Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
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Delta 737-900 order bypasses re-engine
Here is a story we did for Commercial Aviation Online:
| Date: | 26/08/2011 13:37 |
| Source: | Commercial Aviation Online |
| Location: | Seattle |
| By: | Scott Hamilton |
Delta Air Lines’ order for 100 Boeing 737-900ERs is a major boost to this model, but does nothing to add to the 737 re-engine programme.
The airline’s original request for proposals, issued early this year, came well before Boeing decided to go forward with the 737 re-engine and accordingly, the airplane was not included in any proposal from Boeing to Delta or in any analysis after American Airlines placed the launch order in July.
While there had been some expectation among Wall Street analysts that Delta would at the least have conversion rights in the contract to allow some deliveries in the 2017-2018 period of the 737 re-engine, CAO has confirmed with two sources that there is no provision. Delta would be taking too few airplanes in this period to be allocated valuable launch customer/launch operator delivery slots, according to one person familiar with the situation. Although American provisionally ordered 100 737REs, it does not want to be the launch operator and has slated first deliveries in 2018.
Boeing’s next five weeks
The next five weeks should be pretty exciting for Boeing–and significant.
Last week, the company received certification of the 747-8F from the FAA.
Before the end of the month, the Board of Directors is to receive from Boeing Commercial Aircraft the details of the 737 re-engine program (we sure hope marketing comes up with something better than “NE737”)**; we actually have learned the date of the BOD meeting, but will honor Boeing’s policy of not revealing the date). At this meeting, Authority to Offer the 737RE is expected, with details of just what the airplane is to follow to customers and the public (not sure of the timing).
At that point, we’ll be able to see just how well the 737RE stacks up against the A320neo and how creative Boeing’s engineers have been in taking a 1960s-generation airframe and bringing it forward to the 21st Century.
Name that plane-the 737 re-engine
With Steve Wilhelm of the Puget Sound Business Journal getting a scoop that Boeing is naming the re-engined 737 the NE737, which we were underwhelmed by, and the conversation in the Internet and analyst community about the name, we thought we’d run a Name that Plane contest. It worked for the 7E7; why not for the 737 re-engine?
Even though this is a “contest,” there is no prize.
Here’s what’s out there so far:
Talk of 60 737s a month unjustified, says analyst
Note: According to the Puget Sound Business Journal, the new name for the 737RE is the NE737 (presumably for NewEngine). Dunno about you, but we are underwhelmed.
Note 2: On another topic, Boeing got certification of the 747-8. Delivery is expected next month.
Here is a piece we did this week for Commercial Aviation Online:
| Date: | 18/08/2011 10:30 |
| Source: | Commercial Aviation Online |
| Location: | Seattle |
| By: | Scott Hamilton |
Studies by Boeing to increase production of the 737 to as high as 60 a month cannot be justified by demand through 2020, or even 2030, according to a new analyst report by Wedbush, a Los Angeles-based investment bank.
In a 16 August research note, Wedbush’s aerospace analyst Kenneth Herbert believes a rate of 50 per month can be supported by 2015 through 2020, but that global demand and competition from new entrants in the 100-200-seat market means Boeing and Airbus can only justify this rate for the 737 and A320 families.
Wedbush also predicts that Boeing will keep production of the 737 re-engine at Renton (WA). Boeing’s CEO, Jim McNerney, said on the manufacturer’s second quarter earnings call that Renton was not the automatic choice for assembling the 737 re-engine and that other options would be considered. Boeing commercial airplanes CEO Jim Albaugh said separately that it will be six-eight months before a decision on the assembly site will be made.
Flightblogger on 737RE, Aeroturbopower on A320 v 737-800
Two very interesting posts came up today.
The first is from Aeroturbopower, a blog that concentrates on engines and engine-related stuff. In today’s post, Aeroturbopower has a very interesting analysis on fuel burn on the Airbus A320 vs the Boeing 737-800. The results may surprise you, given the very effective messaging campaign by Boeing and the equally poor messaging campaign by Airbus.
The second posting, by Fightblogger, confirms what we wrote about a week ago: that Boeing and CFM are close to choosing the 66 inch fan for the 737RE. Flightblogger has more detail than we did and provides a good overview of what the 737RE will likely be.
Qantas, Transaero buy Airbus; Hazy cool to 737RE
AirInsight just posted three pieces about aircraft developments. One concerns the big order from Qantas for A320/A320neos, another is about the Transaero deal for the A320neo and the third is our report referenced in the 777 post below about Steve Hazy’s cool view toward the 737RE.
Boeing continues to work on design definition of the 737RE, with plans to send the program to the Board of Directors this month for approval to launch the airplane.
Assessing the 777 upgrade
The “godfather of leasing,” Steven Udvar-Hazy, the CEO of Air Lease Corp., weighed in on the 737RE and the prospective improvements to the 777 during ALC’s earning’s call. And when Hazy speaks, the industry listens.
Hazy, who favored a new airplane in the 737 class, wasn’t too happy about the 737RE decision and thinks Boeing has a ways to go on developing this aircraft. We’ll have more about this in a separate post.
As for the prospective improvements of the 777, Hazy had this to say: