Pontificatons: From the sidelines at the AFJ Dublin conference


By Scott Hamilton

Jan. 28, 2019, © Leeham News: Launch by Boeing of the New Midmarket Aircraft (NMA) is pretty much a given, despite a still undecided business case, say people on the sidelines of the Airfinance Journal’s Dublin 2019 conference.

Here is a potpourri of information picked up at the conference, which is attended by about 2,000 people.

New Midmarket Aircraft
  • The true market demand is +/- 2,500, not 4,000-5,000 aircraft over the next 20 years, people almost universally agreed.
  • CFM will almost certainly be the sole source engine supplier.
  • Rolls-Royce offered the Ultra-Fan technology engine (aka Geared Turbo Fan) in its bid.
  • One US airline official said Boeing must decide this year whether to launch the program. It, and others, won’t wait much longer.
  • Airbus could have launched the A321XLR in November 2017. It didn’t because of indecision and distractions over the series of fraud, bribery and corruption investigations.
  • The distractions at Airbus will continue. More firings are expected this year.
  • The chaos from this will continue to disrupt Airbus sales this year and beyond. One prediction: It will be five years before Airbus finds its footing again.
  • Boeing is ready to kick Airbus’ butt this year.
  • And then there’s Brexit….
  • Bombardier CEO Alain Bellemare may be coy about the “strategic options” being considered over the CRJ program, but everyone who mentioned it openly is talking about a sale of the program.
  • Then they ask, Who would buy it?
  • Other than NMA, the sideline talked revolved around the Embraer joint venture.
  • Although Boeing says there is good synergy between the EJet and the 737-7, few see it.
  • Many don’t understand the motive behind the JV and what Boeing gets out of it. (NB: They are not looking at the big picture.)


92 Comments on “Pontificatons: From the sidelines at the AFJ Dublin conference

  1. “One US airline official said Boeing must decide this year whether to launch the [NMA] program. It, and others, won’t wait much longer.”

    Did the official say what will the US airline(s) will buy instead?

    • A321 variants. (AA, DL, Frontier, Alaska, Jetblue, Hawaiian, Spirit). I hear the voice of United. Boeing successfully prevented them buying A321s by lowballing 737-9’s and then -10’s. But they need something better..

      • Hello keesje,

        Regarding:” I hear the voice of United.”

        I hear the voice of Delta. They have the largest replacement need, and given typical Delta aircraft retirement ages, the 797 ramp up pretty much matches the time that replacements will be needed. Below is an excerpt from the 8-6-18 Airways interview with Delta CEO Ed Bastian at the link after the excerpt. Is Bastian’s stated requirement for 225 to 265 passengers doable with an A321 derivative without a new wing and an engine comparable in thrust to what would be needed for a 797? Keep in mind that in non-premium configurations Delta’s A321 ceo’s are equipped with 192 seats, and their A321 neo’s will be equipped with 197 seats, while their non-premium domestic 767-300’s are equipped with 261 seats. According to Delta.com, Delta’s premium configured 767-300ER’s have seating capacities of 208 to 226 passengers, with ranges of 6,621 to 6,640 miles, and range for the 261 seat 767-300’s is 3,515 miles. Range for their 192 seat A321 ceo’s is listed as 2,565 miles.


        “Q: With that behind you, you’ve gone on record saying that Delta would consider Boeing’s NMA as a launch customer. In your opinion, what would that plane’s perfect specifications be to Delta?

        A: We think about that plane it would replace, the 767s and 757s.

        We have 80 767s, about a hundred 757s. We want something in the 225 to 275-seat category.

        We want to take advantage of the fuel efficiency and the lighter structure, the modern day amenities for that aircraft and I think the range is going to be an important determinant, as well as making certain Boeing isn’t overbuilding the aircraft.

        And that’s why we want to be in there if given the opportunity to be an early, early customer.”


        Note that Mr. Bastian states that he wants to be “in there” if given the opportunity to be an “early, early” customer.

      • Heelo Keesje,

        Regarding: “Boeing successfully prevented them buying A321s by lowballing 737-9’s and then -10’s. But they need something better.”

        Apparently, United purchasing has not yet received the memo about abandoning the 737 MAX and ordering A321’s instead, because they just ordered 24 more 737 MAX.


        United purchasing did get the memo about ordering 318 seat 787-10’s to replace the 364 seat 777-200’s currently used along with 142 and 169 premium configured 757-200’s on its busiest domestic routes. The way I see it, United’s premium domestic service will in 5 years or so be operated by the 787-10’s and premium configured 737-10’s, with 797’s following in another 5 years; however, United who currently has 56 757-200’s (most will be replaced by already ordered 737-10’s) and 38 767’s (most will be replaced by already ordered 787’s) does not have the same large and unaddressed 757 and 767 replacement need that Delta does. The excerpt below is from the 10-2-18 Motley Fool post at the link after the excerpt.

        “Looking ahead, United Airlines’ interest in the Dreamliner could continue to grow as it discovers new ways to deploy the type profitably. Beginning in early 2019, United will use its first few 787-10s to add more seats — and particularly more premium seats — on its lucrative Newark-San Francisco and Newark-Los Angeles routes.

        Today, United operates about 13 daily roundtrips between Newark and San Francisco and 11 daily roundtrips between Newark and Los Angeles. For each of those two routes, 10 flights a day use United’s specially equipped 757-200 narrow-bodies. These are supplemented by the significantly larger 777-200 for the remaining flights.

        These routes carry lots of high-fare business traffic, due to United’s strong position in all three markets and the upgraded amenities offered on these routes. Meanwhile, all three airports are extremely crowded. That makes the 787-10 an ideal aircraft to use on these routes.”


    • What do the rumours suggest regarding the design of the B797 MoM’ster?

      Small scale TA — 7 wide @ 2-3-2?
      225 seats / 275 seats — US 2 class configuration

      225 seats = 48.5M long
      275 seats = 55M long.
      B767 as a similar set of data points.

      Engines — Talk was originally around the 45K lbs thrust.
      Then there was chat — possibly cargo related — about 52K lbs thrust.

      Points to an MTOW spectrum of 135T to 155T.
      Big wing might help lift this figure but it might limit range from some of the smaller / more awkward runways — NY / LG always seems to get a mention.

      OEW in this context would point to 65/70T for the shorter version.

      Consequently if this aircraft does not turn up where will the US Big Three go to get replacements?

  2. Thanks for the wrap up from the conference, Scott. I still don’t see why BA won’t use a derivative of the Genx from GE for the NMA. Isn’t it going to have 50,000 lbs thrust, or grow to this level and beyond, hauling up to 270 folks for 5,000 miles? And, by the way, isn’t it time to get cracking on a second generation Genx for both the 87 and 47-8F? Lastly, how likely and when will all 787 production move to Charleston? (Presumably freeing future NMA line space in Everett.)

    • The LEAP is a derivative of the GEnX so the 797 Engine most likely will be a GEnX with a new LP system optimized for 50k. It will be the quickest and least risk solution but if Airbus moves fast it can use the PWA and RR GTF 797 engines with even smaller fans for an A322 competitior unless PWA and CFMI tied Airbus to their Engines only, even if they say they cannot produce as fast as Airbus wants. Airbus wants competition and there is a market for an A322 the question is if it will be RR only agian as they could make them in Germany and truck them to Toulouse and Hamburg without entering the EU after Brexit.

  3. We are told Boeing will kick the butt of Airbus every year. Yes, Boeing won last year, not by much and at what price, especially with widebody sales.

    Airbus have an army of engineers twiddling their thumbs, or so we are told. They are not being laid off, instead Airbus are recruiting.

    Airbus have time to make the big decisions. Expect small decisions this year and next, but a lot of work will be done on a new wing and a lot of work will be done on cheaper, lighter and stronger carbon. No need for a knee-jerk reaction to NMA given Boeing’s recent history with research and development!

    Airbus may wait until the RR Ultrafan demonstrator runs in 2021 to make their next big decision. So in-between an A321XLR and a new version of the A350 for Qantas project sunrise. Both, I think, are happening anyway. Perhaps an A220-500, but that is quite a big decision, and will be far better with RR Ultrafan

    • I think you are wrong. Airbus has to make a clear decision on its response to the NMA. It had the opportunity to get its response in first but that chance appears to have receded. If they allow the NMA to rack up some big numbers before the commitment to some sort of A322 they will cede the middle space to Boeing. The critical advantages of the A322 are its speed of implementation and its relatively low cost of execution. Coming in second would be foolish if this means they lose those big US orders replacing B767s.

      Airbus need a dynamic leader to kickstart the whole organisation, they have let an overall marginal advantage in the sector slip dramatically.

      • You are right. I’ve agreed with your words in comments elsewhere. So I didn’t believe what I wrote either, except Boeings recent history with regard to R&D. Just find LNAs view of paralysis at Airbus funny.

        I agree Airbus can respond to NMA. They certainly have the engineering resource to do it. Moreover RR Ultrafan technology is more mature than many say.

        I would prefer an all new A321 with a 4-5 row stretch and a 2-3 row shrink; 170-240 seat market. But a rewing of the A321 with RR Ultrafan would more than match Boeing’s risk averse NMA.
        The A220-200/300/500 will take over the 110-160 seat market. R&D for the A322 and A220? A lot less than $10billion.

        I have said elsewhere that Boeing must throw down the gauntlet. They won’t. Boeing are making it very easy for Airbus. In other words, Airbus are on course to kick the butt of Boeing.

        But you are right!

        • @Philip: If you read the post carefully, Airbus’ paralysis was the view of the people of the conference, not “LNA’s view.”

          • Scott, was the consensus based on Boeing having the better package (be it product or finance or whatever) than Airbus for 2019 campaigns or was it based on Airbus needing to rebuild its sales structures and processes, post Enders’ stop on the use of commercial agents earlier in the corruption scandal (plus the distraction that must be affecting Airbus’ C level while Enders and associates are still there and the subject of questions)?

          • @Woody: It was based on all the distractions at Airbus, the disruptions in the sales department inhibiting orders, more top personnel changes to come, predicted major turnover in sales yet to come, etc. Nobody believes the Airbus product line has fundamental flaws.

            This disruption at Airbus is analogous to the turmoil and high turnover at Boeing during the 787/747-8 development years, churning through BCA presidents, program EVPs/SVPs, killing a replacement for the 737 and 777 and winding up instead with derivatives. It took Boeing years to stabilize. The feeling is it may take Airbus as much as five years to stabilize. (I’m not that pessimistic.)

          • Philip: I don’t get how you think the Ultra is more advanced than we think it is.

            Right now its a concept, and it changed from Advanced being the next thing to Ultra using the Advance core.

            While it was a good and logical move, that means a lot of work on each had to be changed to adjust to the other units setup.

            You can add in clearly RR has to have changed their modeling recently as they missed the blade crack issues until they occurred. That is not good. It can be adjusted and will be, but that too is a time setback that then you have to reprove your new models.

            They did that with predictions on the current failures then found that was wrong. Not a good sign.

            Its still in prototype testbed status and it can’t be anywhere near where you seem to think it is.

          • Transworld: re Ultrafan

            We will know in 2021 for a full Ultrafan demonstrator engine will ground run in 2021 and go airborne in 2022. As of today all components are running. So an OPR of greater than 70:1 has been achieved

            RR have skipped a generation. If the technology is mature, why not

          • Thanks Scott.

            Even if they had the ability to control everything I reckon it would take Airbus until mid 2022 to get back close to operating the way they want to, given the need for roles to be learned, appointments to filter and relationships to bed. But the big uncontrollable, the corruption probes, must add on significant time to this. Seems to be causing paralysis at multiple points within the organisation and developing, to at least some extent, French/German tribal antagonisms, the sort of problem Boeing couldn’t face. Add on the continuing government involvement and how they may seek to mitigate any impairment to intelligence they formerly had access to. A mess. Fingers crossed Faury plus whoever replaces Ranque in 2020 can restore calm quickly.

        • A CFRP rewing of the A321 and new gear, maybe a new wing box will cost how much? Yes, cheaper than the NMA, but what are estimates for those programs? Looking at the time, complexity, and cost for something seemingly so simple as the re-engine of the A330, A320, and 737, an A321 with a CFRP wing and an ultrafan engine could easily have a cost of 10 billion and a development time from launch to EIS of 7 years.

          There is the alternate choice of an all new Airbus aircraft. Since the business case for the A330neo or 777x has not been conclusively proved, the wisdom of pouring money into old frames is by no means a given.

          • Obviously the cockpit of the A220 and its flight controls are worth having in a next generation single-aisles. Besides that it will certainly be a full cfrp wing. Regarding the fuselage I’m really not sure.

            The billion dollar question is the propulsion. With the order backog as large as it is, they could first develop hybrid drive systems. Batteries are getting better by the day. There could also be a chance for Methane as fuel. But this would change the entire layout of the plane. Could be both Airbus and Boeing are eying such “futuristic” designs seriously.

          • “A CFRP rewing of the A321 and new gear, maybe a new wing box will cost how much? ”

            Very very little . The Carbon fibre wing of the A220 is the same span as the A320 series. They even have the whole industrial process with its factory in Northern Ireland. You could even throw in the whole carbon fibre empennage as well, maybe its light enough to allow a stretched version to use existing engines , which would please airlines even more.

          • @Gundolf
            At the distances the A321 and (suggested) A322 would have to fly, and EIS within 6 years, we’re still far from hybrid propulsion being an option.

            If Airbus would decide to go for a wider CFRP wing it would only need a slight increase of power (or even equal power) to the current GTF. If posts about P&W and the GTF on various sites are to be believed the GTF has room to grow.

      • Airbus seems to wait for the 797 and then ask the rest of the Airlines that have not placed 797 orders by Paris Air Show what they want.
        It might be that Airbus and Boeing design 2 different Aircrafts each optimized for its markets like a 757-200 replacement A322 and a 767-300ER replacement 797-7.
        Udvar Hazy helps both manufacturers and he might guide them to these types of Aircraft designs.
        Airbus is developing the parts down in the organisation but they might only be able to react and since they both need new Engines they have to wait for Boeing to make its decisions and see who is the Engine winner and losers on the 797.

      • AB has a number of potential A32X platform / architecture candidates if it has to meet the challenge of the B797 MoM’ster …

        It has by all accounts the part bin special that is the A321 XLR which is improving spatial efficiency regarding fuel storage and MTOW — big number heading out to 101T.

        Then there is the unfinished “Plus” workstream that should take the platform out to 110T MTOW and 50M fuselage lenth.

        Engines would be growth versions of the current pair with another 10% thrust to match the MTOW growth.

        If the fuselage and engines look backwards to what is already flying then the wing / wingbox + saddle / LG x 2 should be one generation further forward.

        4 wheel MLG / CF wingbox and a new wing family will add a lot of range and efficiency to the A32X family.

        Well balanced design based on $5Bill investment would take the range beyond 5K NM nominal and offer up to 240 standard seats at 32” pitch which would match the shorter version of the B797.

        And if that is not enough AB can use the B797 engines to take the A32X platform out to 130T and 155T MTOW with a “Super Duper Sixty” style aircraft that will overwhelm the MoM’ster product space as currently understood.

    • not sure I understand your obsession with the RR Ultracopy GTF…

      RR hasn’t built a truly fuel burn competitive engine in 10-15 years, and pretty much everything in that same time frame has had Turbines 101 level reliability issues, why are you so sure that the Ultracopy is the answer?

      Financially, the company is on the brink and they don’t have the materials technology of GE or the 20 year head start on GTFs that PW has…

      • Apart from the Trent XWB, the most fuel efficient wide body engine in production today and still will be when GE introduce the GE9X. Then there was the Trent 700 and now the Trent 7000… etc. etc.

        • The point is that the GP7000 beat out RR on fuel efficiency despite the vaunted 3 spool design.

          Now they have flipped the logic that a 3 spool is better short range not long range previously, hmmmm.

          The concept was that while costlier, the 3 spool being more efficient long range more than paid for itself in that cost (much more expensive to overhaul)

          Then GENx beat the 1000 on fuel efficiency and they are still trying to catch up with all new engine (GE just did a PIP on the GenX )

          There are no other engine to compare as the rest are single source.

          • So you keep telling me.

            Just GE smoke and mirrors just like the 777X is Boeing/GE smoke and mirrors. The performance of the A350 is proven, A350-900 is 30% better than the 777-200ER and the A350-1000 is 25% better than the 777-300ER. The Trent XWB is about half of it, the airframe the rest. That’s why Tim Clarke won’t give it a rest with regard to an A380neo. He knows RR can do it.

            To @Anton, improvements to the A350 for Qantas project sunrise will be available as general improvements, just like the increases to MTOW, the additional fuel volume and the improved aerodynamics that are now available. For example expect a 3 tonne reduction in empty weight. The improvements will put clear blue sky between the A350 and the777X

          • A poor implementation of a superior architecture will lose out to a good implementation of a less capable architecture.

            RR got fat and happy and believed their own hype.
            GE sweated every asset they owned to keep their big engine architecture competitive with the 3 spool glide path.

            RR having imbibed their own waste water could not deliver on the 3 spool efficiency glide path and so lost out to a much less capable architecture.

            GE and friends are working the same angle with the B737 engine family that they are involved with — they don’t have the wing height to optimise the big fan so they sweat the internals to compensate.

            Big auto perspective — 911 development plan.
            It stays competitive because they work harder.
            RR needs a boot up the erse.

          • Transworld and others:

            No point in trying to convince me RR engines have serious durability issues. I know what an eigenmode is and what sulfur corrosion is, the two issues at the root of the Trent 1000 problems. It’s called an education, starting with a degree in aeronautical engineering.

            The issues are isolated to the Trent 1000 and don’t even translate to the Trent 1000 TEN. AOGs happened because they didn’t have the manufacturing capacity to replace blades and didn’t have the maintenance capacity to fit the blades.

            The Trent XWB is another story. 3 million hours and 1 in-flight shutdown. Unplanned engine removals are in low single digits. No jet engine as ever matched the current numbers for the Trent XWB. RR have a high inventory of Trent XWBs – so the lessons appear to have been learnt – but they remain in their crates.

            With regard to Boeing/GE/PW superior performance based on superior technology. Not fact, fiction to the point of Orwellian behaviour.

            We now know the 787 is no better than the A330neo. Let’s see what the 777X does. Boeing say the 777-9 is 12% better than the A350-1000, my numbers say 8-10% less. Even more when Airbus address Qantas project sunrise. And then a NEO.

            The 737 series doesn’t match the A220/320 series. Airbus will mount Utrafan on it’s narrowbodies moving their performance further apart.

            Boeing need to do some thinking, a lot of thinking! Talking up your products is one thing, but in the end customers don’t like to be told porky-pies.

            So no, won’t accept the Boeing/GE/PW marketing machine as very often seen in comments to LNA’s blogs (Scott, I choose my words carefully). So I will provide balance.

            I’ll end by saying that some could at least look up the word eigenmode. RR could design engines for another 10,000 years without having to deal with it again. Very, very unlucky and impossible to design against!

      • RR has been a bit uneven. the T700 is a major success, the T500 not so as the whole A340-600 program smelled Quick and Dirty to make LH happy with a 4 Engine big jet, the T800 got superseeded with single Engine choice on the 777-300ER, the T900 has problems beating the GP7000 performance but will trot along until a A380neo comes, the T1000 B/C has its problems and the T1000-TEN/T7000 needs a Little maturing as for a new normal Engine, the T-XWB has been quite sucessful.

    • AB is spending a lot of time and effort on an “350-1000XLR” for project sunrise. Qantas requirements can not be for so many of that aircraft, still scratching my head on AB’s priorities sometimes.

      Firstly, the chances are 90+% Qantas will order an 777-8 “LR” due to having 787’s in their fleet. Qantas also more than likely to order 777-9’s to replace 747’s and 380’s eventually, last order for 8 A380’s effectively cancelled which will make the 778LR an no-brainer for them.

      Qantas almost certain to order 797’s which between it and the 787’s will rule out any 330NEO hopes or AB.

      Also Qatar and EK have 778’s on order, Boeing could offer an 778-“LR” as part of those orders to them and therefore afford to spend more money on developing such a very long range aircraft.

      Hopefully I am wrong, but maybe all AB will be see is being “rewarded” for their efforts by Qantas to at least order 321XLR’s (mostly conversions form current 321 orders) for Jetstar, or some 220-300’s to replace 717’s (Qantas Link).

      • The Qantas sunrise A350 might be the A350neo with 7-15% better fuel consumption than the A350-900 ULR that has its limitations. so after around 800-1000 A350’s delivered the next generation might come around 2024-2027.

        • Apologies if I have been over critical of AB on project sunrise.

          There are many direct and indirect spin-offs of such a study, one could be the platform for an A350-1000Plus (stretch) with 400 seats (vs current 360 seats) and range of 7000-7500Nm(vs current 8000-8500Nm) that could more directly compete with the 777-9.

          If if an 350-1000XLR turns out to have a range of “only” ~9000Nm there could be airlines that have ordered 359’s and/or 35K’s that could interested in such an aircraft, etc.

    • I do find the suggestion of paralysis at Airbus funny. Too much Guinness, for me. Airbus spent $15billion on the A380 and won’t get it back. They have also spent $15billion on the A350 but will get it back together with a tidy profit likely to be greater than $15billion.

      So $30billion to crack composites. For me, time to cash in, not get cold feet. The fact is Airbus don’t think much of Boeing’s NMA. That’s why they are in no rush to respond. So if Airbus do pull the trigger, it will be a smaller airplane with 757/767 seating capacity

      Boeing on the other hand have spent $3.5billion putting a boom under a 767. They are having real trouble with R&D. All the signs are that the NMA will be risk averse, too big and too inflexible.

      I will repeat what I said a very long time ago. The A321 is a compromised airplane. The reason is the wing is too small. But, it is still selling like hot cakes. An airplane 25-30% better is doable.

    • If the RR Ultra-Fan is a geared-fan, is it that much better than UTC’s GTF? TIA

      • When you add the other bits, yes. The othe bits: A very thin carbonfan (very thin is important), a compressor greater than 70:1, a very lean burn combustor, shroudless two stage HPT with TET in the region of a 2200 K and a CMC LPT. At least 10% better than PW GTF.

        With regard to hot end technology, RR began to introduce it’s new hot end technology on the Trent XWB. This comes to the CR929. RR bid to power the CR929. It won’t have the technology on the grounds of national security.

      • RR Ultrafan — the spec sheet looks world class.

        But can RR deliver all of this to put an engine into service in 2029?

        Plus what size of engine will it be?

        Heavy Duty TA @ 90K lbs thrust?

        Medium Duty TA @ 60K lbs thrust?
        Might be an opening if AB want to launch a A300 Mk2.5 @ 180T MTOW — B787 done right would be my thoughts.

        Light Duty TA @ 45/50K lbs thrust.
        MoM’ster spec.

        I do appreciate the power of parametric design / variation all geometry but that range of potential outputs would stretch that design process to breaking point.

        • What size of demonstrator engine is of extreme interest. Is it 50K for the NMA 40K for an A321 stretch with more fuel. I don’t believe it will be 70K, the maximum for the gear box they are currently testing.

          Airbus are developing the nacelle, pylon and engine/cockpit interface. So I assume they had a say in the size of the demonstrator, which will ground run in 2021 and go into flight test in 2022.

          Service entry could be as early as 2025 to meet a possible Airbus rewing of the A321

          • For a 40k engine doing many more cycles than a 50k engine the core engine is almost the same. The LP system will differ a bit.

    • Philip
      “We are told Boeing will kick the butt of Airbus every year. Yes, Boeing won last year, not by much and at what price, especially with widebody sales.”
      A) I would like to know where you hear that?
      B) Yes Boeing won last year and it was by a butt kicking margin, $66.2 billion vs $41 billion in sales. (Source: AeroAnalysis International)


      Going by number of planes sold is very deceptive especially considering Airbus’ narrow body advantage and adding all those low margin 220 orders. It looks nice for press releases but it is not a reliable indicator of profit.
      Peace. 🙂


      • Yes, peace.

        Many commentators have said Boeing are being very aggressive with price, especially in the widebody market. The Hawaii deal for the 787-9 and the United deal for the 777-300ER, to name but two.

        The 777X is late so Boeing need to fill 777 slots by selling 777s cheaply. They did try and failed to kill off the A330neo by selling the 787 cheaply.

        The brochure numbers are not right. The big question is did Boeing make any money on widebody sales?

        • Hello Phillip,

          Regarding: “The big question is did Boeing make any money on widebody sales?”

          I don’t think that anyone outside of Boeing knows profitability breakdowns by aircraft model; however, overall company profitability as reported in audited quarterly and annual reports are a matter of public record. The excerpts below are from the 11-5-18 Motley Fool post at the link after the excerpts.

          “There’s plenty of room for debate about which aerospace giant has the better model lineup and the best future sales prospects. In recent years, Airbus has tended to collect more aircraft orders (although Boeing is poised to win the 2018 order race). As a result, Airbus has a larger order backlog than its American rival.

          However, Boeing leads Airbus by a wide margin in terms of both profitability and cash flow. The two companies’ recently released Q3 earnings reports show that Airbus is still struggling to turn strong order activity into big profits.”

          “Last quarter, Boeing faced plenty of challenges, as engine production delays disrupted 737 MAX deliveries. As a result, core operating income slipped to $1.9 billion from $2.3 billion a year earlier. Nevertheless, free cash flow surged 37% to $4.1 billion last quarter, and core operating income is still up 8% on a year-to-date basis.”

          “Airbus’ profitability has improved significantly in 2018 relative to 2017, but it still lags Boeing by a wide margin. For the first nine months of the year, Airbus’ adjusted operating profit more than doubled to 2.7 billion euros ($3.1 billion) — less than half of the $6.8 billion core operating profit that Boeing achieved.

          The difference in performance is even more stark when looking at free cash flow. Year to date, Airbus’ free cash flow is steeply negative. For the full year, it expects free cash flow (excluding merger and acquisition activity and customer financing) of less than 2.95 billion euros ($3.36 billion), compared to $13 billion or more for Boeing.”


          • Your excluding Boeing liabilities. They are selling off the family silver.

            But we come to the US tax payer. We know it’s there. Lots and lots of subsidies coming under all sorts of names. It works for a while but if you don’t produce the goods then you are done.

            UK & EU accounting is simple, as identified by the RR issue. It’s $1.6billion perhaps up to $2billion then RR are done. But they are done. There is NO deferred accounting. For RR it’s all over by the end of this year bar the shouting. Debt paid.

            This deferred accounting is too complex for us Brits.

            Boeing have a $50billion bill for the 787. That bill is being paid by the US tax payer. We know.

  4. “Boeing will kick the butt of Airbus” is about sales – if they use the NMA and the rate increase of the 787 to kill the A330neo (indications are that they want to do so, as Scott has started to mention around the time Hawaiian switched) – with the NMA killing part of the A330-200 replacement market that Airbus is counting on, Boeing will be able to dominate that segment for a long time. Keep in mind that A35K, 77W and 777-X are all not selling well right now, chances are that Airbus might only have one wide body, the A350-900 left to sell in volumes, as a lot of 77W are still too young for replacement.

    • Perhaps Airbus will need its own NMA, a slightly bigger and more capable version than the Boeing variety to place it under the B787 but introducing technology missing on the A330. If they get it right they could do to the NMA what the A330 did to the B767.

      • That’s what I hope is AB’s thinking, it will be 3-5 years behind the NMA when it comes to EIS but engines will be a step change for what is used on the 787/330NEO’s and possibly 797.

        But then they will have to make the hypothetical A321XLR and 321+(A322) good for many years and pull a bunny out of the hat with the wing and rattle the MAX8 cage with an A320Plus (320.5=A325?).

      • In theory the A330 cross section is pretty good but compared to the 797 very Heavy. Still lots of customers want the LD3 capability and 2-4-2 seating. Can Airbus design a carbon A330 fuselage built by robots quickly and cheaply after Boeing gone thru the same process on the 797?
        Then the issue is suitable Engines if the aircraft is used both for morning rush traffic, trans Continental and trans Atlantic flying. The GEnX/T1000 would be worn out pretty quick and the 797 Engine might be too weak to take the cycling at this highter thrusts unless Airbus reduce the MTOW to be the same area as the 797-7 and be beaten on range again (slimmer 767 vs. fatter A310). The logic points to an +4000nm 240pax A322 with EU funded carbon wing and wingbox with derivative 797 Engines.

  5. “Many don’t understand the motive behind the JV and what Boeing gets out of it. (NB: They are not looking at the big picture.)”

    Scott, are you referring to Boeing or those many who don’t understand the Motive behind the JV?

    • Here’s the answer: Dominic Gates’ Seattle Times article, dated 7/5/18, “Boeing’s Embraer Deal Is A Key Strategic Play For The Future”. Summary: São Paulo will be a third engineering and manufacturing site for BA, after Seattle and Charleston. And, engineering costs are ONE THIRD US costs! (Hat tip to Bjorn, quoted in article on lower engineering costs on future Embraer/BA aircraft.)

    • Motive 1: 5000 non-unionized, relatively cheap, young engineers to design the next generation of Boeing jets.

      Motive 2: cheap, experienced, non-unionized manufacturing labor

      Motive 3: revenue offshoring

      Motive 4: Leverage against the US labor force

      any questions?

      • Motive 3: Revenue offshoring. This could backfire. If you are referring to offshoring like the B787 that was step up by Stonecipher. The plane ended up costing 4X as much to build.

    • Is it known what Boeing pays for those 80% of Embraer ( civil side) ? ( Airbus got 50% CSeries for a dime)

  6. Could you please expand on how or where Boeing is going to kick Airbus’ butt this year?

    Single aisle? Widebody? Both? Sales? Deliveries?

    Just curious as Boeing has already been dominating widebody in sales and deliveries for years and I don’t see how Boeing could turn around the single aisle picture so drastically in one year. Or have I missed something on that front?

    As for the Bombardier RJ, is there anything about that programme that would or could interest Airbus in the least bit?

    • One would think if BA is hooked up to EMB, AB would be thinking Yes. Especially in relation to scope clause and airline route fragmentation.

    • ” I don’t see how Boeing could turn around the single aisle picture so drastically in one year. Or have I missed something on that front?”
      Well they already caught up (numbers wise) and surpassed Airbus In single aisle sales (cash) in 2018.
      They were one behind in numbers (counting the 220) but beat them by $6 billion in sales (due primarily to the low sales value of the 220).

      As Scott also observed…
      “Although the 737 is now #2 in a duopoly, the order growth potential is greater than for Airbus and the A320neo. About 80% of the ceo operators ordered the neo. Unless Airbus flips a lot of 737 operators, Boeing’s lagging market share is likely to largely catch up over the coming years.”

      • And close to the same number per month.

        It will hold Boeing until they come out with the 737RS.

        Slot availability will be a factor for some (ANA?)

  7. Boeing is due for some cyclical client 737 sales, such as SWA, and yes they’ve been quite successful in wide body sales for years, with the 787-10 also due for a major up-tick. If the NMA is launched and racks up a couple hundred orders it will be quite a banner year, likely.

    It will be interesting if the 767 continues to sell for cargo, or ever does with the offered 767-2C cockpit/engines (Pratt).

    • The 787-10 is a bigger threat to AB as what they may realize. Said somewhere a couple of weeks AB should be looking at how far they could stretch the 359 with still using the current wing and landing gear for a range of ~6000Nm with XWB84’s, a sub-model with down rated XWB79’s, lower MTOW and range of ~5000Nm could also be very useful for many airlines.

      I rather see AB spending efforts on such type developments than pie-in-the-sky projects such as Project Sunrise where the outcome is almost certain not going to be in AB’s favor.

      • Engines and wing are designed for very long range. Down rating by inactivation centre wing box fuel tank and lower thrust engines wont work.
        Outside of Japan dont think its been tried for a successful short range version of a long range plane.
        Many decades ago the ‘very short range’ Dassault Mercure failed because its wing was designed to rapidly climb to cruising height for its short runs and was inefficient when run on even moderately longer runs – still short range by modern standards.
        No major plane builder is going to risk trying to sell a plane that in simulations wont be competitive and an orphan to boot.

  8. Airbus will probably start harvesting from recent development programs coming to fruition; A220’s, A320NEO’s, A330NEO, A350XWB, being delivered in growing numbers.

    Boeing is still building the first 777X, while doing rate 3.2(?) on 777. They seem IMO in a kind of denial on 737MAX future 2025-2030.

    I hope Boeing doesn’t ignore the their compromised combo in the core 350 seat-8000Nm market segment (787-10 + 777-8).

    On the NMA, as it looks now, Airbus might (again) pre-empt. With a new NB MTOW tandem: A321XLR + A322NEO. Sharing the same 101t MTOW, new fuel tank configuration, uprated GTF’s/LEAPs and wing enhancements. (A322 offering + 4-5 rows). Available from 2023, with an A321NEO+10 mln price-tag.

    And let Boeing do what they think is best.

    The Airbus management turmoil preventing growth sounds a bit desperate to me. It’s a big organisation with lots of good people.

    • Hopefully AB gets moving with the 321XLR and 322 irrespective of the NMA and don’t go to cheap on the wing but also not go over board, time and money important here.

      One question, if AB launches an 321XLR will the LR remain an option or will it replaces it?

    • Irrespective of what Boeing does, the A320.5 and A322 are no-brainers. Why Airbus has not done these I have no clue. As I argued with the Max -7 and -10, it should be easy math. Add two rows, assume only half full, six seats, $1000 seat per day, is 2 million a year, is 40 million over the aircraft life for the airline. What purchase premium is that worth, 4 million dollars per aircraft? Assume 1,000 switches from A320 to A320.5, that is 4 billion dollars for Airbus. How much to stretch the aircraft, not that much. It’s a win-win even if it is just poaching A320 orders.

    • Keesje: You don’t seem to get that approvals for future development comes form management.

      On a much lower scale, If I need an approval to keep moving I may not get it if the manager is gone or tied up with other stuff.

      Sometimes for the ops its important and makes no difference.

      You need both the approval and you need the funding to keep going or start going.

      So yes upheaval at the top can bring future to a halt.

      Current ops as we have seen do go on and credit to the organization to have done stellar in that regard with all the challenges that were not Airbus related.

    • The A321 XLR has all the hallmarks of a parts bin special. Specifically doing as much as possible without spending real money.

      The XLR Add / Delete list would work at 97T OEW — more space for fuel when required plus more space for luggage when the full range is not required.

      The three ACTs seem to be quite heavy and bulky.
      Integral tanks are a lot lighter and specially more efficient.
      Consequently the XLR would work at 97T and it will be winner at 101T.

      Then you have the issue of why 101T?

      My thoughts are that this is what could be achieved without spending real money.

      AB will save the for the “Plus” — my bet is on a MTOW figure of 110T plus lots of new stuff.

      • “The A321 XLR has all the hallmarks of a parts bin special. Specifically doing as much as possible without spending real money.”

        Sounds like my car.

    • Hi keesje,

      “The Airbus management turmoil preventing growth sounds a bit desperate to me.”
      Who are you saying is making this desperate statement? As Scott mentioned up thread:

      @Philip: If you read the post carefully, Airbus’ paralysis was the view of the people of the conference, not “LNA’s view.”

      Do you really think that everyone at the conference is blindly parroting some kind of disinformation from Boeing? They may very well be wrong. Scott, for one, didn’t say he agreed with them. However, people’s take can just be their take, without any ulterior motives.

      • At the very least, Airbus has a huge messaging problem.

        It’s also worth noting that of the 747 orders posted last year, 135 were for the former C Series. This means legacy Airbus recorded 612 orders against Boeing’s >900. This sort of illustrates the points being made.

        • I think its fair to say that Airbus did strike when Boeing was slumbering and got the A220 for virtually nothing.

          That is a major coup and belies Airbus being fully wounded.

          So adding the A220 while not internal Airbus is also more than fair.

          Yes they were weak in orders (and kind of so what on the SA planes, I mean 8 years backlog really?)

          Wide body more a concern.

          Instead of the A321 Super, maybe money best spend on a 787 competitor?

          While is unusual in the aircraft mfg, its not unknown to bulk up your company by an acquisitions which is exactly what Airbus did (and saved the C Series)

  9. I am a bit taken aback that consensus is 2500 miles for NMA, the yardstick is usually trans con US and that is 3200 miles allowing for weather, diversion and reserve fuel.

    It also works out as a viable flexibility for larger parts of the rest of the world.

    I would call it 3500 miles adding a bit more flexibility.

    The 4000 NM opens up a fair amount more.

  10. Mis stated, number of aircraft.

    2500 sounds more accurate but have to wonder when it looks like the 787 will see that many before its demise.

  11. Airbus is also digesting the implications of the A220. Should they go all in on it and build a strategy around it or is it a distraction? My bet is the former and we will see a -500 sooner rather than later.

    • Since they have come out recently and pretty much said just that, it could be quite disruptive if they did that, especially in light of: are there too many orders for planes that don’t have this newer technology? What could be key here is order slots. Can they make 150, 200, or 300 A220s per year?

      • Sam:

        It was listed here that Airbus is looking to hit rate 10 at Mirabelle by 2025 and Alabama will do rate 4 initially.

        Overall that will give them at least 8 a month next year (latter) and 20 a month down the road.

        Call it 100 a year soon to ramping up to 240 a year.

    • Airbus is dealing with how to proceed (making it proceed successfully) , but there is no question at all that its the future in that segment.

      I don’t see the distraction logic at all. Taking or resources yes but they did not open up a plant in Alabama for the A220 for giggles.

      • Distraction was a poor choice of words. My point is the A220 dropped into their lap giving Airbus new strategic options. So how is it now informing their strategic plan? Will they try keep the A220 from canibalizing the bottom end of the A320 market (which seemed to be the initial reaction) or will they embrace the A220 and let it grow even further into the A320 market.

        Doing the later lets them optimize any A32x follow on for higher GTW and ranges making it a more potent NMM competitor than perhaps it would have been without the A220 in the family.

      • “they did not open up a plant in Alabama for the A220 for giggles.”

        Or shts!

  12. Is it possible that Boeing has not revealed some key NMA feature sets yet publicly? Such as: what if the wing can include or delete a sizable folding tip for extra range in conjunction with an engine rating and center wing tank?

    I just don’t see how this is going to be a conventional “here are our two versions, with a shared engine, and two lengths” launch. Manufacturing/production/materials and engineering advances with composites make me think this will be a bit more convoluted to compare than the conventional internet commentator anticipates. The early airline enthusiasm seems to beget some sort of flexibility not yet reported.

    • An airline would probably suggest further innovation: save weight & costs, add range by replacing the folding mechanism with fuel; brilliant.

      • Leave off the folding part and you have a downsized 787-3. Sub par in all aspects.

      • And how much does the folding mechanism weigh in a 77X? Do airlines not want efficiency that fits @ 767 gates (C)?

        The flat oval/D8 shape isn’t exactly a 787-3, Uwe.

  13. Pebble in the pond time — how much FUD has BA let slip regarding the B797?

    The numbers that have made it out into the open — the do not add up.

    B767 data point vs B797 rough sketch — 7 wide / 48.5M long / 225 passengers.

    If BA is looking for 52K lbs thrust engines then the range must be over 5K NM nominal — you could make a case for a target approaching 6K NM nominal if you factor in a technology improvement of 30% plus and another 5T of fuel.

    If the B797 has a MTOW of 135T then the published figures make some sort of sense — engineering sense but not business sense.

    If the MTOW figure is in the region of 155T then the published figures suggest the BA MoM’ster is a dog and then some.

    • Well I guess we wait and see.

      Boeing’s engineers do seem to know what they are doing.

      Maybe they know something you don’t?

    • From the Seattle Times article at the link provided above by Geo.

      “ANA’s narrowbody fleet, which will take the 737 MAX jets, is split between Airbus and Boeing and appears set to remain that way after the latest orders rather than transitioning to all-Airbus as older 737s are retired. Its budget offshoot Peach, which will take the A320neos, has an all-Airbus fleet.

      However, Boeing dominates the count, at 81 percent as of end-March, among ANA aircraft with more than 100 seats.”

      • The comment was each airline ordered what suited them.

        My guess is its slots and keeping a foot in both camps.

        I was surprised as ANA looked to be shifting somewhat to Airbus where it could.

        787s aside where Airbus really has no direct competitor (and are working really well other than the engines which will be interesting to see what they do in the future).

        • ANA seems to be operating a mixed bag that is Boeing dominated. Can see them looking at the A321XLR for medium haul thinner routes where the larger wide bodies are to big. But also at the 797 for shorter haul (1-3 hours) medium to high density routes where rotation times on the ground is NB, a potential key strong point for the 797 and that part of the world?

    • More details on ANA’s narrow body order from FlightGLobal.

      “The board of ANA Holdings has approved plans to order 30 Boeing 737 Max 8s for All Nippon Airways and 18 Airbus A320neos for budget unit Peach.

      ANA will place firm orders for 20 737 Max 8s and take 10 options, valuing the deal at up to $3.51 billion. All 737 Max aircraft are powered by CFM International Leap-1B engines.

      They will replace the 47 Boeing 737NGs in ANA’s fleet that are primarily used on its domestic network, and complement the 33 A320neo family aircraft that it has in its fleet and on-order.

      Peach, meanwhile, will take the 18 A320neos in addition to the eight re-engined jets that it will start taking delivery of later this year, and will replace older A320s in its fleet. It also has orders for two A321LRs.”


  14. When discussions around the NMA/MoM bubbles up I often think that AB could use the A350 fuselage as basis for the development for such an aircraft. That is the front and nose section as well as rear section. Will require new centre section, new wing, wing box, etc.

    The advantages to many to dot down here but from development time and cost to manufacturing of fuselage, cockpit and cabin components, same as for the A350, but (much) smaller and lighter wing (less than 52m, Cat-D, lighter wing box, etc.

    On the technical side the fuselage length/width ratio for the following aircraft are;
    B787-8 = 9.8,
    A320 = 9.5,
    B737-8 = 10.5.

    The average for these are ~10, so an “A360” with with this ratio should have a fuselage length of around 60m, the A359 length is 67m which give this aircraft a typical 2 class seating of ~265.

    Engines 55-60 Klb (Ultra fans?), range 5000-6000Nm, OEW somewhere around 90-100T, the 787-8 and 789 respective OEW’s are in the order of 120 and 130T respectively.

    I rest my case, but sure AB engineers has played around with such permutations.

  15. Hope Boeing goes for the NMA, the aircraft has an airline requirement and hopefully (if they are quick) I could fly in it one day. But will it make money? Time will tell but spin-offs with an FSA/NSA very NB in the bigger picture.

    Start seeing the 797 as the CS/A220 of twin aisles.

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