Leeham News and Analysis
There's more to real news than a news release.
There's more to real news than a news release.
Leeham News and Analysis
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- Dissecting Boeing CEO’s statement next new airplane will cost $50bn April 15, 2024
Podcast: 10 Minutes About Boeing’s Next New Airplane
Dec. 29, 2020, © Leeham News: As Boeing works to return the 737 MAX to service and clear its inventory of ~450 airplanes, it must look to the future.
CEO David Calhoun all but killed the New Midmarket Airplane when he took over from Dennis Muilenburg in January. A full product strategy review would be undertaken, he said.
Boeing always looks at alternatives. In addition to the twin-aisle NMA, Boeing also had a single-aisle airplane under study.
In this episode of 10 Minutes About, LNA discusses what Boeing’s Next New Airplane should be.
Boeing NMA concept, by Leeham News.
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I have been wondering if Ryanair might come to regret the MAX 200.
When seats become too close together, you can’t stand up until you are in the aisle.It will take too long to disembark for very short journeys and a significant proportion of passengers will just decide to pay an extra £15 on another airline rather than endure the discomfort for anything longer.
And who’ll want them when Ryanair is finished with them? They’re currently a “Ryanair-only” plane…that’s not good for second-hand uptake. Sure, a new operator could disable a pair of exits and configure the interior with fewer seats, but who’d realistically want to do that?
Interesting point, what has become of the daily rental “move ’em on” model?Ryanair average age is 5.5 years but pickle fork problems affected 15 year olds. Its way past time to look into Irelands predatory tax system.
Grubbie – ‘…you can’t stand up until you are in the aisle…’ Might not MO’L yet get his ‘standing room only’ variant (:-)>?
I think the podcast works nicely. I think Leeham leans towards a dual aisle aircraft?
Wondering about three consequences, first boarding, deboarding. As you say the passenger in front of you getting his stuff, blocking the way. Two aisles and a wider door doesn’t remove that problem. The guy is still in front of you.
And then weight, OEW. Twin aisles tends to bump weight and the close related direct operation costs. Take the A321 50t OEW as a target. You should go beneath that, not over.
Third maybe most importantly, the, IMO unjustified, assumption is MAX is going to be fine until 2035. I think the writing on the wall is it isn’t. Boeing doesn’t need a 150+150 SWA A223 LOI this time to wake up I hope.
Does Boeing have the ability to build / assemble a new plane?
Do they have the Finances, Technical Ability, and Suppliers to even think about building a new plane?
No.
I’m not sure the “circa 15% better than the previous generation” premise is necessarily valid in this case. That is normally held to be true as the necessary improvement to justify the $10-15bn (?) development costs vs continuing to sell the previous model. HOWEVER, if the previous model is not going to sell well, there is the “but for” argument. The question then becomes “what is the least bad option?”
Prior to the Max crashes, the -8 was outselling the A320neo by 55/45, the -7 and A319neo were irrelevant with circa 50 orders each, but the A321neo was smashing the -9/-10 by 80/20. This becomes an increasingly big problem as upgauging means the trend is towards larger planes:
when 30% of production is A321/-9/-10, and 70% is A320/-8, then Airbus has 55% share and Boeing 45% – not great for Boeing, but OK, especially when producing far more wide bodies than Airbus as well.
HOWEVER when 45%+ of production is the A321/-9/-10 and 55%- is the A320/-8, then Airbus has 61%+ narrow body share and Boeing 39%-, so Airbus is producing over 50% more narrow bodies than Boeing (which gives quite large scale benefits) AND is producing more of the higher margin largest variants (the A321 has 15% more capacity than the A320, is priced maybe 10% higher, but only costs 5-8% more to make, so the margins are higher). Furthermore, with the 777 at 2 per month and the 787 at 5 per month, Boeing can no longer rely on the WB dominance it had previously.
Therefore, if Boeing wait until they have the 15% fuel burn improvement, they are very much at the mercy of Airbus, who has both volume and pricing benefits.
On the other hand, going for the 757 sized aircraft (or, given that this will not be using any 757 parts, more correctly, going for the A321/A322 sized aircraft), they don’t need to be 10-15% better than the previous planes, but only need to be marginally better than the competition. I don’t see how Boeing could fail to produce a marginally better plane than the A321neo, even if we assume that the A321 gets re-winged and re-engined with the equivalent technology – the A321neo is a 1980s design(that has been upgraded with 2010 engine technology), so will be more compromised.
Going for the 200-250 seat market would also mean that the existing orders for the -8 would be less cannibalised by the NBA than the A320/A321 orders would be by the Airbus response (assuming new wings and engines)
Where the A320 and 737-700/800 were designed for about 150 seats single and mixed class, that seems to have shifted to 200 seats. Ryanair has the 737-8200, Delta has more 737-900ERs than -800s, United is going with 9s and 10s, Alaska looks to be done with the -8 size. A320 operators are switching to more and more A321s. To me it looks like a standard size is developing across the board. As long as it takes to pilots and takes up a gate, just use a standard 200 seat aircraft, what’s the point of 150? Just fly the empty seats. Below that the E175 and CS300 will fill the space for the foreseeable future.
How light can an all new 200 seat aircraft be for Southwest or Ryanair? There is one challenge.
The 7-year development cycle has become conceptually frozen as a planning assumption. We have forgotten that Boeing developed every new model and every derivative up to and including the 777 in 4 years or less, including the 757 and 767 concurrently.
The difference is that earlier models were managed within an integrated design and manufacturing business model. From roughly 1996 on, Boeing chose a global supply chain business model, with much weaker coordination and project management, and much longer flow times.
Boeing got what it wanted – leverage to extract more cash flow from other stakeholders in each project, and $70 B in share repurchases since 1998.
On the downside – that business model came with much longer development cycles, losses and write-offs of $30 B on the 787, another $30 B on the MAX, additional shortcomings on the 747-8 777X and tanker, erosion of management engineering and production skills, brand damage, and loss of strategic position in the marketplace.
That is certainly part of the context for considering Boeing’s next model airplane.
The 757 and 767 had global supply partners in manufacturing
The fuselage ( some fuselage sections destined for Tulsa by North American) and empennage to make up only half the plane was a Boeing thing first at Renton for the 757 and then later at Wichita alongside the 737. The 767 has structures made in Japan.
The Tulsa plant later became part of Boeing with the takeover of North American. ( probably now closed)
https://www.boeing.com/news/frontiers/archive/2003/july/ts_ids.html
At least part of the change was that Boeing did not engineer the pieces, the supplier did.
That of course fails if the supplier is not proficient with design and it lacks integration even if it more or less fits.
It also much slower paced as those parts are shipped not flown.
Boeing lost control of it all with the 787 outsourced model that was supposed to be risk taking by the suppliers.
Boeing may have one aircraft management team that can do the job, but the rest as we see falls apart.
They seem to be focused on the T-7A right now (and we still have to see how that does or does not work out)
I think the organization is so ripped apart and the skill areas fragmented to a dozen different sites (if they even have the skills) they could not do a new aircraft if they wanted to and that is question that they want to.
Its well known that having your design and engineering as well as your industrialization group in one location works.
Boeing has actively torn that down.
There is also the production ramp to consider. How long before an all new model can be produced at 15/month? Another year after EIS at least, probably 2.
Boeing already tried to shorten the dev cycles for the B748, the B787, B777x and so on.
The result was a disaster.
Modern airplanes are more difficult to develop, production planning and supply chain are a huge point, certification takes ages etc. etc.
Especially after the Max crisis, certification will take more not less time.
If Boeing tries to cut short and push smth on the market in say 4 year, about 2025, Airbus can sit back and watch them fail.
Boeing is in a bit of a pickle and I think that passenger loading times is the least of their worries right now.
A clean sheet will cost them some $15-20 billion. Money they don’t have.
The market for the model you suggest (225-275 pax, 5000NM) sounds an awful lot like the 767 market. 1000 aircraft total?
They will have to recoup $15-20 million per airframe in R&D costs. Airlines will not wanna pay 787 prices for 767 performance.
This still leaves the 737 Max line to counter the A220/A320 families, a battle which it is losing.
Tough decisions.
Frank – Boeing in a pickle? They’ll be needing these, then… https://www.google.com/search?q=(Boeing+%2B+pickle-fork)&client=firefox-b-d&sxsrf=ALeKk03pM_MXAekehCMnNPSv0lNtNDC_hA:1609869913789&tbm=isch&source=iu&ictx=1&fir=6znqdZ5x8O1u0M%252C3YEUt_8zteqC7M%252C_&vet=1&usg=AI4_-kT7QmqcfPOzLxaJuIzS_4IUNCCodA&sa=X&ved=2ahUKEwiW4-HisIXuAhWFqHEKHQDqDjwQ9QF6BAgcEAE&biw=1760&bih=886#imgrc=6znqdZ5x8O1u0M
Would have wider reach if podcast was available on top podcast apps like Apple.
Who cares about Apple. Get something that is compatible with the rest of the world.
Something smaller than the NMA sounds good. Airbus can do a lot with the A321, but the one thing they can’t do is add two aisles. What is the smallest twin aisle? 44m wings, 40m folding wings for a 36m gate? 45K engines, 40K engines? 2-3-2 or 2-2-2 seating? 46m length with a stretch to 52m?
It would be heavier and less efficient.
Boeings’ situation is a strategic dilemma.
Their main product is losing, on both ends of the market. The smaller versions are down against the A220, often forgotten that Airbus has now scooped up the 130-150 Pax and will come with a -500 stretch to attack the -8 and 320 from below.
Same on the upper end – the A321neo pushed Boeing already in the Max 10, to not lose the Max9 customers to Airbus.
And Boeing already had to play the price card, so the Max are cheaper than the Neos.
On the other side, with the end of the B767, and the production cost issue with the B788, Boeing has given up the MOM.
But can it be sense fully addressed at all?
Airbus has done the same and moved from the successful A300 to the also successful A330 which is now only the A339.
Is that MOM a gap that can be addressed efficiently and economically? Or is it the natural gap between a SA and a WB?
The gap is defined by the saying of “too much aircraft” about the B787. Medium routes, long short haul and short long haul for about 200 – 270 pax.
Any modern SA is torture for flights above 4h in actual configs, you can’t cramp 220 Pax in an A321neo and fly it for 6h.
You would need a C or a premium eco at least, a bit more space, so the capacity shrinks to below 200 pax and you have payload/range issues.
That MOM is exactly where the B757-200 was range wise, the A300 and the B767-200 and B767-300ER were capacity wise.
But remember, these planes were pushed out by A330 and B787.
So if that should be a new SA or WB is up to discuss. Let’s talk about tech – a new composite wing is a must. As there is no existing modern aisle available, it must be designed. AL or composite?
2-3-2 with the efficiency issue of having another aisle for just +1 seat compared to a SA? Or 2-4-2 which is basically a redesign of the A300/A330 ?
What engines to use? How about cargo?
Does Boeing have the finances to do this? How do they avoid a counter strike from Airbus?
As soon as Boeing makes a design freeze, they can upgrade their A321neo with a new or modified wing, stretch it a bit and pull out an A321neo plus and an A322.
Or, as the A330neo isn’t selling that well, go all in on a MOM + B789 counter.
They already have the A359 up against the B78T, so why not take the RR ultrafan and develop a new mid-sized twin for both mid-length routes and long haul?
Airbus is very comfortable waiting for Boeings’ moves and just develop their existing portfolio.
I don’t see Boeing going for it, they don’t have the tech.
“Any modern SA is torture for flights above 4h in actual configs, you can’t cramp 220 Pax in an A321neo and fly it for 6h.”
What if your seat is 19 inch wide, you have two armrests and a 32inch pitch, decent recline, soft cushions, great IFE, WIFI, a generous aisle, rich catering spacy lavatories and luggage bins in your narrowbody. Don’t automatically reference 757 comfort levels..
https://lh3.googleusercontent.com/-54a7gfJxrBY/WVt-gM3kSAI/AAAAAAAABKo/xa3p1KUx90Iq-3uFkEwWTPyCJwH19zpQQCLcBGAs/s1600/A370-900%2BAirbus%2BMoM%2BNMA%2Bkeesje.jpg
Ever done a big widebody 777-300ER 10 abreast for 10 hours? 🙁
I’ve been avoiding that for years. It’s about personal space, not WB vs NB, or aircraft type.