March 20, 2019, © Leeham News: With nearly 400 Boeing 737 MAXes grounded across the globe, few will remember that Boeing didn’t really want to do the MAX.
Officials in 2010-2011 engineered the MAX as a fallback airplane in case its hand was forced by Airbus as it first pondered and then launched the A320neo.
The president of Boeing Commercial Airplanes at the time, Jim Albaugh, and the head of the 737 program then, Mike Bair, talked down the thought of re-engining the 737 even as it was developed. Albaugh wanted a new, clean sheet airplane to replace the 737.
When Airbus was about to land American Airlines with a huge order for the A320 family, both the ceo and neo, Boeing’s hand was forced. Within 48 hours, Jim McNerney, Albaugh’s boss, made the decision to go forward with what would become the MAX.
LNA dug into its archives for recorded interviews, transcripts and events with Albaugh and Bair. What follows paints the picture of Boeing’s view at the time about the 737 re-engining. LNA also spoke last year with a former Boeing engineer who worked on the MAX program. This interview was before the Lion Air crash in October.
As Airbus moved toward re-engining the A320 in 2010, and with a program launch in December that year, Boeing, predictably, thumbed its collective nose at the neo and the entire re-engining concept.
At an employee meeting Jan. 14, 2011, Albaugh, dismissed the neo and its potential competitiveness vs the 737NG.
“I think Airbus will find re-engining the A320 more challenging than they think it will be,” he told employees during one of his periodic “Excellence” meetings. “When they get done, they will have an airplane that might be as good as the Next Generation 737. We think we can continue to make incremental improvements to the 737 to make sure that it is a more capable airplane than even the re-engined A320.
“At the same time, while we haven’t made a firm decision, I don’t think we will re-engine the 737. It’s really hard to come up with a compelling business case to do that. We think the right answer to probably do a new small airplane that might come out toward the end of this decade. We’ll make that decision probably sometime in the middle of this year,” he said.
“Every customer I talk to has a real hard time understanding why a re-engined airplane makes sense,” Albaugh said. “Airbus says it will cost them a billion Euros to re-engine. My guess is it’s going to cost them considerably more than that. The engines are bigger. They are going to have to redesign the wings, the gear. It’s going to be a design change that will ripple through that airframe.
“They have got to pass that cost on. The engines are going to weigh more. It’s going to be a different engine, so if you buy a neo and you have a classic 320, you’ll have mixed engines. It’s going to mean a lot of different maintenance and spares requirements.”
Albaugh wasn’t through.
“When you boil all that down, our view is a re-engined airplane gives about a 2 or 3% economic benefit to the customer. Right now, in our view, the 737 gives our customers about a 5 or 6% better economic value than the 320. They eat up about half of that with the 320 and we continue to incrementally improve the 737.”
But Boeing being Boeing, it devoted considerable engineering resources to studying a 737RE, as the re-engine was informally known, as well as an entirely new design. The latter was Albaugh’s clear preference, as it was for any airplane designer.
“We were basically keeping the RE effort alive as a stalking horse for the new small airplane effort at that time,” recalled an engineer on the program years later. “It was good that we did, too, as we were able to put something together really quickly for that whole American Airlines debacle and get the MAX started as quickly as we did.
“The airplane as it was defined then was struggling to beat a reengined 737 from a performance standpoint and–if it contained significant composites–they had no idea how to build it at any kind of 737-like production rate (never mind all the handwringing about the where).”
Boeing looked at re-engining the 737NG two or three times. The company wanted minimal changes, but gaining significant improvements remained elusive.
As for the preferred solution, “at that time, they couldn’t make up their mind whether it would be a single-aisle or a twin-aisle,” the engineer said.
At one point, “the wind was blowing toward a new airplane.” The 737, he said, was structurally old technology, “with a 707 nose on the same sized body. We could never come up with anything better than a 737 and bring it to life.”
So, the engineer said, the 737RE was dropped.
In a March 2011 interview with this writer for Aircraft Technology magazine, Mike Bair—then 737 product development head—said engineers had figured out how to reengine the airplane with either the Pratt & Whitney GTF or the CFM LEAP-X.
“We’ve done a lot of work [on the potential of putting a new engine on the 737],” Bair said. “There’s been fairly extensive engineering work on it. We
understand what the assignment would be if we decide to do that.”
By this time, Boeing had been through the “concept feasible gate” that validated that re-engining was something that could be done, he said.
“We can absolutely put a different engine on this airplane,” Bair said. “We figured out a way to get a big enough engine under the wing that even if we had more space, we wouldn’t put a bigger engine.”
A still-bigger engine would be somewhat more fuel efficient but it would weigh more and have more drag, offsetting some of the additional fuel benefits, he said.
Bair said the nose gear would have to be lengthened about eight inches (which, in fact, is what happened in the final design).
The economic improvements were projected at the low teens, Bair said. (This proved to underestimate the actual benefits, which came in around 15%-16% better than the 737 NG after aerodynamic clean-up was finished.)
Bair said Boeing looked at engines from P&W, CFM and Rolls-Royce.
The re-engining cost budget was targeted for between $1bn and $2bn, Boeing insiders said. Boeing Co. CFO James Bell publicly pegged the cost at about 10% of a new airplane, widely believed to be about $10bn-$12bn in the 737 class.
Bair said that with few exceptions, as Boeing showed the 737RE to customers, they asked if “there was something else we can do?”
The cash operating cost benefit was half of the fuel burn reduction, he said. (If there is a 10% fuel burn reduction, the COC benefit is 5%. Maintenance cost changes take a hit on this. The 737RE is 5,000 lbs heavier than the 737NG, which means more wear on wheels and brakes, for example. Bair’s example is now reduced by 1%, for a 4% COC benefit. Higher ownership costs take their toll. “That 4% goes down to 2 ½ or 3,” he said.
By the time all factors are done, the airplane benefit is down to about 1%. “It’s kind of like, really?” Bair said.
Of course, in the end the A320neo and 737 MAX economic benefit over the A320ceo and 737 NG was 15%-16% or more. But the point was made.
With the 737RE on the shelf, Bair said Boeing was focused on what a new airplane might be that would enter service in the “back half of the  decade,” around 2019 or 2020.
“We think there is a fairly compelling bundle of technologies we could put into a new airplane,” he said.
Engine technologies for the new, future airplane (which we’ll call NFA) could come from maturing the GTF, LEAP and Trent designs from P&W, CFM and Rolls-Royce, he said.
Boeing, in 2011, was looking at airplanes above and below 150 seats, which at the time was what officials liked to call “the heart of the market.” (Seven years later, this had moved to 162 seats.)
“I try to avoid saying ‘replace the 737,’ because what we’re doing is something a little bit different. We’re trying to figure out what does the world want in 2030, in 2035?” Bair said. “That’s when this airplane will be kind of at its prime. On the surface, it’s hard to image what worked well in 2000 is going to work well in 2030.
Boeing was indecisive about which direction to choose.
The ambiguity was driven in no small part during this era by the continued 787 debacle, which at the time of this interview, had not entered service.
By July 2011, when its hand was finally forced, the 787 was more than three years late, billions of dollars over budget and it hadn’t been delivered to any customer yet. Word on the street was that there was no way the Board of Directors would approve a new, clean-sheet airplane program under these circumstances and that it had lost confidence in Boeing Commercial Airplanes and the Longacres executives to meet their promises, keep a schedule and keep to budget.
“What we have done is taken this option, and it is truly an option, and we’ve put it on the shelf,” Bair said in that March Aircraft Technology interview. “We can change our mind and exercise it at any time if we decide if that’s the right path or something happens in the industry that makes it more compelling. It’s hard to imagine what that might be.”
The pending Airbus order from American Airlines was that “something.” The MAX was launched in July 2011 with the American order.