737NG vs A320neo: an interesting chess game

Update, Dec. 13: FlightGlobal has this interview with Ryanair and its critique of the NEO.

Original Post:

The (London) Financial Times has this interview with Boeing Commercial Airplanes CEO Jim Albaugh in which he says there is no compelling reason now to re-engine the 737.

Boeing believes the newly announced Airbus A320neo family merely brings the legacy A320 family to parity with the 737 or at most provides only a 3%-4% direct operating cost advantage to the NEO which can be matched by yet more refinements to the 737.

Airbus refutes Boeing’s conclusions but won’t release its own numbers, regarding them as proprietary. But in a new study, The Business Case for the Bombardier CSeries, by AirInsight,  with which we are affiliated, AirInsight’s independent analysis concludes the NEO generally has at best a slight advantage over the 737-700 and 737-800–but nothing to shout about.

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Lessors, banks in blistering critique of Airbus NEO

Our colleagues at Commercial Aviation Online put together the story below on lessor and banker reaction to the Airbus A320neo announcement December 1.

We knew–and previously referenced here–reluctance on the part of these groups to the NEO concept, but even we were stunned by the blistering response toward Airbus.

This is reprinted with permission.

Lessor and banks react to Airbus neo programme

Date: 06/12/2010 11:35
Source: Commercial Aviation Online
Location: London

The launch of the Airbus neo programme on 1 December with plans for a 2016 entry into service for the initial model has generated a lot of talk in the aviation finance community, particularly concerning the impact on residual values.

CAO spoke to lessors and bankers about the move and here’s what they had to say:

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Airbus NEO won’t kill CSeries: New study

Airbus’ A320 NEO won’t kill the Bombardier CSeries, a new study concludes, issued today by AirInsight.

The study, “The Business Case for the Bombardier CSeries,” which we co-authored, is discussed on the AirInsight blog.

The study began as an update to AirInsight’s report in December 2009 on the prospect of re-engining the Airbus A320 and Boeing 737 families. As Airbus COO-Customers John Leahy repeatedly asserted that to re-engine the A320 would kill the business case for the CSeries, AirInsight broadened its update into a full, in-depth study. AirInsight concluded that the business case for the CSeries is sound.

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A320neo EIS 2016-17

Airbus has confirmed to us the planned EIS of the A320neo family. The company initially announced only that the A320neo would enter service in the Spring of 2016. A spokesman confirmed our estimates of the family’s EIS:

A320 EIS: Spring 2016

A321 EIS: 4Q2016

A319 EIS: Spring 2017

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Expectations for the Zhuhai Air Show: C919 yes, CSeries No

The Zhuhai Air Show in China is Nov. 16-21 and there are a number of expectations for it.

First is the expectation in the West that Bombardier will announce the long-awaited Chinese order for the CSeries from China Development Bank (CDB), which earlier this year pledged more than $3bn in airline financing to Bombardier for the Q400, CRJ and CSeries. The Chinese order had widely been expected at the Farnborough Air Show and when it didn’t appear, Bombardier took a huge PR hit and disappointed aerospace analysts.

In fact, we predicted a full week before the Air Show that no CSeries orders would be announced there. We’re going to go out on a limb and predict there won’t be any announced at the Zhuhai show, either.

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Boeing skeptical of CSeries, C919, MS-21 EIS

We wrote the following article for Commercial Aviation Online, which appeared yesterday. In case anyone wonders, there is no relation between John Hamilton and us.

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The chief engineer of the 737 program is skeptical of the emerging competitors’ airplanes and the announced entry-into-service (EIS) dates, and this has a clear influence on what Boeing will do to enhance, re-engine or replace the 737 in the coming years.

John Hamilton, in a media briefing on the roll-out 26 October of the 737’s Boeing Sky Interior and a refresher course on the technical enhancements that will be in place next year, said Bombardier is facing new technologies it hasn’t worked with before that places in doubt the promised 2013 EIS of the 110-130 seat CS100. This is a potential replacement for the Boeing 737-500 Classic and the 737-600 Next Generation aircraft.

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Boeing’s 737 ramp up shows confidence in economy, ‘skyline’ and the unions

The announcement last week that Boeing once again is planning to ramp up production of its venerable 737 line show confidence on a number of levels:

  • The global economy continues to recover;
  • The strength of the backlog, aka “skyline,’ is strong;
  • The efficiency of the Lean production line only gets better; and
  • The confidence in the labor unions (notably IAM 751) appears to be gaining strength compared with the depths of anger following the 2008 57-day strike and the October 2009 decision to put the second assembly line for the 787 in Charleston (SC).

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737 production rate hike, PW’s GTF, Airbus’ A320 NEO

We talk about the prospect of a production rate hike at AirInsight this morning.

  • Here’s a story from Flight Global taking a detailed, focused look at the Pratt & Whitney P1000G Geared Turbo Fan, which will power the Bombardier CSeries, Irkut MC-21 and Mitsubishi MRJ; and will likely be chosen by Airbus to power the A320 family New Engine Option.
  • Speaking of the A320 NEO, look for an announcement on September 30 or shortly thereafter giving the green light for this program.
  • Embraer is also considering whether to reengine its E-Jet series with the GTF.
  • Flight International has  this detailed report on the Bombardier CSeries to be the first airplane to have telemetry for the black box flight data recorder.

AirInsight on 787, 747-8 delays; A321 NEO

AirInsight has several commentaries about the news last week of new delays in the Boeing 787 and 747-8 programs; and a discussion about the prospective A321 New Engine Option. The main site is here.

PW’s GTF, Boeing’s culture, China’s C919 and ARJ21, CSeries

Jon Ostrower of FlightGlobal has this piece about the “bolt-on” of Pratt & Whitney’s P1524G PurePower Geared Turbo Fan. The PurePower, also known as the Geared Turbo Fan, is the engine designed for Bombardier’s CSeries, with larger versions anticipated for development to re-engine the Airbus A320 family and potentially for application to the replacement airplane for the Boeing 737.

PW’s PurePower website is here.

Airbus said at the Farnborough Air Show that it has made the business case to re-engine the family, and it will conclude the study by the end of September whether engineering resources will be freed up to proceed with the project. We believe Airbus will green-light the program, with an announcement at the end of next month or in October.

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