Boeing moves EIS target for NMA to 2027: sources

Discussion
Business case yet to close

Boeing continues to press forward with the NMA studies. A formal NMA development unit has been name, along with program leadership.

“The New Mid-market Airplane is a product under study,” Boeing said in a statement to LNC. “Our team is evaluating it to see how we could meet the needs of our customers and do so with a sound business case. The decision has not been made to launch the program and we won’t speculate or comment further at this time.”

Key suppliers Boeing wants to take some risk-sharing positions have yet to be convinced the market demand is large enough for them. Wrapping the after-market services contract from Boeing Global Services is an important element.

But the key technology to developing the NMA is not the ovoid fuselage or bringing development back in-house, a response to the debacle out out-sourcing too much of the 787 program. As always, it comes down to the engines.

The NMA needs new engines in the 45,000 lb thrust class. And these are unlikely to be developed in time for a 2024-25 EIS.

Rolls-Royce and GE/CFM need to develop entirely new engines (albeit drawing on mature technology). Pratt & Whitney has to scale up its Geared Turbo Fan.

Boeing wants two engine choices for customers, but GE and PW parent United Technologies are on record questioning the size of the market for the NMA, let alone one with two engine choices.

Market demand doubts aside, Boeing is telling customers engines are unlikely to be ready for a 2024-25 EIS and 2027 is more likely, LNC is told.

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Supports 767-300ER restart

A 2027 EIS for the NMA lends support to the underlying thesis of restarting the 767-300ER passenger line on a limited basis.

American and United airlines are the most likely candidates for a restart, though there are other carriers with large fleets. Boeing asked the supply chain to study production rate increases for the 767 from the current 2.5/mo to as high as 4/mo, beginning in 2020 to a peak in 2021. After that, the rate gradually comes back down to 2/mo in 2025.

Currently, only the 767-300ERF and KC-46A are in production at a rate of 2.5/mo.

A two year delay in the NMA EIS means the aging fleet of 767s becomes more problematic. American is already seeing maintenance reliability issues on its fleet of 35. It sees a replacement need from 2020 and had expressed disappointment at the proposed 2024-25 EIS of the NMA. A shift to the right by two years exacerbates the problem.

United hasn’t publicly discussed its fleet reliability but has said publicly it’s interested in the possibility of new 767-300ERs.

Delta Air Lines told LNC it is not interested. There are some non-US airlines that also have significant 767 fleets—notably ANA and Japan Air Lines. Neither has enough 787s on order to be a one-for-one replacement.

737 replacement

Boeing’s plan has been to do the NMA first, followed by the 737 replacement, or NSA (New Small Airplane). This way, new airframe/wing technology incorporated into the NMA can migrate as well to the NSA.

New engines are needed for the NSA, but not as large as those for the NMA. It’s likely that NMA engine technology will also migrate into the NSA.

Thus, this is why the NSA EIS moves to the right as well.

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