April 26, 2018, © Leeham News: Two suppliers publicly confirmed what’s been whispered for months: Airbus and Boeing are checking with the supply chain about taking production rates of the A320 and 737 families to 70/mo.
Representatives of Crane Aerospace and Esterline confirmed the studies at the I-90 Aerospace Corridor conference today in Spokane (WA).
Airbus committed to 63/mo next year and Boeing is set to increase production to 57/mo next year.
Safran, a 50-50 partner in CFM, previously said it can’t go to 70/mo in response to market discussion that the Big Two OEMs are considering this.
CFM is the sole engine provider to the 737 and has about a 60% market share on the A320.
Neither Airbus nor Boeing has publicly confirmed they are considering 70/mo rates, saying only they are looking at “higher” rates than those announced.
Both OEMs have backlogs that extend into the early 2020 decade, with sporadic sales well into the second half of the decade.
Engine OEM are running the show these days, and they do it not always well-oiled (pun intended). Big question : if CFM can’t provide enough engines to Airbus, Boeing and Comac, how will they split their production to each of the starved airframer ?
By the way, Rolls-Royce and Airbus just announced an alliance to develop the Ultrafan engine family.
I won’t be surprised if on the other side Boeing goes to GE or CFM for the 797. Anyway, engines availability and efficiency will be predominant to decide between A & B, much more than any other consideration (CFRP fuselage or not for example).
IMJ, Airbus should reasonably expect CFM being able to manufacture the same number of LEAP-1A and LEAP-1B engines per month.
It’s interesting to note, therefore, that Safran (CFM) seems to indicate that they will have no problems delivering 100-120 LEAP-1B engines per month, but won’t be able to deliver more than some 50-70 LEAP 1A engines per month. Is CFM playing favourites?
CFM will be around 75 percent of NEO in the future. I don’t know how they could support 1000-1200 engine set deliveries a year in the near future. CFM hasn’t provided any hint at that either, to my knowledge.
So there is a real opportunity for P&W if they have capacity and buyers have confidence.
It may appear as if CFM is playing favourites. Apparently, it’s harder to ramp up production output of LEAP-1As to half that of the production output of LEAP-1Bs, than it is to increase the production of the latter engine to an unprecedented level of output.
Looking at the difference in engines I am confused as to the strategy that CFM will play.
Perhaps they favour Boeing simply due to the fact that there is no competition and by supporting the MAX they are guaranteed sales.
Or they focus on Airbus as this is where they stand to achieve conquest sales against the GTF.
Or does this decision base itself on longer term relationships and preference of OEM based on wider considerations of their business relationship ie has Airbus’s close links to RR weakened their bargaining power.
IMJ, it’s GE’s intimate relationship with Boeing that have led to the current close relationship between Airbus and RR on wide body engines.
Clearly, GE has favoured Boeing for a long time and it appears as if Safran (CFM) is feeling pressure to go along with what GE wants.
GE used to have a financial services arm and I think they used its clout to become a ‘risk sharer’ with Boeing. That would mean higher payments by Boeing, but now they are looking for higher returns so it could mean its partners ‘no more risk sharing’
Based on the current 58/42 market split between the A32Xneo and the 737MAX, a combined output of 140 single aisles per month would suggest that a realistic output would be 81 units per month for A32Xneo and 59 units per month for the 737MAX. Now, a further increase of production to, say, 90 A32Xneo units per month — and assuming a continued 58/42 market split — would mean that a realistic MAX output would be 65 units per month.
In short, it’s quite apparent that Boeing won’t be able to match very high A32Xneo production levels for a sustained period of time — unless, of course, Boeing starts to significantly outsell Airbus in the single aisle market.
I see it the other way, the unprecedented order backlogs for both OEMs are very impressive but the conversion into sales is almost equal. You could argue that Airbus has overstimulated demand and will suffer losses of future sales because they cannot offer any near dates for new orders.
Boeing have played a canny game of matching production on a model that is by general consensus marginally inferior. I sincerely hope for Airbus’s sake that they have managed to earn a premium on their sales that reflects their superiority.
The A321 is the joker in the pack, even with the MAX 10 presumably Airbus is earning a premium simply because it is larger and a further premium for its unique capability. This will hold true at least until the NMA breaks cover.
IMJ, Airbus is planning to match 737-8 output with A320neo output. The decisive factor in overall single aisle production market share, therefore, will be the difference in production output between the 737-9/-10 and the A321neo.
I would not necessarily agree that Airbus has overstimulated demand. In fact, the A32Xneo has been very successful in emerging markets — and that’s where most of the growth is occurring.
Airbus expects to deliver 50% A321 in the reasonably near future while the gravity of the 737 will sit with the 8MAX. How do you expect this to fit your prediction?
(assuming 9MAX, 10MAX @ .2 .. .3 of output)
Airbus increased NB deliveries while transitioning to the NEO and having “gliders” sitting around.
First, I would expect that Airbus would want to further increase production towards an output of 1000-plus units per year. Keep in mind that the total number of MAX orders (4474) only exceeds the number of A320 orders by some 300 units (4071); and 2nd, while we’ll se A320neo customers switching to A321neos, I see no reason why the A320neo wouldn’t be able to at least match the 737-8 in new order intakes — and if Airbus were to launch a slightly stretched A320neo+ (i.e. A320.5neo), trumping the 737-8 in seat capacity by a seat row, or so, the 737-8 would IMJ have a harder time matching the order intake of both the A32neo and an A320neo+.
It may appear as if quite a few analysts are taking for granted that Boeing will match Airbus in single aisle output. I don’t believe that’s an accurate assessment based on the actual MAX and neo order backlogs.
If you look at the ratio of orders/deliveries think BA wants to move to the position that they can sell slots whereas AB’s 32X backlog is growing.
AB could however counter by offering airlines with 320 orders conversions to 321’s (seats) and/or CS300’s (engines) to soften the 320 backlog?
What increases Boeing’s 737 final assembly capacity? I have notes of 63/mo from articles the last couple of years. Is the MAX quicker than NG? Will they start another line? Will suppliers do more work? I read that Spirit will enable 767 line speedup by installing more 767 internal fuselage hardware, like wiring.
@Bill: we know how Boeing would go to 70/mo, but for now we’re keeping this info to ourselves.
Considering what has been affecting Boeing supply chain for the past four months or so, and the very big change about to drop any month now, I have serious doubts that even with engine available they would be able to support that build rate before 2020 at a best case scenario.
Boeing’s final assembly plants may have some flexibility in manpower, space and efficiency gains, but that doesn’t mean their supply chain as a whole does presently or will any time soon.
One aspect of the 737 production is that they have 3 lines going. All crammed into Renton factory.
One initially was setup to prove out the MAX runs without interfering with current 737 output.
As I understand it, as the shift goes to enough MAX, the other two lines will make both then all MAX.
I don’t know if that is enough to get them to 70 but I believe it got them into the 60s possible.
Be interesting to see what Leeham comes up with.
As the MAX Leap and the NEO LEAP are two different engines, its not an issue of who gets what, they both come up short and will be working on it.
Increased output will be delayed.
Keep in mind Spirit has to get fuselages to Renton as well (whose sorry now they put it over there?)
Maybe they can stuff them in the 747 DL and or Antonov A-124.
P&W should do fine unless it has a Trent 1000 type meltdown. CFM issue may be to their benefit.
So far other than nit noids its been solid. Longer term is needed to see for sure.
When the Trent failed its fuel burn despite the highly touted 3 spool design, that was a strong clue that it had issues.
P&W is exceeding theirs.
What surprised me recently was that the 777 and 767 share the same section 41 or cockpit area. Both done by Spirit of course
“The 777 forward fuselage is built in five major assemblies at Spirit’s Wichita, Kan., facility. The assemblies are loaded onto rail cars and shipped to Boeing for final assembly.”
So any work to make more assembly in Wichita for the 767 would be for the 777 as well.
I knew the 757 and 767 shared this section as well.
Actually tons of space at Renton when you see the vast strip mall ( The Landing) over the road from the 737 plant. Even if Boeing only bought half it and the associated car parking they could do another FAL.
Then I see from aerial photos there is another large empty lot south of the mall ( Logan Ave and 8th St) which is adjacent to other Boeing facilities. google street view shows it empty back in 2011 too, so not sure what used to be there. Over to one side of that site is the Renton Kenworth truck plant, has has quite a bit of space.
So theres space around the Renton plant and Boeing has the money to buy any or even all of these sites.
Regarding: “Actually tons of space at Renton when you see the vast strip mall ( The Landing) over the road from the 737 plant. Even if Boeing only bought half it and the associated car parking they could do another FAL.”
The Landing Mall is located on land that Boeing sold after demolishing the original assembly buildings for the 700 series that used to be there. The current 737 plant was built around the beginning of the 737 program in the late 1960’s. I’m going to guess that Boeing is not going to be very interested in buying the land back and putting a factory back on it. See excerpts and links below. According to these articles, building 10-50, used for fuselage assembly, used to be where the Landing Mall now is.
The following excerpt is form the website at the link after the excerpt.
“In the 1990’s, jet fuselages were built in the 10-50 and 51. The 10-80 and 85 is where engineering was achieved”
“All the number 10 buildings are gone and replaced with shopping and living areas.”
The following excerpt is from is from the 12-29-04 Seattle Times article at the link after the excerpt.
“A Texas developer with the backing of a Chicago real-estate giant has bought a 46-acre chunk of Boeing land near downtown Renton with plans to transform an airplane-manufacturing site into a “lifestyle retail center.”
Harvest Partners of Dallas and Transwestern Commercial Services paid $37.8 million for the property, records show. The land spans Park Avenue North and includes the parking lot west of Fry’s Electronics and Boeing’s 10-50 Building that is being demolished. ”
“The property used to sit at the heart of Boeing’s 280-acre plant in Renton, where it makes 737s and recently rolled off the last of its 757 line. The company is consolidating its operations, initially freeing up 76 acres. ”
Many observers expect Boeing to eventually close the plant, although the company says it plans to continue building airplanes in Renton for the foreseeable future.”
This final excerpt is form the 9-21-10 Seattle Times article at the link after the excerpt.
“The Landing in Renton debuted with a Target store shortly before the U.S. economy fell into recession three years ago, and although it soon added a 14-screen movie theater and such big-box chains as PetSmart and Staples, many shops remain empty.
Now, things may be looking up for the 46-acre mixed-use development near Boeing’s 737 plant.”
“Off Interstate 405 on former Boeing property, The Landing has about 600,000 square feet of shopping, dining and entertainment space, plus 900 apartments.”
Reading through the information on the “Boeing Memories” website that I posted a link to above, I found out that the current 737 assembly facility (4-X buildings) is actually a mixture of buildings from different era’s, some date to World War II, others were built in the late 1960’s, and that many of the buildings torn down to make way for the Landing Mall were late 1950’s construction from the 707 ramp-up era.
In my opinion, the land that Boeing sold off from its Renton factory, that ended up as a shopping mall, would have been put to much better use as a passenger terminal for local west coast airline service.
If Boeing gets the 737’s from Witchita fully stuffed they could crank up the speed of their moving assembly lines as fewer operations are needed. Like Airbus installing lots of stuff on fuselage sections and wings before final assembly. That can be easier and quicker but you tie more capital unless suppliers get paid when the customer picks up their Aircrafts. Then the suppliers has to wait another 2-3 weeks to get paid.
The 737 fuselage is largely stuffed before being moved to the moving assembly lines.
Did you actually watch the video you linked to? The fuselage comes in structurally complete but none of the systems installed. First thing to go in at Renton is insulation.
Did you watch the video?
The fuselage is stuffed after arriving at the Final Assembly Line (FAL) in Renton. That takes three days. On the fourth day, the fuselage is moved onto the moving assembly line.
You realize these are done in the same building about 50 feet away from each other? And guess what – they don’t attach the wings and landing gear while it is moving either. The point is that the fuselages are not “stuffed” out side of the Final Assembly Building. I have been in the building, have you?