May 21, 2019, © Leeham News, Toulouse: The chief commercial officer for Airbus half hopes Boeing will step into a briar patch and launch its long-discussed New Midmarket Airplane, but the real message is clear: leave well enough alone.
Christian Scherer, the chief commercial officer for Airbus, said he wouldn’t speak for Boeing when asked if Boeing “has” to launch the NMA because of the declining market share of the 737 MAX vs the A321neo and inferior range and field performance of the -9/10 MAXes. He questioned Boeing’s own position about the NMA.
He made these remarks on the sidelines of the annual Airbus Innovation Days pre-air show briefings.
“I’m not sure they have a unified position on it. What I want to say is that we are in a very competitive duopoly, which is great for our customers,” he said. “There’s competition everywhere. You don’t have to dominate one segment or the other segment. There’s quite healthy business in it for Boeing on the 737. There’s quite healthy business in it on bigger airplanes. I’m not sure they have to do anything. Do they want to do something? Yeah, maybe.”
“But the fundamental question is, what do they bring to the market?” Scherer asked. “If the primary driver is a selfish one, to integrate their supply chain and make capability more on this new program, that’s one thing. But what does this airplane bring? I haven’t seen any significant new technology.”
Boeing CEO Dennis Muilenburg has been clear that the NMA will use technology developed from the 787, 777X and 737 MAX. Advanced manufacturing production is becoming increasingly the public focus for the new airplane, from Boeing’s perspective.
From the airline’s point of view, Boeing says the NMA will lower economic costs vs the remaining 767s, 757s and A330 classics by 25% to 30%–a huge benefit Scherer glossed over.
“It’s the competitor in me that says there is a side of me that wishes Boeing steps into this briar patch. But they have their own reasons for doing things. All I can say is that Airbus has a very, very healthy situation with two very, very advanced programs like the A321neo and the A330-900 to address this middle of the market sector.
“You have an A321 that is gradually moving toward trans-Atlantic range capability. You have an A330 that we can densify to a point that it offers absolutely unmatched seat cost capability for this market segment. Why the hell would you invest $12bn or $15bn to go into this marketplace and get stuck between a rock and a hard place?”
With an A330neo that hasn’t yet taken off in sales, and Boeing claims the NMA will be more economical than the Airbus, it’s not to Airbus’ advantage to do anything but talk down the NMA and discourage market interest.
It’s a game Airbus and Boeing play frequently. Boeing talks up the NMA—though it dithers with a decision—in hopes of persuading airlines to wait before potentially ordering the A321neo.
Boeing’s Authority to Offer its airplane for sale was expected at the Paris Air Show next month. The MAX crisis likely delays this ATO until at least the fourth quarter.