How useful is an NMA, Part 2

By Bjorn Fehrm

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Introduction

October 18, 2018, © Leeham News.: Last week we started an article series which analyzes how useful a Boeing NMA will be for medium to long-haul flights in different markets.

We first went through all the factors which will change the OEM’s nominal range to an operational range. Now we fly the NMA in one of its main markets and look how it fairs.

Artists impression of the Boeing NMA. Source: The Air Current.

Summary:

  • The NMA is designed to compete on operational economics with Single Aisle aircraft, yet offer the comfort and turn-around times of a Twin Aisle.
  • To get to Single Aisle economics, the NMA can’t be too much aircraft. This shows when analyzing how NMA fares on trans-Atlantic routes.

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Boeing expected to lay out new contract terms for suppliers

By Dan Catchpole

Danieljcatchpole[at]gmail[dot]com

Oct. 16, 2018, © Leeham News: Puget Sound-area Boeing suppliers are anxiously awaiting an Oct. 30th meeting at the Lynnwood Convention Center. The aerospace giant has invited dozens of suppliers to the meeting.

Attendees have been required to sign non-disclosure forms in advance, though Boeing has been tight-lipped about what exactly it plans to discuss with them. Each company has been limited to sending only two representatives, according to several suppliers attending the meeting.

“It doesn’t matter if you’re a machine shop or a big (tier one supplier), you can only send two people,” said an executive at a Puget Sound-area supplier. The supplier spoke on condition of not being named for fear of losing business with Boeing.

Boeing has indicated that the conference is to discuss sweeping changes to how the terms and structure of its supply chain contracts. But it has revealed few details, according to executives at two suppliers.

“You know it’s bad if they won’t tell you what it’s about,” one of the executives said.

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Pontifications: “We will develop and actionable plan to develop supply chain”

By Scott Hamilton

Oct. 15, 2018, © Leeham News: “With your help, we will develop actionable plans to develop the supply chain.”

This was the leading message from the 5th Annual South Carolina Aerospace Conference and Expo, held Tuesday and Wednesday last week in Columbia (SC).

Conference officials also said they are “exploring a national aerospace coalition.”

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Second Annual Southeast Aerospace & Defence Conference

Organized by Leeham Co. and Airfinance Journal

April 14-16, 2019

Francis Marion Hotel

Charleston, SC

The South Carolina Council on Competitive/SC Aerospace already have a Letter of Intent with Washington State’s Aerospace Futures Alliance “for the purpose of advancing the aerospace industry across the US. The LOI will serve as the platform for exploring the creation of a national aerospace Coalition (Coalition) with the objective of strengthening and growing commercial aviation, space, and unmanned aerial systems in the US through a variety of activities.”

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How useful is an NMA?

By Bjorn Fehrm

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Introduction

October 11, 2018, © Leeham News.: The Boeing NMA is by now reasonably well defined. The passenger capacity is set at 225 seats for the smaller version and 265 seats for the larger. The nominal range is 5,000nm for the smaller version and 4,750nm for the larger NMA.

This is all nominal data. In practice, there will be different operational realities which will decrease these figures. How much and how useful will the final operational NMA be? What will be the economic advantage over the direct competition?

Artists impression of the Boeing NMA. Source: The Air Current.

To find out, we will pit the NMA against its direct competition in a series of articles.

Summary:

  • The NMA as defined is configured according to Boeing’s STANDARD rule set. Using these rules, the smaller variant is classified as a 225 seat airliner with a range of 5,000nm. The larger as a 265 seat aircraft with a 4,500nm range.
  • In practice, operational realities and cabins changes compared with the ones used in the STANDARD ruleset will decrease the seating capacity of the aircraft and its range. How much and why is discussed in this, the first article in the series.

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Boeing’s transition in supply chain management aims to save hundreds of millions of dollars

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Introduction

Oct. 8, 2018, © Leeham News: As Boeing moves toward more automation, digital twins and 3D printing to streamline manufacturing and reduce costs, behind the scenes another major initiative has been underway for more than a year.

It’s the shift from its decades-old Enterprise Resource Planning system to a new, expanded one called Systems Applications Projects.

ERP manages parts and inventory. SAP is an evolution of ERP, important as Boeing plans to up production of the 737 and 787 and nears a decision whether to launch the New Midmarket Aircraft (NMA).

The transition is complex and will take years to fully accomplish.

Synergizing scores of old processes covering a billion parts, requiring meticulous data entry, is a daunting task. In fact, after running into problems in June, Boeing Commercial Airplanes’ transition has been delayed, reports the aerospace analyst for Cowen & Co.

A glitch in the system can have ramifications that interrupt production and create traveled work that can delay airplane deliveries to customers.

A system that works as it should streamlines delivery of parts and reduces costs for Boeing—and, theoretically, also its suppliers.

It’s a delicate balance where one misidentified entry into the computer can create problems.

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Pontifications: Amazon’s quiet plans to grow its airline

By Scott Hamilton

Oct. 8, 2018, © Leeham News: Amazon, the giant on-line retailer, continues to move quietly to expand its Amazon Air cargo carrier, with plans to grow the airline to a size that could rival FedEx, market sources tell LNC.

Amazon’s contracting with Atlas Air, ATSG and others for Boeing 767F services is well known.

So are plans for a $1.5bn cargo center at the Cincinnati (OH) airport (which is really across the state line in Kentucky). This expansion will support more than 100 airplanes. Operations are targeted to begin in 2020.

Prime operates about 40 through its airline partners and is in the market for 10 more, LNC is told.

But this is just the tip of the iceberg. Read more

Huge surge of A320 orders greatly exceed near-, mid-term A320 retirements

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Introduction

Oct. 4, 2018, © Leeham News: The huge surge of orders for the Airbus A320 family far outstrips the aging aircraft statistics, an analysis shows.

Airbus has a backlog of more than 6,000 A320 family members, with more than 1,700 sales potential just for retirements.

There is a backlog of more than 6,000 A320neo family members, with the near- and mid-term delivery schedule far exceeding A320 retirements. Photo credit: Airbus.

There are more than 4,300 A320s scheduled for delivery from 2019 through 2025.

There are just 765 A320s that hit 25 years old during the same period.

The surge in A320-family aging aircraft begins in 2030, just as the bulk of the current backlog ends, according to data bases maintained by Ascend and Airfinance Journal’s Fleet Tracker.

Summary
  • Useful lives of A320s in passenger service historically have been 25 years. Till now, no P2F programs existed to extend the useful lives.
  • But, some passenger airlines are returning A320s off lease in 12 years or less—accounting for some of the surge in orders vs aging aircraft.
  • Supply-demand imbalance in the secondary markets could emerge.

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Pontifications: “Enterprise P&L” key to NMA business case

By Scott Hamilton

Oct. 4, 2018, © Leeham News: A consensus appears to have developed among aerospace analysts that the business model for the prospective Boeing New Midmarket Aircraft is about much more than the profit-and-loss case for a stand-alone airplane program.

It’s something that Boeing CEO Dennis Muilenburg has alluded to many times on earnings calls and elsewhere.

But now, as Boeing moves toward a decision to launch the NMA program next year, the business model has fundamentally become defined.

Note that I say, “toward a decision,” not “if the program will be launched.” I’m convinced Boeing will greenlight the NMA.

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Suppliers are paying more, waiting longer for aluminum and other materials

By Dan Catchpole

 danieljcatchpole(at)gmail(dot)com

An infographic highlights the role of aluminum in commercial aircraft production. (Image via Google Images)

Oct. 3, 2018, © Leeham News: United States-based aerospace suppliers say lead times and prices have significantly increased for aluminum, steel and other high-grade materials used to make commercial and military aircraft. But, they say, they have taken the increases in stride.

Aerospace suppliers based outside the U.S. generally have been less affected by the increases in lead times and prices for high-grade aluminum and steel, which President Donald Trump slapped tariffs on in March.

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Pontifications: Workforce plan for NMA to be announced soon

By Scott Hamilton

Oct. 1, 2018, © Leeham Co.: The Choose Washington NMA task force said last week it will release this month recommendations for improving aerospace workforce activities in Washington.

It’s about time.

The task force was appointed by Gov. Jay Inslee to come up with a plan to persuade Boeing to choose Washington as the assembly site for its prospective New Midmarket Airplane, the NMA.

Two studies, one by the Teal Group and the other by Price Waterhouse Cooper, conclude Washington is the best aerospace cluster and location to build the NMA. The conclusions are unsurprising, given the maturity, size and scope of the cluster in Puget Sound (the greater Seattle area). No other place in the country has this level of aerospace activity.

But the reports failed to adequately address the top priority that Boeing has: the need for skilled workers and engineers.

At long last, the NMA council is getting there.

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