Pontifications: Market Intelligence from NY

By Scott Hamilton

Oct. 22, 2018, © Leeham News: I was in New York City last week for a series of meetings. Here’s what “the street” is talking about. I make no judgment calls about whether the thoughts are on target or not.

 

Boeing NMA

As with many other events, Boeing’s prospective New Midmarket Airplane dominates conversation. Depending on who you talk to, the NMA program will either be launched, or it won’t be.

It will either have a composite fuselage or a metal fuselage.

There will be only a sole-source engine, most likely GE/CFM—or maybe not, because GE Corp is in such financial disarray it may either (1) not be able to fund the NMA engine or (2) GE Aviation will be sold off as GE Corp liquidates itself or (3) Safran and GE will divorce and Boeing will co-fund the engine development with Safran.

Rolls-Royce is in financial straits and Boeing “hates” Pratt & Whitney.

Or—despite the financial conditions of GE and Rolls, there’s plenty of credit line available to fund development of the NMA engine.

In other words, nobody knows anything definitive.

There is consensus that Boeing Global Services is now a crucial element of the NMA business case. LNC wrote about this Oct. 4.

There is also consensus in the disbelief in Boeing’s 20-year market forecast that the Middle of the Market sector is between 4,000 and 5,000 airplanes. The consensus is that it is closer to 2,000.

Some believe that Airbus’s oft-discussed A321LR and XLR will be “good enough” to encroach on the lower end of the demand to render the NMA business case (already dicey) infeasible.

Airbus things

There is universal consensus Airbus’ A330-800 is no answer to the upper end of the MOM sector vis-à-vis the NMA. But since the airplane costs Airbus virtually no incremental money to build (after all, it’s simply a shrink of the A330-900), don’t worry that this is nothing more than a niche airplane now.

People were talking that Airbus’ disarray in the executive ranks has paralyzed decision-making. While there remains doubt over whether the NMA will be built in the street buzz, there is general agreement that unless Airbus straightens out itself soon, Boeing will overtake Airbus for the next decade.

I happen to be among those who believe the NMA will be built and it will be part of a product strategy overhaul for Boeing’s line below the 787.

While I was in New York, news broke that financially strapped Etihad Airways is likely to cancel its large order for the A350. The carrier needs to shrink, the order was considered by some overkill in the first place and the 787 is already in the fleet. So, the A350s are expendable. Or so the talk goes.

Scope Clause

There is universal agreement that the pilot unions for the US legacy airlines will not grant relief in the 2019/20 contract negotiations of the Scope Clause restricting the size and number of airplane regional partners can fly on their behalf.

This continues to render the Embraer E175-E2 and Mitsubishi MRJ90 unusable by US regional partners.

There was one suggestion, at an MRJ event/presentation, that the unions might negotiation a special dispensation for these two aircraft, but nobody really believes this.

 

68 Comments on “Pontifications: Market Intelligence from NY

  1. Reading some articles/gossip it is suggested that Etihad will cancel the 40xA359 order but keep (most) of the 22xA35K order to replace 77W’s (19). Its further suggested that EK could pick-up the 359’s and cancel the 78J’s.

    In aircraft musical chairs Etihad could be operating a fleet of A320/1’s and 789/J’s and possibly A35K’s. The A380’s, 77W/X’s and possibly 359’s going to EK.

    • First 350K for Etihad is Q1 so can’t see them being cancelled. Penalty very high. 777X may be an issue though.

      • @Paul Martell:
        “First 350K for Etihad is Q1 so can’t see them being cancelled”
        By the above yard stick, it’ll be practically impossible for EY to cancel 78J order now given that the 1st 78J delivery for EY is only 5 days from now.

        “Penalty very high. 777X may be an issue though”
        By the same token, penalty for 77X cancellation won’t be much lower either thx partly to the list price of a 779 being higher than a 35K. Also, penalty for 35K cancellation can be converted into deposit for more 320/321Neo in addition to the 26 frames already ordered by EY when its current 320/321Ceo fleet size is actually 32.

    • @Anton:
      “Its further suggested that EK could pick-up the 359’s and cancel the 78J’s.”
      Whoever “suggested” this obviously hv not seen these recent photos taken @ Charleston nor aware of its scheduled delivery date to EY:
      http://nyc787.blogspot.com/

      That’s the usual problem with “some articles/gossip”. Too little facts combined with too much personal /subjective preference.

  2. On Etihad, the gossip is also about them cancelling or deferring 777-x… my take is, they will be checking their contracts, and try to negotiate the smallest bruises they can get away with. Both A and B will try to convince Etihad to hurt them less than the other – nothing new or surprising here.

    What I am watching is if Etihad could be a target for Airbus to try to squeeze the niche of the 777-8 (with the planned new WW of the A350-1000) in a similar way Boeing tries to do so with the A330-800. This of course would imply that Airbus is currently able to think strategically, something I am not too sure about.

    • Seems like the lesson of the last decade is don’t build a WB aircraft with “8” in the name.

      A388, B788, A338, B778, A358, B748… All problematic at best. It’s particularly ironic if you’re Chinese.

      • A318, 338, the list goes on. There is a reason the Chinese are calling their first mainliner C919 and not 818!!

  3. The A321XLR could be an important development for Airbus, hopefully they will not brew on it for too long.

  4. “While there remains doubt over whether the NMA will be built in the street buzz, there is general agreement that unless Airbus straightens out itself soon, Boeing will overtake Airbus for the next decade.”

    I wonder if there agreement about that among visitors of the next Toulouse aerospace conference. 😉 Or the Chinese. Airbus asks CAAC commitments for the local A320 and A330 assembly lines. While POTUS throws oil on fires.

    https://simpleflying.com/boeing-shares-plunge-as-airbus-tries-to-poach-major-chinese-airlines/

    On the A330-800. The succesfull A330-200 shrink proved successful as route opener for many airlines in the 2000-2015 period. Airbus is likely hoping on follow up in this role, but the enhanced 787-8 is available now also.

    • Thanks for the link, the 321 could gain popularity in China, for AB it must be a high priority for an improved/revised/new wing for models such as the 321XLR and/or A321+.

      Unfortunately the 338 has just gained to much weight, with an OEW of 132T its heavier than the 789 and only 3T less tan the 78J.

      • Are there any official documents according OEW of both aircraft types?

        According to Wikipedia the A330-200 has an OEW of 121 t while A330-800 has an OEW of 132 t? Extremely heavy engines? OEW for A330-200F is 109 t? Maybe lead seats?

        A330-900 weights 137 t and therefore just 8 t more than A330-300?

        Public documents by Boeing (airport planning …) omit the OEW for 787.

        • Hello MHalblaub,

          Regarding: “Are there any official documents according OEW of both aircraft types?”

          OEW includes the weight of all equipment installed on an aircraft, including optional equipment. Since the equipment installed varies greatly from airline to airline and even for different configurations for a given airline (domestic or international seating?, rafts and other ETOPS survival gear or not?, fancy inflight entertainment screens or not?, fancy galleys for hot meals or not?, auxiliary fuel tanks or not?), OEW will vary greatly among different aircraft of a given model. In the US, for major Part 121 airlines, the only official OEW for a particular serial number of a particular aircraft model is the current OEW recorded in the flight manual for that particular aircraft serial number, as determined by actual weighing of the aircraft within the last 36 months or after any more recent major modification work, adjusted as necessary for removal or addition of minor items of permanently installed equipment. See the FAR citation below. Critical performance calculations, such as engine out takeout performance, need to be based on a particular aircraft’s actual real world weight, not on an unrealistically low weight conjured up by the sales staff to exaggerate an aircraft’s capabilities in the real world. There is no such thing as an OEW for an aircraft model, there are only OEW’s for particular aircraft serial numbers.
          Most of an airplane flight manual is broadly applicable to a particular model with performance data presented as a function of present aircraft weight, temperature, altitude, winds, and other relevant variables; however, each individual transport category aircraft has its own individual (empty) weight and balance section based on its actual measured empty weight and balance data.

          “(b) No person may operate an airplane unless the current empty weight and center of gravity are calculated from the values established by actual weighing of the airplane within the preceding 36 calendar months.”

          https://www.law.cornell.edu/cfr/text/14/125.91

          The FAA does allow use of average weights for large fleets of similarly equipped aircraft, but the weight of individual aircraft must still be periodically checked and corrected for modifications.

          “The weight and balance system should include methods, such as a log, ledger, or other equivalent electronic means, by which the operator will maintain a complete, current, and continuous record of the weight and CG of each aircraft. Alterations and changes affecting either the weight and/or balance of the aircraft should be recorded in this log.”

          “b. Fleet Operating Empty Weights (FOEW). An operator may choose to use one weight for a fleet or group of aircraft if the weight and CG of each aircraft is within the limits stated above for establishment of OEW. When the cumulative changes to an aircraft weight and balance log exceed the weight or CG limits for the established fleet weight, the empty weight for that aircraft should be reestablished. This may be done by moving the aircraft to another group, or reestablishing new FOEWs.”

          https://www.faa.gov/regulations_policies/advisory_circulars/index.cfm/go/document.information/documentID/22749

        • Seems Wikipedia is the “only” easy source to find OEW’s, getting MEW’s are even more difficult.

          The T7000’s are ~1.5T heavier than the T700’s, so 3T accounted for. No clue where the rest of the extra weight comes from.

          • Hello Anton,

            Wikipedia may be an “easy source” for OEW’s, but it is not a correct source per the FAA’s definition of OEW. As I pointed out in a post above, as used by the FAA, OEW is the actual measured weight of a particular aircraft serial number as equipped, before any payload is added. Since optional equipment installed varies drastically from one serial number of a particular aircraft model to another, it is incorrect to talk about the OEW of a particular aircraft model, although the FAA does allow the use of fleet average OEW’s for identically equipped aircraft if their identical weights (within a tolerance) are verified by actual weighing of the aircraft.

            “(b) No person may operate an airplane unless the current empty weight and center of gravity are calculated from the values established by actual weighing of the airplane within the preceding 36 calendar months.”

            https://www.law.cornell.edu/cfr/text/14/125.91

            The 1.5 T residual difference in the OEW figures you mention could be due to differences the weight of an empty A330-200 and A330-800, or it could be due to the differences in installed equipment for the particular exact aircraft configuration for which the OEW’s being compared were valid if they had been verified by an actual weighing within the last 36 months. Differences in installed equipment could include the following.

            Domestic or international seating?
            Rafts and other ETOPS survival gear or not?
            Fancy inflight entertainment screens or not? Fancy galleys for hot meals or not?
            Auxiliary fuel tanks or not?

            If the source of Wikipedia’s so called OEW’s was marketing literature, then they probably include either none of the equipment I listed above, or only the very lightest possible versions, which would be a realistic real world OEW only for a bottom of the bucket ULCC.

          • For those of you who have access to paywall articles, Bjorn Fehrm’s aircraft comparison posts sometimes include calculated OEW predictions for the particular apples to apples configurations being used in the particular comparison; however, these OEW predictions would not be applicable to a differently equipped serial number of the same aircraft model.

          • @Anton:
            “No clue where the rest of the extra weight comes from.”
            Yup, their engine pylons+wingtips/wingspans are exactly the same and absolutely no need for any structural reinforcement/strengthening in the wingbox, landing gears, etc. to technically turn a 332 into a 338.

            Also, those crew rest modules+their associated supporting components(pipes, electrical lines, stairs+housing to/on the main deck, etc.) in the belly, used to be optional & excluded fm the nominal OEW specs on the 332, obviously weight the same as feathers after being added as standard equipment and show up on the 338 OEW….

        • Below is a less long winded version of the point I am trying to make about OEW’s.

          Subtracting the OEW for a particular serial number of aircraft model #1 from the OEW for a particular serial number of aircraft model #2, in order to obtain a generic difference in empty weights of aircraft models number one and two, only if the particular aircraft being compared had identical or nearly identical optional equipment. If you don’t know the exact equipment that was installed on the two aircraft being compared, the comparison is pretty much meaningless.

        • Hello Mr. MHalblaub,

          Regarding: “According to Wikipedia the A330-200 has an OEW of 121 t” … “OEW for A330-200F is 109 t? Maybe lead seats?”

          The 24,700 pound difference in the OEW’s that Wikipedia lists for for a passenger A330-200 and an A330-200F freighter, is about what I would expect. The difference is due not just to seats but also galleys, restrooms, water for galleys and restrooms, an emergency oxygen system, life vests, life rafts, heating and air conditioning ducts, additional soundproofing, entertainment systems, overhead bins, and additional cosmetic interior paneling. Supposing that 247 seats is a good ballpark figure for the total number of seats on a passenger A330-200, then a 24,700 pound OEW increase for all this stuff would be an increase of 1oo pounds per passenger, which does not seem surprising to me.

          I don’t have any recent cabin weight info in my collection of aviation books and mementos (aviation junk according to my wife). The best thing I could come up with for comparison, is the following cabin weight info from the weight and balance section a 1970’s Pan Am 707-320 Operation Manual.

          Basic Operating Weight for 707-320C Training and Test Flights (i.e. no passengers or cargo).
          Passenger: 147,600 pounds.
          Cargo: 135,200 pounds.
          Passenger BOW – Cargo BOW = 12,400 pounds.

          BOW reductions for passenger aircraft with stripped cabins.
          Passenger Service Equipment (1.5 meals): 3,000 pounds.
          Drinking Water: 770 pounds.
          Life rafts x 7: 896 pounds
          Seats (including belts, trays, life jackets): 5,635 pounds.
          Coatroom Structure, Forward: 100 pounds.
          Coatroom Structure, Aft: 100 pounds.
          Galley Structure, Forward: 390 pounds.
          Galley Structure, Forward: 397 pounds.
          Bar Unit, Forward: 160 pounds.
          Bar Unit, Aft: 114 pounds.
          Lounge (includes settees, table, bulkhead): 330 pounds.
          Total reduction for passenger cabin stripped of all items above: 11,892 pounds.

          The part of the manual that would show the seating configuration and total number of seats is missing; however, judging by the vintage American Airlines and TWA seat maps at the links below, the total number of seats would have probably been about 150.

          http://www.departedflights.com/TW70780.html

          https://frequentlyflying.boardingarea.com/vintage-airline-seat-map-american-airlines-boeing-707-323/

          Are modern interiors lighter or heavier per passenger than those of the 1970’s? Some interior items probably account for less weight per passenger than they did in the 1970’s, for instance, today’s coach seats are probably lighter than 1970’s coach seats, and bars and lounges are rare on today’s airliner’s. The weight per passenger for other interior items has probably increased since the 1970’s, today’s first class seats are probably heavier than those of the 1970’s, one to three tiny movie screens per cabin have been replaced by seat back video displays, and what were hat and purse racks in the 707 era are today grotesquely swelling into ever larger and larger above your head luggage and cargo bins.

  5. the bad news for Etihad is this:

    If Airbus is too nice to them and Boeing strict, it is likely that Etihad will cancel all their Airbus orders and take all ordered Boeing planes. And vice versa. Ergo, it makes sense for both Airbus and Boeing to insist on the payments according to the contract.

    • Was wondering if the Etihad’s getting its house in order is a requirement for a future deal with EK, so will EK basically decide for Etihad what to cancel and keep?

      • Abu Dhabi is the more financial compared to Dubai…so can’t see Dubai’s Emirates being in the driving seat…

  6. Boeing has no choice but to do the MNA (or take your pick). BA industrial base + skillset would be put in question otherwise long term. Lockmart has the fighter base to keep $$ in its industrial base. Not BA. Trainer win is too small $$ F18 is passe. BA can’t keep riding the 787 success (yes, it is one now finally) forever. Maintenance market is the clincher justification for a business case that’s iffy. But who know how that will turn out. 10-15y away. Too speculative. But you can dream.
    They need to build something new. AB has them by the balls on the single aisle.
    Witness Xiamen’s looking at the 321. Amazing. XLR+++++ (whatever) would kill BA.

    Laughable speculation wrt. GE Aviation. Is there. Will be there. Is doing (very) fine. And will work via CFM. No chance for a second engine. No volume.

    RR is in really bad $$ (but more importantly) engineering resource shape. Not much is working right now. They need to clean that up first. They are not stupid. They will get there. But otherwise frozen in place for a while. AB needs to single source GE more often.

    • Was wondering if the turmoil in the BA top management could actually play in their favor in the short term, their are no new engines on the immediate horizon.

      Maybe in 3 years or so AB could be looking at developing an aircraft between the NMA and 789/C929 when a new generation engine (50-60Klb?) could be available for EIS 2028-2030. Wing PIP’s for the 320/1 family could push it through to 2035 when a next generation engine could be available for an FSA/NSA.

      • I too think RR will recover, but its still an opinion vs fact.

        What I thought was an indicator of management blindness was the premature release of the program to predict blade wear.

        Followed immediate by the blade wear was worse than predicted.

        That is a strong indicator they are trying to force the program back on track rather than being prudent and accepting the ETOPs limitations (model have to be proven)

        While they are setting themselves up for the future heavy engines for the wide body with the Ultra, I don’t know they can pull off an NMA offering with any confidence .

        P&W certainly can (there w2as some serous buzz a few years back that they had an engineering offering for a wide body, almost certainly to Airbus.

        GE is going to be in the NMA mix, I would think a second offering with P&W in the lead there.

        Boeing has to be fully aware the GTF is the future and GE is behind the curve there to both P&W and RR.

        All NASA studies in good aircraft improvements are predicated on the GTF. Without it its incremental.

        I don’t believe for a second that CFM is not going to offer and Boeing is not going to risk the NMA on an all new relationship (granted GE mighty be an attractive buy – that really gets you vertically integrated!)

        • ‘Boeing has to be fully aware the GTF is the future and GE is behind the curve there to both P&W and RR. ‘ – Agree 100%, which means Boeing is going to have to do something creative with either RR or GE/Safran. I suspect the engine manufacturer will have to carry a larger share of the risk for the NMA or Boeing will have to shock everyone and go with Pratt

          • As neither RR nor GE has a engine release available with GTF, its either sole to P&W or a holding action with GE and another CFM stretched product (RR doesn’t even have a product in that area)

            Longer term either GE or RR could offer one, RR being closer.

            You have to wonder if GE has not gone “an engine too far” and stuck with a dated architecture and boxed themselves out like RR had.

            Not a hint of GE and GTF.

            It will be interesting.

        • Again, TW, please note that GE actually owns (and has for a while) the company that makes the GTF gearbox (Avios). The rest of the Pratt GTF engine has been a production/in service disaster, but not that component. I kinda think Boeing, and GE, probably know what they can/could/might be able to develop there, with the right licensing agreements (or if the existing over-broad licenses expire).

          • There is a world of difference between owning a gear mfg (even on that makes GTF gears) and application.

            You have to build hardware, know its characteristics. If it was a slam dunk, P&W would not have spent all the time and money they did getting it right.

            There will also be a firewall on the GTF inside Avior so others can’t steal ht design .

            P&W is not stupid enough to allow that.

            So you can keep in mind GE involvement all you want, it does not mean they can crank out a GTF in less than 10 years.

            If it was easy anyone could do it.

    • Boeing might decide that the 797 is the natural stepping stone for those who need more capacity/range than the A321.
      The question is how cheap they can make it, can they come down to 737-10/A321 prices for the lowest capacity version then it can be the logical step for those who want to trade in 737-800’s/737-8’s or the biggest 797 version with +300 seats in single class replacing 2ea 737-800’s in the morning rush traffic.
      The 797 Engine manufacturers might figure out that they can run the Engines first on a 300 seater then with dvindling EGT margin force the airline to swap those Engines onto the 220-240 seat short range version to run them out and collect PbH Money all the way to 20 000 cycles. By Paris Air Show we will know.

      • “can they come down to 737-10/A321 prices for the lowest capacity version”

        The idea that a 240 passengers (in dual class) NMA with 4500-5000 nm range (that’s the one most people talk about as the smaller version) in a production of maybe 10 a month could be produced for a price that would come close to the price of a 737-10 ([production around 60 a month) or A321 (production of 60-70 a month) seems quite unlikely to me.

        If Boeing manage to pull that off, it will mean Boeing’s B737 production is extremely inefficient. And the same would be true for the A320.

  7. Moonshot vision is fighting ghosts past…

    So in 2014 Jim McNerney announces a change in strategy to incremental development emulating Apple, “Our mind-set will be to avoid the moon shot,” . Interestingly the comment was panned by LNC.

    In 2016 Mike Sinnett, Boeing’s vice-president of product development begins to walk it back with “So when Jim says ‘moonshots’, how I think about that and how I instill that into what I do on a daily basis is, it’s not ‘don’t innovate’,” he adds, “but don’t innovate on the critical path of the programme and put the programme at risk.”

    In 2018 the talk is all about:
    * a new business model – sell it cheap and make it up on maintenance fees
    * double aisle where previously economics drove a single aisle
    * possibly a new shape – to get frontal and wetted area down but still be double aisled
    * the “oval”shape drives design to composite which are currently to expensive using current processes and materials which drives the design to a new as yet unspecified process for building with composites
    * new assembly processes – lots of automation

    But this vision is fighting the ghost of Jim and the 787 experience. Hence the alternative narrative of a classic tube done with LiAl.

    • Well lets be real, we know the Moonshot was not a Moonshot but a management debacle.

      Workers and Union not an issue though they have been accused of being the sole problem for Boeing.

      NMN is as much a moonshot as the 787 was. They are just relabeling it.

    • The composite saga isn’t helped that the full Barrell Boeing used for the 787 is a technology dead end as panels make more sense on ‘out of autoclave’ pathway, as well as structural reasons

      • Well the 787 is an extremely successful dead end!

        All I see is blown smoke on the panel system being structurally better. Its not.

        It may be a wash or it may bias to the barrel, but its not better.

        The two systems trade labor vs machinery. Panel and the assembled structure of the frame and panel takes more labor, easier to implement on a low tech basis.

        Barrels are easier to move around and you don’t have to hold them against a frame to assemble.

        I see no reason the barrel can’t work with out of autoclave, its nothing more than a lower cost curing system.

        • Hi Transworld, but all these plastics? My most memorable flying memories comes from flying B727-100’s in South America with big patches and huge pop-rivets, and the pilots smoking cigars at the bottom of the stairs before take-off, chickens in the overhead bins (guess they call it comfort pets now), good days.

          Although a big AB “fan-boy” the 787-8 falls into that category of aircraft for me, got character, similar to the 757-200.

        • There is no ‘frame’ to assemble the composite panels to. Both methods are semi monocoque so both require composite internal ring frames. And the build process has the 4 panels for each section made into a barrel for ‘moving around’, that process ends up with fewer barrel sections than Boeings method.
          The leading composite technology journals describe all the processes in detail, and yes its highly automated. Check them out, you could learn something from experts for a change.

  8. Boeing’s cash cows are 737, 787, and 777, obviously, for the next 10 years, with continued revenue escalation of services revenue quite obviously forecast. The NMA/NSA duo will be a very big deal, to replace the 737 in toto over the next 15 to 20 years.

    Some of you somehow can see conspiracies or POTUS hands in everything nowadays (note to Keesje: he won’t be in office no matter what if/when this thing is flying), but I just see a business product evolution plan to replace, and at first supplement, a product that is essentially sold out through 2025, with very limited further development possible. To me, the significant fact of the importance of the largest narrow body sales vs. the under 200 seat segment over the past 20 years is important to all of these analyses. The market isn’t likely to be content with 210 seat 737-next.

    I also don’t get why the freighter business is ignored in these discussions usually. The 767F commercial business seems to be on a death march; the NMA must logically accommodate that, with Boeing’s services goals in mind as well.

    • Hello texl 1649,

      Regarding: “The market isn’t likely to be content with 210 seat 737-next.”

      I agree, if we are talking about US legacy airline seating capacities, and I would have the same opinion about a 210 seat A321-next. I claim to know a little about US legacy airlines by virtue of being a frequent passenger on them, but I don’t claim to know enough about any other airline market segment to extend this opinion to any other type of airlines.

      Taking Delta as a specific example of a US legacy airline, the 737-900ER is for them a 180 seat aircraft, the A321-200 is a 192 seat aircraft, and they will be putting 197 seats on their A321-neo’s according to Wikipedia. These are all domestic First Class/Delta Comfort/Main Cabin seating configurations with no lie flat seats. No matter how many seats some bottom of the bucket LCC’s or ULCC’s may cram on these aircraft, for Delta a 737-10 or A321 with 2 rows of 6 abreast economy seating added, the longest stretches that seem to me to be plausible, would be something like a 197 + 12 = 209 seat aircraft.

      I think much of the discussion about the NMA market myopically focuses on international routes currently operated by 757’s or 767’s, and ignores what seems to me, as a frequent US legacy airline passenger, the pretty obvious fact that the US airlines are outgrowing 737’s and A321’s on their busiest domestic routes, and will need something like an NMA on these routes if traffic grows by much more than anther 10% on these routes in the future. Remember, for the US legacy airlines, many of the passengers on their hub to hub flights will be connecting at the destination hub, and the number of hub ramps per day is already maxed out at their major hubs. Adding more flights with the same size plane, at off peak times at which gates are available, would be an option for adding capacity on a shuttle route like San Francisco to Los Angeles with a high percentage of non-connecting point to point traffic, but if you are Delta trying to get connecting passengers from a spoke or another hub to Atlanta, the number of ramps per day at Atlanta is not easily changed, if not already maxed out, and there are few gates available for additional flights during hub ramps. Pretty much Delta’s only option for funneling more people through Atlanta at a given ramp time is to increase capacity per plane.

      Study question: Can you name a US legacy airline that has announced a fleet wide up-gauging plan?

      • All you armchair airline executives out there, below are Delta’s equipment choices for a typical day (Monday November 5), and a busy day (November 24, the Saturday after the US Thanksgiving Holiday) for Salt Lake City to Atlanta, a straight line distance of 1590 statute miles. According to Wikipedia Salt Lake City is Delta’s fifth largest hub, with 256 Delta departures per day in February 2017 (an average of 10.7 per hour over 24 hours) and Delta’s Atlanta Megahub had 1038 Delta departures per day in February 2017 (43.25 per hour averaged over 24 hours). Suppose that in ten years traffic increases on this route by 15%. What existing or proposed aircraft would you substitute into the present schedules to accommodate the increased number of passengers? How would your choices change if the director of scheduling told you that the scheduling computer has determined that the current flights times are the optimal times for feeding passengers into connecting flights at Atlanta, and you are thus not allowed to add flights at any other times, and that no additional gates are available at Atlanta these times to accommodate multiple aircraft arriving from SLC at the existing flight times?

        Delta SLC to ATL Typical Day Monday 11-5-18.
        Total Flights = 7, Total Available Seats = 1,516, Average Seats per Flight = 1516/7 = 216.6

        Lv 12:40 AM Ar 6:12 AM / A321 / 192 seats
        Lv 7:00 AM, Ar 12:41 PM / 757-200 Domestic/ 199 seats
        Lv 8:25 AM, Ar 2:12 PM / 757-200 Domestic/ 199 seats
        Lv 9:35 AM, Ar 3:15 PM / A330-300 / 293 seats / Lie flat seats priced as First Class instead of Delta one
        Lv 11:10 AM, Ar 4:49 PM / 737-900ER / 180 seats
        Lv 2:18 PM, Ar 8:03 PM/ 767-300 Domestic / 261 seats
        Lv 3:59 PM, No flight
        Lv 5:13 PM, Ar 10:49 PM / A321 / 192 seats / Mostly for passengers whose final destination is ATL?

        Delta SLC to ATL Busy Day: Saturday 11-24-18.
        Total Flights =8, Total Available Seats = 1,839, Average Seats per Flight = 1839/8 = 229.9

        Lv 12:40 AM, Ar 6:12 AM / A321 / 192 seats
        Lv 7:00 AM, Ar 12:43 PM / 767-300 Domestic/ 261 seats
        Lv 8:25 AM, Ar 2:12 PM / 757-200 Domestic/ 199 seats
        Lv 9:35 AM, Ar 3:15 PM / A330-300 / 293 seats / Lie flat seats priced as First Class instead of Delta one
        Lv 11:10 AM, Ar 4:49 PM / 737-900ER / 180 seats
        Lv 2:18 PM, Ar 8:03 PM/ 767-300 Domestic / 261 seats
        Lv 3:59 PM, Ar 9:33 PM / A321 / 192 seats

        Lv 5:13 PM, Ar 10:51 PM / 767-300 Domestic / 261 seats / Mostly for passengers whose final destination is ATL?

        • Regarding: “Lv 5:13 PM, Ar 10:51 PM / 767-300 Domestic / 261 seats / Mostly for passengers whose final destination is ATL?”

          Or connecting to an overnight international flight?

        • Note how on the busy day Delta is able to substitute 767-300’s for a 757-200 at 8:25 AM and an A321 at 5:13 PM without modifying departure times. In my experience, the 261 seat domestic 767-300’s board in about the same time as a 192 seat A321 or 199 seat 757-200. Would it be possible to do the same thing with a single aisle 260 seat aircraft, i.e., would the boarding time for such an aircraft be the same as for an A321 or 757-200? Note that 260 passengers is 30% greater than 200 passengers.

      • Texl1649:

        The 777 is no longer a cash cow as its winding down and the 777X is a cash sucker winding up.

        There are hints that the 777X and possibly the A350-1000 are too big as well.

        And the 777X is heavily dependent on the shaky ME 3 and the shaky ME.

        • I never understood the argument that the A350-100 wasn’t selling well because its too big? what about the 777X then? Bigger, heavier, and with less range.

          Im glad you pointed out that the 777X is basically for Emirates and the other me too ME2 that try to compete with Emirates.

          Etihad should cancel the 777X. The A350-900/1000 will be the perfect replacement for their 777’s since that would translate into modernization without increasing in capacity via bigger and heavier planes. Its a no-brainer, but global politics may favor Boeing.

      • As far as I can tell, its not a copy and it is impressive.

        Shades of the Spruce Goose!

        The engines are going to be its weak point.

          • The engine are license built from Russian design.

            How good they are as a step away from the original is unknown in the Indochinese variant .

  9. Lost as well in some of the “well, GE may be selling off engines, so they won’t bid on anything” drama analysis is that any long term sole source with Boeing would greatly increase that division’s short term valuation, without having to worry about teething issues/delays etc. in the 5-10 year window.

    As a further aside, is there a possibility Boeing themselves could become a (minority) stakeholder in some sort of GE spin off? Hmmm….

    • Ted:

      That has been one of my scenarios.

      It would solve a lot for Boeing! (back to a single engine offering)

      CFM has a role there and how that would or would not work is a good questions.

  10. As all the new airplane developments (A350, A320neo, A330neo) are now done, there are thousands of engineering people in Toulouse and elsewhere who are not there to be paid for doing nothing (in french slang “for combing the giraffe”). So I guess that in all cases, NMA or not NMA, round / oval or square section, Airbus is making its engineers work on something, call it A321XLR, A321 ++, A322 (copyright Keesje) or why not A360. There is still one little problem out of their full control : engines.

      • Could work A323=3+2+3=8, thus A328. For me A325 will be fitting for an A320+ (320.5). New generation with new wing, AB, please.

        • New wing ? Im glad you asked, as the ‘right span’ wing box in carbon fibre is already in production at Bombardier Northern Ireland factory. Add different spoilers/flaps and tweak the wing profile and its ready to go years ahead of a new design in a new factory. You could even add an all composite empennage from the A220 , again with some changes.

          • Thanks, could such a wing take an “A321” to a MTOW of 100-102T with 35Klb engines?

  11. Someone please explain to me how you’re going to sell an NMA “cheap” and rely on backend services for nearly all of your 15% profit margin? Message to king: “no clothes on, and no profit!” Sure, you’ll get some digital aircraft software revenue, and parts markup revenue, but not nearly enough! Remember, you’re supposedly selling mostly super reliable, 99.5% + dispatch reliable a/c.—if your engine manufacturers will cooperate! You’re probably going to have to push those “D” checks out towards fifteen years, from ten to twelve. I leaving aside the whole issue of fighting Delta Tech Ops, Lufthansa Technic, HEACO, etc. I think BA needs to stop, and do a major rethink on this. My approach would be spend three to four billion on a new version of the 787-8, and automate the hell out of its production. (Remember, incrementalism is you friend.)

      • Engine are a big part.

        You also have the APU, very extensive electrical on the 787 and major on the rest, bleed air systems, avionics, Lavs, galleys, Air Conditioning , hydraulics, brakes etc.

        There is huge money in the so called rest.

        Can Boeing extract a worthwhile revenue stream is a valid question.

        Is there money there and only in engine is a poor understanding of the aircraft world at best.

    • Perhaps they plan to fully emulate the printer OEM model and ensure that critical replacement parts for the aircraft can only be purchased from BA, at obscene markups…

  12. Keesje I thought Boeing overtook Airbus in production now for almost a decade (2012 -2018) and counting. They just won’t give up the lead. All those vaporware orders are vanishing since John Leahy left.

  13. Well lets be real, we know the Moonshot was not a Moonshot but a management debacle.

    Workers and Union not an issue though they have been accused of being the sole problem for Boeing

  14. Boeing should give medals to those that canned the A350-800 because if it was build instead of the 330-900 possibly at least half of 789 sales would have gone the A358 way?! The 339’s OEM is 137T, the mean for the 359 is ~140T, even with the big A359 wing the 358’s OEM most likely similar or less than the 339?

    Would Etihad or Turkish for example have gone 789 if there was an A358, also see Lufthansa is looking at the 789. It would have been very different out there for AB with an A358 the next decade on the wide body front.

    http://c.newsnow.co.uk/A/959609598?-303:3665

    http://c.newsnow.co.uk/A/959609598?-303:3665

    • Maybe because they created the GTF and sold it to Bombardier and others putting pressure on the 737 line; or maybe because of sibling rivalry since they were once so closely linked; or maybe Scott knows…

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