ER?
Maybe, but as single isles are flying further it might be time for a 757-300 sized with no2 door boarding aircraft to succed. An A320 variant with a new wing carrying over 200 real Pax might not leave enough space for Boeing to make money out of a widebody MOM. I suspect that will be ABs approach anyway.
As for AAs A350s I don’t see AA wanting them, so AB has a lever here, maybe try to get the MOMkiller into AA?
Could be a definite option for AA and AB.
The 757-300 was 178.7 feet in length and was certified for up to 295 passengers. Length to diameter ratio (fuselage fineness) is optimally between 9 to 12, so because the glories of the US/imperial measuring system :), we can conclude that the minimum (slimmest) optimal fuselage diameter in inches is equal to a given airplane length in feet. A 178.7-inch fuselage is 23.2 inches wider than an A320, which means we have room to add a 20-inch aisle and 2-inch armrest to the new plane, matching the A320’s seat quality but in a 2-2-2 seat configuration.
With twin-aisle capability, the new plane wouldn’t even require door-#2 boarding, although it would be a no-brainer to allow that feature. The fuselage perimeter to seats abreast ratio for this plane is worse than the narrowbody/widebody competition, but the A380 and B747 have perimeter/seats abreast (& above/below) ratios that are far better than the other classes, yet still struggle to sell.
The extra fuselage width could alternatively be used to add additional inches of insulation/armor for a super-quiet cabin while maintaining the same seat capacity in a tighter 2-2-2 or the standard 3-3 configuration. This would also be helpful if more efficient but louder turboprop/propfan engines ever need to be accommodated.
Interesting article about MOM
https://www.flightglobal.com/news/articles/boeings-nma-could-be-a-bit-late-to-market-walsh-441667/
Maybe AA/DL might find all their competition are using A321-LRs before MOM becomes available? A322/323 won’t take forever to develop either if AB go ahead.
Anyway I still see these A350s ending as some sort of A320.
Thanks.
I can see the 321+ as a slight stretch to increase typical seating nearer to 200 if the current is 185. The stretch also to accommodate increase in amenities and access door in front of wing. So significant strengthening, the wing the key factor.
The real/effective range should be around 4000Nm (paper range of 4500-5000Nm).
AB will require something to replace the 330’s at some stage, this will give them a more focused “box” to work in if there is a 321+ in place.
The MoM’s wing, etc is always going to be a compromise between range and capacity.
The issue is the wing. The A321 has run out of wing.
The same applies to the 787. In other words Boeing could increase the MTOW of the 787, but it wouldn’t match the performance of the A350 because the wing is too small!
Returning to the A321, it isn’t very good. The problem is the 737 MAX 10 is even worse. So a couple of dinasours are fighting over the medium haul market.
A NMA is a game changer: 15% better than the A321 is easy, but 25% is possible if Boeing gets its act together!
The problem is Boeings attitude. The attack on the CS100/CS300 will be seen as price fixing by the world airlines. They may not buy Boeing simply to make the point!
25% better CASM than A321neo, with two aisles, with near-current engine technology? Surely you jest.
Depends on whether they are packed in like sardines.
The A321 is 160/180 seater in normal business/economy seating not 220. Then add the 3 aux fuel tanks to get the range up, the small wing, and all metal airframe.
Not much for an NMA to beat.
RR next generation engines are said to be more than 8% better in SFC. A good start. An airframe a little more heavier than the A321 but sized (fuselage and wing) to carry 50 for passengers.
I think the next generation carbon airplane can be well over 60% carbon. Meaning a more than 15% reduction for the airframe is now possible, the A350 was ~10-12%
One thing that still amaze me is that the all metal double bubble etc 763 weighs (OEW) about a 1/3 (40T) less than the 788 with approximately similar seating capacity.
So there is more in weight than just the fuselage.
Wonder if there are published seat mile cost comparison/s between the 767-300ER and 787-8 for similar sectors?
Most fuel burn improvements lately seems to come from the engines. I suspect that with 787’s and 350’s the wing play also a major role.
Below a comparison between the 763 and 788, interesting. If the 767 was still in production and you could add new generation engines things could have been very interesting.
https://seekingalpha.com/article/4008896-deep-dive-dreamliner-economics-fleet-renewal-part-1
@anton
LNC said that the carbon airframe gave 5% and the engine 15%. They then implied that the numbers were right for the 787 and A350. They are right for the 787 not the A350
On the A350, the Trent XWB is 12-13% better than the GE90 the other 10-12% comes from the airframe, for the A350-1000 is ~25% better than the 777-300ER
My crystal ball says better things are to come from carbon. In particular, manufacturers are finding ways of manufacturing small parts using carbon. The horizon suggests a carbon airframe can be built that is 15-20% better than its metal equivalent!
CFRP’s is the airliner “meta” of the future.
But I am not sure of for example; If you replace the current 321 fuselage (as is) with CFRP’s what will the gains be in fuel savings (weight) and what will the production cost differences be.
Weight savings with the wing and wing box mostly likely outweighs the advantage of strait fuselage weight savings.
A (much) better wing can give you say 10% fuel savings (aerodynamics and weight). Wonder if you will get 5% going from Al-Li to CFRP for the fuselage?
Maybe I am just old school, like metal and 4 engines.
Is Delta still reviewing their wide order? Seems the A359’s has gone the differal route.
But the 25 x A339’s, is that still in the balance?
If AA wants to phase out its relatively new A330-200’s fleet (15) I can see Delta as potential customer?
Can anyone tell me what the general “rule” is (%) of a cancellation fee for an aircraft order?
Was thinking about this order but also, if DL needs to can the CS1 order can’t they sue the Feds (and Boeing) for that fee?
Hello Anton,
Re: “if DL needs to can the CS1 order can’t they sue the Feds (and Boeing) for that fee?”
You cannot sue someone in the US, and I suspect any other country, because they filed a complaint that someone was breaking the law, and you then lost money because the regulatory agency or courts involved agreed with the complaint filers that a law was being broken.
If what you were suggesting was possible, then we would open newspapers to headlines such as “Drug addicts Sue Drug Enforcement Administration Informants for Money Lost When Their Drug Dealers Were Arrested Before Their Drugs Could Be Delivered”, or “Customers of Convicted Smugglers Sue US Customs over Income Lost after Breakup of Illegal Smuggling Ring”.
Thanks AP, some good examples.
Airbus IS putting together the A330-800 which probably means that they secretely know tvat ordered are coming .