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By Scott Hamilton

“The NMA is gone. Long live the NMA.”–lessor CEO. Photo: Leeham Co.

April 2, 2020, © Leeham News: Boeing’s New Midmarket Airplane, or a new concept, is the last thing on the plate right now.

But Boeing’s future product strategy nevertheless requires long-term thinking even as the short- to medium-term is in chaos.

Interviews were conducted March 2 at a major aerospace conference in Austin (TX), just days before the coronavirus crisis exploded exponentially across the globe.

The CEO of the major lessor, Avolon, declared the NMA dead and predicted a new single-aisle airplane will be Boeing’s next project.

An executive of Pratt & Whitney offered a similar view.

Summary

• “The NMA is gone. Long live the NMA. That moment has passed.
• Back to the 757 replacement concept and, now, A321XLR competitor.
• Single-aisle vs light twin-aisle is part of the challenge.
• New airplane must be “dramatically” more efficient than MAX, neo.
• 2030 decade is the quickest this dramatic improvement can be achieved.

Discussion

Pratt & Whitney

Rick Deurloo

Rick Deurloo, SVP-Sales, Marketing and Customer Support for PW, believes Boeing will head down the path of a 757 replacement. This is where the conversation started at Boeing in 2012. This evolved over time to a twin-aisle, “middle of the market” airplane over the next few years. But Boeing wasn’t able to close the business case.

This, Deurloo believes, has shifted back.

“When we were engaged and continue to be engaged, actually, with Boeing on but this XLR-type competing plane, the NMA, or whether they do is 757 replacement. I feel more strongly that you may see that become the outcome of what Boeing does–more of a 757 replacement as opposed to what the NMA was originally intended for,” Deurloo said.

“We think we have enough technology to get that fuel burn. I think the challenge, for us, is ultimately how you get an economic value as an engine provider to make sure.”

Deurloo said PW believes it can get a double-digit fuel burn improvement out of the GTF. PW is  leveraging the engine and it has a scaled-up version of what is on today’s neo-family.

“It would be a new center-line engine, and we know or we felt strongly that we would need a sole-source position on that,” he said. “We were disappointed as that slowed down, but we understand what Boeing’s focused on, as it should be.”

PW believes Boeing will focus again on a 757 replacement. “I think we have an engine for that airplane, or will have an engine for that airplane, that delivers the double-digit fuel burn improvement. Then it takes a step further.”

However, a 2025 entry-into-service, or even in this decade, seems out of the question in PW’s analysis.

“We like the idea of that opportunity on a 737 next-gen single-aisle, but we need, I think, until 2030 to get that kind of technical advancement, to get double-digits off the GTF 15%. That’s how we see it,” Deurloo said.

Avolon

• Avolon is an Irish aircraft leasing company with more than 900 aircraft. Dohmnal Slattery is the CEO.

Avolon is one of many lessors and airlines with which Boeing consultant on the NMA concept, or alternatives.

Dohmnal Slattery

“My view on this is actually very, very simple,” Slattery said. “The NMA is gone. Long live the NMA. That moment has passed.”

If not the NMA, or a slightly smaller “NMA Lite,” then what?

“Let’s assume for a second it’s a new single-aisle type of aeroplane. The hard facts are that the airline community and the lessor community will demand an aircraft that’s dramatically more fuel-efficient than anything that’s in service today,” Slattery said.

“Of course, the MAX is dramatically more fuel-efficient than the NG. When you talk to the engine manufacturers, whether it’s CFMI, who are the incumbent on the current platform or any other guys, they’ll pretty much tell you that that leap forward in technology, i.e. another 15% to 20%, is just simply not executable before the middle of the next decade, another 15 years from now. It may require a fundamental rethink on the design of aircraft or the engine set.”

Slattery views the prospect of Boeing coming forward with a new airplane this decade as problematic.

“I can’t see either of the OEMs going to their boards, where they have shareholders and equity returns, trying to rationalize a sort of mid-development-type airplane. I’m very much of the view that Boeing and Airbus should stick to their knitting,” he said. “Boeing should try and get MAX airplanes back flying safely, as quickly as possible, and continue to iterate the half a percent or 1% improvements every year, that we’ve seen on airplane design or engine efficiency. Let the engine guys, then, put all of their time and effort and resources into a piece of technology that’s 15 years out.”

Slattery said that from an efficiency perspective, if Boeing decided to design it today, with EIS 6-8 years from now, Airbus will wait and put a brand new airplane in six years later.

“Nobody will want to buy the Boeing product, because they’ll wait for Airbus,” Slattery said.

It’s the same argument Airbus executives advance in talking down the idea of a new Boeing airplane this decade.

Over at Boeing

On the January 29 earnings call for the 2019 financial reporting year, CEO David Calhoun said the first priority is getting the MAX recertified.

“We are continuing to study the market and develop plans for future commercial airplanes.” Calhoun added. “As we reprioritize and streamline some of our investments, we’ve asked the team to step back and reassess our commercial product development strategy to determine what family of airplanes will be needed in the future. The team will build on the work we have done as part of the NMA design and production system analysis as we move forward. We’re in the airplane development business, and we’re going to stay in the airplane development business. We’ll listen careful to our customers and the markets.

“We’re going to refresh the market work that was done to come up with the NMA concept. We’re going to do that quickly. Customers will help us; certainly, a lot of people have reached out to me on that subject and as soon as we come to a spec of what we want to do, we’ll move very quickly going forward,” Calhoun said.

“I will suggest and believe that the tools that we have available to us to differentiate that product from any competitive offering will be significant, and I’m highly confident in our ability to do it. That has a lot to do with the background work that was done. The programs that basically underwrite the NMA program, those programs on design and manufacturability, are still going in full force.”

Job, budget reductions

LNA is told by multiple sources that engineers and others assigned to the NMA product development group have been looking for jobs elsewhere within Boeing. Boeing did not directly respond to a question about this and in any event, it’s unclear if job and budget reductions are MAX- or virus-related. Boeing also did not respond to the single- vs twin-aisle leaning.