Dominic Gates of The Seattle Times has this story in which he has the following observation:
Wyse revealed that Boeing, through structural efficiencies, has also beefed up the allowed maximum take-off weights for the three MAX variants.
Each is 5,000 to 7,000 lbs heavier than the maximum take-off weights of the current 737s.
That means each 737 MAX model, even though heavier than the corresponding current model of the 737NG, can either carry a heavier payload or carry more fuel and so fly farther.
This is good. But we’re hearing from airlines that runway performance may be worse than the 737NG. The airplane is heavier but the wing is the same and the engine thrust is still somewhat of a mystery. CFM International, maker of the LEAP-1B that will power the MAX, lists thrust on its website of 20,000-28,000 lbs without identifying the sub-types and thrust to which the engines will be applied.
These thrust ratings are similar to those now on the NG, rather than being increased to compensate for the increased weight.
One airline tells us that runway performance for the -8 MAX and -9 MAX is longer than the -800 and -900. (The airline is not considering the -7 MAX and doesn’t have the -700.) This, the airline tells us, makes the airplanes problematic at some airports it serves.
This illustrates the dilemma Boeing and CFM have with the physically-constrained 737. CFM could build any engine it wants that would get the job done. It has, after all, two LEAP engines in development for the COMAC C919 and the Airbus A320neo. But the 737 presents special challenges and CFM is constrained unless Boeing lifts the entire airplane with new main gear. But this would mean a new wing box and associated structural changes, adding significantly to the cost. And Boeing won’t to this.
There’s still a lot about MAX we don’t know. And many customers are also waiting for the information.
Price vs Price: More on the price war between Airbus and Boeing in the A320 v 737 contest. Dominic Gates of The Seattle Times has this analysis of hot contest to win an order from India’s Jet Airways, hitherto an exclusive Boeing customer. He takes a larger look at the troubled Indian airline industry.
Finalizing Orders: Norwegian Air Shuttle finalized its order for 100 Airbus A320neos, breaking Boeing’s monopoly here. NAS was also a launch customer of the 737 MAX.
China threat: Maybe, maybe not. Jim Albaugh, CEO of Boeing Commercial Airplanes, cites China as the biggest emerging threat to Boeing and Airbus. Reuters, in Beijing for the IATA AGM, has this article saying, not so fast. The article takes a close look at the ARJ-21, China’s first effort at a modern jet. Although this is a regional jet and not competitive with Airbus or Boeing, it’s a “makee-learn” effort that leads the way to the Comac C919, which is directly competitive with the A320 and 737 class. Implications of the ARJ-21 are also discussed in the article.
LionAir and the 787: Confirming news reports this week, LionAir announced it has committed to the Boeing 787, agreeing to buy five. We’re told these are from the so-called “terrible teens,” those early 787s that required an enormous amount of rework and which were rejected by the original customers. Transaero and Rwanda Air are said to also be taking some of these early aircraft.
EADS Bank: More information on the reports EADS is considering getting a banking license.
Boeing economics and the 787: Jon Ostrower at The Wall Street Journal has an excellent piece today talking about the milestone of 787 #66 and the implications for cost reduction. Unfortunately, the full article is available only for paid subscribers. Contained within the article is this key data:
The losses don’t show up on Boeing’s bottom line, because accounting rules let the company spread the Dreamliner’s costs over years—effectively booking earnings now from future Dreamliners that it expects to produce more profitably. With previous models, Boeing initially spread its costs over 400 planes, but with the Dreamliner it is distributing the costs over 1,100 planes—a number it says reflects unprecedented demand. Boeing already has 854 Dreamliner orders from 57 customers.
Boeing reported that first-quarter profit at its Commercial Airplanes division more than doubled to $1.08 billion from a year earlier. But the company acknowledges that accounting for the costs of each individual plane would have resulted in a first-quarter loss of $138 million—a drop UBS analyst David Strauss says is almost entirely attributable to the Dreamliner.
The Dreamliner’s drain on cash is balanced by strong sales of the profitable single-aisle 737 and long-range 777 models. And analysts estimate Boeing is reducing the losses per Dreamliner by about $10 million each quarter. But maintaining the pace of cost reduction gets harder as the simplest problems are solved. Meanwhile, Boeing aims to increase production of Dreamliners to 10 per month at the end of 2013, up from 3.5 per month today—meaning the losses per plane will be magnified, but will also be tempered by the decreasing cost of each jet.
Some analysts believe Boeing’s target for cost reduction on the Dreamliner could be too optimistic. Mr. Strauss of UBS says the company appears to be assuming it can reduce its cost 50% faster than it did with the 777. If instead the pace of cost reduction matches the 777, says one of UBS’s models, the estimated $20 billion hole could double.
We’ve been at the Airbus Innovation Days in Toulouse, with about 200 others from around the globe. Here are some highlights:
A380 wing rib issues: As reported previously in various media, Tom Williams, EVP-programs, outlined the issues with the wing rib cracks. A new metal alloy was used, intended to save weight, that cracked in operations despite fatigue testing failing to discover the issue on a test airplane. Williams attributed the failure to detect the cracks to inadequate instrumentation on the test plane. The new alloy saved about 300kg. There are 60 L-brackets out of 4,000 that require inspection and only 20 are affected. The issue does not affect flight safety and the ribs can be replaced either during a C Check or during a nose-to-tail maintenance check. The “Type 2” cracks, the most serious of two types found, have to be replaced by 1,300 cycles.
A350-800/1000 sales: Boeing has been aggressively casting doubts on these two sub-types, pointing out that there have been no sales since 2008. John Leahy, COO Customers, said there haven’t been sales because he doesn’t have any delivery slots available until the end of the decade. He’s been switching some customers from the 800 to the 900, which is more profitable to Airbus. Where did he get the slots? He won’t say but in a press gaggle after his presentation, he acknowledged to an Indian journalist that Kingfisher Airlines—an A350, A320 and A380 customer—deferred all its deliveries to relieve the need for pre-delivery payments. We asked Leahy if he was re-selling the Kingfisher slots and he demurred, saying that was “confidential.”
(We note that Boeing had a long dry spell in sales of the 787 during the depths of the problems with the airplane and the backlog stretching to late this decade.)
Leahy also said Boeing’s claims that he, Leahy, doesn’t know what the -1000 “is” are false.
A320 v 737: If the war of words over the A350 wasn’t enough, Leahy—and to a lesser extent, Williams, whose focus was principally the A380—repeated the Airbus messaging begun last November at the Credit Suisse conference in New York that fan size does matter and the 737 MAX comes up short. Airbus figures the MAX at best (pre-dating the recent Boeing changes) will gain 8% over the 737NG. We asked Leahy later about the move by Boeing to take the CFM LEAP-1B fan size to 69.4 inches and to add the “Boeing Advanced Technology Winglets” (BATW) to the MAX. Boeing now claims the MAX will be a 13% improvement over the NG. Leahy, who compared the BATW with the MD-11 winglets, said Boeing will get only about one-half percent improvement from this. The 69.4 inch fan still falls short, he said.
Williams, a former engine engineer, said the hotter temperatures and ceramics technology required of the LEAP-1B, will present maintenance challenges.