Pontifications: Boeing’s alphabet soup of airplanes and more

  • It’s time for catching up on Odds and Ends.

By Scott Hamilton

March 2, 2020, © Leeham News: NMA. NSA (version 1). NSA (version 2). NLT. FSA. MOM.

By Scott Hamilton

These are Boeing’s acronyms for its next airplane.  Whatever it will be.

NMA stands for New Midmarket Airplane.

NSA version 1 stood for New Single Aisle Airplane. It was replaced by version 2, New Small Airplane. This was replaced by FSA, Future Small Airplane. Some called this the Future Single Aisle airplane.

Then there is NLT, New Light Twin, from 2011. Which really begot the NMA, which was initially the MOM, or Middle of the Market Airplane. We called it MOMA at times.

It’s all very confusing. The Next Boeing Airplane is such a moving target. Maybe it should be called the NBA, although some association involving basketball might object. (The Next Airbus Airplane logically would become the NAA.)

Then there is the next new airplane from Embraer, after its joint venture with Boeing is finally approved (as I believe it will be).

Embraer CEO John Slattery want to do a turboprop. So does this become the E3TP?

The JV agreement calls for Embraer (to be named Boeing Brasil-Commercial) to do the next jet in the 100-150 seat category. Does this become the E3150, E3JET, BBCX or something else?

Boeing’s margin on MAXes

The growing costs and charges for the 737 MAX grounding forced Boeing to reveal some interesting numbers in its 2019 10K filing with the Securities and Exchange Commission.

Carter Copeland of Melius Research dissected the full-year disclosures in a Feb. 27 research note.

The highlights, quoting verbatim:

  • This is the first time 737 cost disclosures have been seen in BA filings in roughly two decades. The figures are $463mn at YE2018 and $1.313Bn at YE2019.
  • On a per-plane basis the 2018 deferred production balance ($463mn/400 planes) implies that the first ~400 MAX aircraft were just over $1mn less profitable than the block average, or ~2.5% on a $45mn aircraft.
  • Dynamics point to pre-crisis 737 MAX cash margins of ~30%.
  • [The implied] reduction in cash margins of ~600-700bps [is] to 23% versus where margins stood pre-crisis.
  • Cash margins of ~23% will get worse in 2020 before recovering. MAXs built in 2019 (upon with the deferred costs are based) look to be 23% margin aircraft and it’s a certainty that planes produced in 2020 will be worse.
Airbus attacking Boeing freight monopolies

Boeing has long been the freighter airplane king.

For decades, Boeing itself or via third parties supplied the air cargo industry with converted 737-400s/800s; new build and P2F conversions for 767s; new build 777-200LRFs; and, of course, the new-build of P2F 747s.

Airbus had a modest run of new built A300-600Rs. Third parties converted A300B4s and A310s. The Airbus effort for new-build A330-200Fs wasn’t a great success and so far, neither has third-party A330-200 P2F conversions. An effort so far to offer new-build A330-800 or 900neo freighters hasn’t taken off.

Now, the first A321P2F conversion is nearing certification via EFW-ST Aerospace. A second company, Precision Aircraft Solutions, is nearing production of a competing A321P2F. These target the replacement market for the 757. EFW is 45% owned by Airbus.

Airbus is developing an A350-900 new built freighter. This will challenge the 777F. The 777F has been Boeing’s mainstay to bridge the production between the 777 Classic and the delayed 777-9.

The freighter market has been the big, gaping hole in the Airbus product line. After decades, it appears Airbus is finally ready to make a solid challenge.

45 Comments on “Pontifications: Boeing’s alphabet soup of airplanes and more

  1. Is it confirmed that the (possible) new A350F will be based on the A350-900, and not on the A350-1000?

    • The actual details havent been released but remember the 777F is based on the short fuselage 777-200 but with the HGW of the 777-300ER.
      Could that mean Airbus uses the same approach ?

      • Actually, the proposed 777-8F is longer than the passenger 777-8 but shorter than the 777-9.

        • The difference in length of the 777 variants was nearly 10m, quite a significant amount. And for cargo planes its not just seat row increments in length but standard deck and hold cargo container sizes that matter .
          The existing 777F has a revenue payload of 100T based on a MTOW of 347 T ( less than the 351T of the 777-300ER) , however the 777-9 has the same MTOW as the older generation.

          Its a tricky situation, how do you offer significantly more payload when the MTOW is going to be the same as the 777F ? Clearly the fuel load is less but cargo flights have stop overs on long flights rather than nonstop . The magic of Boeing increasing the passenger count doesnt work for cargo. No wonder the cargo airlines are very happy to continue buying the existing product

          • Or you just keep building 777-200 F as that was what was determined to be the right bird over a 777-300F.

            777-8F might work for FedEx, UPS and DHL (though they are not operating any that I know of)

            But lift ability and floor loading ?????????????????

            Looking at MD-11F it would seem to be non viable but last I heard FedEx and UPS have no planes (pun) to retire. 3 engines, not the best flying bird and maint heavy at this point but still going on and on.

            FedEx picked up some newer MD-11 Pax to F hulls and put the same number of old hulls into the dessert but those can come out to flying as needed .

            A lot more to the whole F area than is obvious.

  2. It does make us wonder what Boeing’s next aircraft will be, doesn’t it?!

    That’s not great – it’s difficult for airlines to think about long term strategy (with Boeing as the supplier) when there’s little confidence that Boeing have a strategy.

    In some senses Airbus have it easier – their strategy can partly be “We’re going to make a lot of A320neos”. A freight A350 is an easy option too, to at least make Boeing more worried.

    I’d be very interested to know if Boeing see themselves as reacting to Airbus, or developing their own strategy ignoring Airbus. MAX is evidence of the former. The 777x is evidence of the latter. It’s going to be unnecessarily hard for Boeing to develop a strategy if they can’t sort that fundamental philosophical goal.

    You see this in the car industry. Some manufacturers take their products in specific directions. Other manufacturers buy up others’ cars to see what makes them tick and copy them. Both approaches can be profitable. What isn’t profitable is doing half and half, because you’re never well practiced in either.

    • Boeing could do what they should have from the start ; modify the 737 .
      Rear-strakes , or a bigger tailplane , would provide the lift necessary to counterbalance the extra lift created by the Max’s giant turbofan-engines .
      D.

    • I think you can promote driving your own strategy, but ignoring competitors / competition can be lethal. Customer supplier loyalty is at an all time low.

      Vision and your own strategy can easily mix up with groupthink & not really listening to customers (MOM/NMA). It seems United was not happy about Boeing NMA concepts. Is that “news” or were we only hearing what we want to hear?

      “We have given them a lot of feedback. When Cirium asked Kirby to elaborate on the “feedback”, he responded: “We do have strong views and we’ve expressed them to Boeing”.

      https://www.flightglobal.com/air-transport/united-president-encouraged-by-boeing-nma-blank-sheet/136564.article

      Customers can show interest, say nice, encourging things about you publicly. At the end of the day, they look at risk, time line, cost and 20 year scenarios with out doing you any favors or giving you benefits of the doubt.

      Wanting competition, a healthy market place often is a reason to say nice things about underdogs. E.g. the IAG 200 737 “order”.

      https://www.cnbc.com/2019/06/18/british-airways-parent-places-first-new-order-for-boeing-737-max-since-grounding.html

      • I still struggle to see how IAG would deploy 200 MAXs ?

        Would IAG be cross-training existing Airbus pilots to the MAX, I can’t see Airbus pilots being keen to do that (clear career path, A320 to A330 to A350 vs what exactly ?). Would IAG use it as an opportunity to recruit / train an entirely new crop of 737 pilots ?

        Would the 200 new MAXs be for a new airline under the IAG tent ?

        Until that intention gets firmed up into a proper order I suspect it is just a device to extract better pricing from Airbus, if it is, I suspect it’s just not going to work.

        • That could be right . IAG sat on the fence with ‘commitments’ from both sides. But now we know Boeing cant he deliver all its firm orders for some years yet, and Airbus would have found its order book sold out and any openings would come at a price , ie include major A220 buy as well as A320s.

    • It is a duopoly market. It will always be A responding to B or B responding to A.
      A320ceo was a response to B737classic and B737NG was a response to A320CEO. (*chain broken) B737max was a response to A320neo.
      Similarly in the widebody, B777 classic was a response to A340 classic, A330ceo was a response to B777 classic, B777NG was a response to A330ceo, A340NG was a response to B777NG.
      A350 was a response to B787, and B777X was a response to A350.
      In short for boeing, in recent years their only true innovation comes from the B787. Then again Airbus isn’t much better because it is a duopoly market.

      • I suppose the difference is that Airbus have got one very hard to beat innovation that Boeing haven’t; a common FBW cockpit across the entire range. Boeing are paying a massive price for having to keep the 737 cockpit as per NG.

        Apologies, but I think that the tit-for-tat you’ve outlined is a touch too simplistic. A340 and A330 were effectively one development, Airbus got three models (there’s the MRTT too) for nearly the price of one. And with the A320neo Airbus have again seemingly got a number of market segments covered with one single basic design. Arguable the same with the A350, seemingly challenging both 787 and 777X. Even the A330neo – which cost next to nothing – is doing the intended thing of forcing 787 price reductions. The A380 is another matter of course…

        The way I see it is that Airbus have repeatedly done something different or innovative, be it FBW, or expandable / shared designs, and somehow seem to be able to head off nearly everything Boeing does without directly copying them. Boeing have innovated – 777Classic was properly good in its day – but everything since has seemingly run into problems of some sort (market, weight, technology, development).

        Basically I think Boeing need a proper mindset shake-up, but I worry about their financial ability to do that now.

  3. NNBA? Next New Boeing Aircraft?

    As far as Airbus making inroads into the freighter market, it would be cool if they do manage to achieve some success with theses latest projects but it what, if anything, has changed in order to achieve said success?

    • The advance would come from new engines AND a new production process with Boeing levering its 737 wing production process and perhaps the holy grail, an automated fuselage riveting line.
      Its a difficult choice as DHC under new owners isnt going to sit on its hands and ATR wont be standing still.

  4. I’ve got just the name …
    B-737-BT (for Big-Tail) .
    This could sport either rear-strakes , or a bigger tailplane .

    *Splat two frogs with one stone !
    D.H.

    • [Edited]

      the 737Max has plenty of problems, but the size of the tailplane isn’t one of them.

      even if they doubled the size of the tailplane, the airplane would still have the same fundamental issue of non-linear elevator effort because the problem is a shifting CoP on the main wing at certain angles of attack, not the size of the tailplane. if anything a larger tailplane might make that worse as the problem is effectively _too much_ authority in particular AoA situations.

      • But that won’t stop them from pacification on it, how dare you bring logic into this?

        We all know aircraft fly on faith not Bernoulli

  5. You forgot the Boeings 7J7 P3 (Passanger Pleasing Plane) samt some working namnes like Yellowstone Y1 and Y2?

  6. If Boeing cannot get off the pot and sort-out their alphabet soup they might as well call it SOL or DOA.

    • If Boeing can not get of the Pot Boeing then should try some HASISH and start singing fly me to the Moon.

  7. 3 Things that are always 10 yeas away

    Fusion Power

    Open Rotor

    Airbus and Freighters.

    Still a lot of cheap 757s to convert, more all the time with the A321XX

    Airbus can’t change the can structure as you don’t set the pace.

    How Low can Boeing go? I hear arguments A330NEO has Boeing locked out as its low cost, now Boeing has 777 paid for and ??????????? 747 the same.

    767 just can’t be beat. Much like the MD-11 you scratch your head but they both keep going and going and going and going and there is a reason.

    • Trouble is all those cheap 757s stayed in airline service way too long.
      Uniteds oldest 757 of the 70 or so still flying with them is 30 years since first flight.

      Thats way way older than usual for a major carrier. How much life is left to make it economic to do a cargo conversion for a lot of those planes , and who is releasing them anyway

    • What is cheaper to have?
      A 737-8 or a 767F?
      I’d guess the freighter.
      IMU the 767F is another product sold at cost or below to keep Airbus at bay. ( The US State sponsors via the Tanker project.)

      • do you have any idea how much Boeing is losing on the KC-46? they will probably make it back long term on service & upgrades but the USG is not serving up a lot of cash on this. firm fixed price contract for the first 179 frames.

        only contract mod so far the USG is paying for is part of the synthetic vision system redo and no way is boeing getting whole on that.

        • Yes, this is the same military subsidy argument that the WTO rightfully rejected.

          The KC-46 is receiving extra funding for the boom redesign, as the specs were inadequate for the connecting force of lighter aircraft like the A-10 and F-16. The USAF admitted they didn’t provide the right specs. But I think Boeing is on the line for the vision system and other issues.

          Besides the wing pod certification, in which Boeing played only a small role, I think the vision system is the major remaining problem. There has been some progress on that in the last few months, according to recent testimony before congress.

          • Rob:
            Pretty well on but Boeing is responsible for the whole thing, so the Wing Pod issue are on them.

            No excuses, the are an on going joke as far as execution.

            No bench, they put the F team on the T and that is what you get.

            Screw with an organization enough and it starts to fail which is what Boeing is currently doing.

          • TW, the key difference is that the KC-46 has a civilian supplemental type rating, as well as the military certification. Refueling systems on a civilian aircraft is a new thing, and the manufacturer Cobham has not had to meet those certification requirements before. So they’ve struggled quite a bit with that, to the point that Boeing withheld partial payment until certified.

            Functionally, the WARP’s are now ok, after some initial glitches. They have passed refueling testing, but not yet civilian certification that is needed before the Air Force can accept them for deployment..

        • You have to differentiate between what was planned
          and what came about due to hamfistedness / incompetence. And afair cost excesses are not fully loaded onto Boeing. I seem to remember some contingency provisions for excessive cost overruns?

          Keeping 767 production infrastructure was integral to the tanker project. That part of production cost for 767F was thus held up by another customer.

          Nobody here seems to have a counter argument to my pricing guess?

          • Uwe, if you read your own reference, it says that the government’s liability for cost overruns is limited to 6% of the maximum cost, which amounts to about $300M, and that still falls under the contract ceiling. The rest is on Boeing.

            Also the contract allows for consideration to be paid for schedule overruns, which also is on Boeing.

            And again, the 767 was quite obviously a viable program before the tanker contract, including in the form of the KC-787 tanker from outside the US.. So the military support argument is not valid, as ruled by the WTO.

          • The (previous) 767 tanker projects (I,J) were massive cases of PITA. Much delayed, wrong fuel pods, in general a graceless pile up. Apparently not so much different from the US procurement.
            In contrast the IAI conversions seem to have no issues?

          • All tanker programs go through startup problems. MRTT lost booms for awhile, but problems solved now. KC-767 had pod flutter problems but again solved now. KC-46 problems will be solved too, we’ve already seen some resolved.

            IAI development is done in house and with private investment, so we have no info as to development problems. We do know they are converted airframes and they use proprietary hardware. Boeing is constantly under the spotlight as the government pays for military development.

            The MMTT capabilities are not the same but the price is half, so they are a bargain. They are purchased by countries needing very low numbers at low cost, and also unlikely to need defensive capability.

          • “All tanker programs go through startup problems.”

            Problems go beyond binary problems or not. There is quality and quantity involved. All the Boeing project past KC135 seem to have had massive longstanding problems.

          • KC-135 is obviously dated but has been the workhorse of the world fleet for over 60 years, with more years of service still to come. There are more than 420 in service around the world.

            There are no massive longstanding problems, in fact it has been quite adaptable. New engines, new boom, new avionics, wing refueling pods, all have kept it viable.

            It has suffered from normal aging of airframes and components, so only about half of the original numbers remain in service. And it ultimately will require repelcment by the more capable KC-46.

          • You are again stumbling over reading comprehension issues.
            I wrote _after_ the KC135.
            i.e. Boeing in house competence did not survive
            beyond the 70/80ties !?

  8. I see a report from Paris fashion Week.

    “Balenciaga floods runway at Fashion Week to highlight climate crisis”

    Well of course that will help, but its not an airport runway. Everyone is doing their bit.

  9. Companies like Boeing make paper airplanes all the time. Have for a long time.
    Sometimes preliminary, not proceeded far with.
    (Sometimes bits and models to explore something, like fitting the same flight deck into different fuselages (as in 767 and 757 albeit with different overhead panel.)
    Sometimes searching for the right configuration – read history of the XB-70 – USAF wanted high speed, various odd configurations tried, initially presumed only dash over target was feasible but better understanding/ research/ thinking led to an airplane that could efficiently fly at high speed the whole mission.
    Sometimes more developed and discussing with customers – read history of discussion with USAF that eventually resulted in the B-52 after iterations, and I suppose the Sonic Cruiser that was not what the airlines wanted, with honourable mention of the Dash 7 which was a good machine still flying but airlines didn’t want to pay for STOL capability.

  10. Sometimes making things and flying them – read history of customer push on Mr. Douglas to get to the DC-3 from predecessors.
    Sometimes advanced/smart/right-sized, as the DC-3 was (who remembers the Boeing 247?).

    Some that go into production are a complete botch (the Dassult Mercure comes to mind – wasn’t enough of an advantage of the 737 (very few sold, France did better with the A300 which was a big advantage over competion for modest range). And the Bristol Brabazon – too large for airlines at the time, only the prototype flew. With the Convair jetliners bringing up the rear for a failure award – didn’t have promised transcon range so not many of those sold, competition had the range needed. Or a slow start like the Comet and Electra turboprop due serious flaws causing crashes.

    Sometimes middling, like the Martin prop airliners that Convair’s outsold, and the YS11 into a glutted market of old airplanes and competitiors.

    And sometimes surprises, such as the Twin Otter bushplane that became a popular commuter airliner (though later eclipsed by faster/bigger/pressurized – it fit a need at the moment, in a sense a market test for airlines of short/small service).

    Boeing of course has to get itself into a position of being able to create well and produce quality efficiently.

    • In a way the Mercure lives on in the A320.
      It was too tightly centered on the French use case. ( overall load leaning to payload not fuel ) to find interest in the US ( add pronounced NIH syndrome ).
      All the frames produced were “loved to death”. Intensive use till 1995. Not a botched design.
      What the A300 changed beyond being an innovative product was the concerted European effort to counter the dominant US manufacturers with some staying power.
      The DC3 got its boost from WWII production as C-47 and post WWII by way of a large backstore of frames and parts.

      • Air Inter, short haul operator, flew 11 including a refurbished prototype, receiving a subsidy for operating an orphan type. https://en.wikipedia.org/wiki/Air_Inter#Fleet

        Operated the French built Caravelle for a long time, even in low vis conditions. (https://en.wikipedia.org/wiki/Sud_Aviation_Caravelle)

        I was advised that cockpit task assignment was rigid and self-discipline good:
        – one pilot’s job was to fly to DH then make a go-around
        – the other pilot was to have eyes outside and state clearly s/he was taking over if landing could be made visually, the other pilot would relinquish control.

        CRM long before the term was invented.
        (So much for xenophobes claiming the French don’t have discipline when they want to. 😉

      • The DC-3 was a success before WWII. Some say it was the first airliner that could be profitable carrying only pax.

        https://en.wikipedia.org/wiki/Douglas_DC-3

        The Mercure was a botched development, capability too limited to be a real alternative to the 737 for many European and North American operators. Many did short flights on the milk runs but wanted longer range for other routes and charters (PW routinely flew the 737-200 into Mexico). Optimization for short routes gives lower operating cost, but limits flexibility. Might have suited Aloha and Hawaiin inter-island routes, as they had no longer routes, was it large enough?

        Apparently an efficient reliable airliner, but product strategy reminds me of the Brabazon which airlines of its day did not want because it was too large.

Leave a Reply

Your email address will not be published. Required fields are marked *