Boeing’s apparent shifting product strategy

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By Scott Hamilton

Introduction

Aug. 2, 2021, © Leeham News: Boeing last week reiterated it believes the 777-9 will be certified and delivered in late 2023. CEO David Calhoun also said, “I’m confident that might be the next of our programs.”

Let’s set aside for the moment whether the EIS prediction becomes reality and assume Boeing will be correct. Let’s assume the 777-XF will be the next program launched. The larger question then becomes, what does this mean for the Next Boeing Airplane (NBA)? And what are the implications for Airbus?

Summary
  • The NBA launch seems unlikely in 2022; 2023 may be the target.
  • But with the 777-XF moving up in priorities, will the NBA continue to slide to the right?
  • What is the Airbus response to an NBA?
  • Or, should Airbus move first to further preempt the NBA?

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Pontifications: The reshaped commercial aviation sector

By Scott Hamilton

July 12, 2021, © Leeham News: With Washington State and the US open for business following nearly 18 months of COVID-pandemic shut-down, there is a lot of optimism in commercial aviation.

In the US, airline passenger traffic headcounts are matching or exceeding pre-pandemic TSA screening numbers. Airlines are placing orders with Airbus, Boeing and even Embraer in slowly increasing frequency.

The supply chain to these three OEMs looks forward to a return to previous production rates.

It’s great to see and even feel this optimism. But the recovery will nevertheless be a slow if steady incline.

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The conundrum of a new airplane design vs a derivative

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By Scott Hamilton

Introduction

April 19, 2020, © Leeham News: When it comes to a decision by an aircraft manufacturer whether to develop an entirely new airplane or a derivative, these multi-billion dollar decisions involve hundreds of thousands of considerations.

Airbus missed with its first A350 design, but has a winner with the A350 XWB. Source: Airbus.

Sometimes derivatives will do the job. Sometimes a new airplane is the better choice.

Given that Boeing faces a decision whether to launch the Next Boeing Airplane (NBA) and Airbus must decide how to respond, all within the next few years, looking at the considerations and some history is timely.

Today’s examination is going to focus at the 40,000 ft level. We’re not going to delve down into the decisions over suppliers or the minutiae into production. Rather, we’re going to look at general strategy.

Summary
  • Airbus wins big gamble with A320neo decision.
  • Boeing was victor with 787, while Airbus missed with first A350 design.
  • Boeing missed with 747-8I and, it appears so far, with 777X.
  • Next airplane decision by Boeing will drive Airbus response. Read more

Aviation Writers Bloc: Calhoun’s Countdown

April 15, 2021, © Leeham News: Boeing CEO David Calhoun turns 64 on April 18. This means he is in his final year on Boeing’s Board of Directors and as an employee, unless the Board extends his contract beyond the mandatory retirement age of 65.

In a new feature, the Aviation Writers Bloc, LNA’s panel discusses Calhoun’s legacy, whether he’ll launch a new airplane program and whether Boeing Commercial Airplanes will remain headquartered in Puget Sound.

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Analyzing the trades between a single- and twin-aisle NMA

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By the Leeham News Team

Introduction

April 8, 2021, © Leeham News: Some people believe Boeing should launch a new single-aisle airplane about the size of the 757-200/300 to compete with the Airbus 321neo.

Others believe the new airplane should be a twin-aisle aircraft. A few, including LNA, believe the new airplane must be a three-member family and must be a twin-aisle.

The largest member of a single-aisle Boeing NMA would be longer than the Boeing 757-300. Photo: Delta Air Lines.

Whatever the new airplane is, the general specifications are aircraft up to 250 passengers in two classes and a range of up to 5,000nm.

There is also agreement the airplane must start across from the A321neo. Configurations vary widely, but 190-200 seats in two classes are common.

Boeing CEO David Calhoun said on an earnings call that the next new airplane will compete with the A321 and cover the Middle of the Market.

Summary
  • A single-aisle, 250-passenger airplane would be longer than the 757-300.
  • Technical build challenges, while not insurmountable, exist with long, thin airplane.
  • Gate and ramp space constraints accompany a long airplane.
  • Other trades exist for a twin-aisle design.

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Differentiation in the marketplace and the time for the open rotor

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By the Leeham News Team

Introduction

Feb. 22, 2021, © Leeham News: Airliners are now so efficient, one challenge facing Airbus and Boeing in competing is overcoming the laws of diminishing returns.

The time may finally have come for an Open Rotor airliner. Source: Safran.

LNA described this challenge Feb. 8. Additionally, airport infrastructure erects a vast number of design roadblocks.

We focused on the creation of the 737 replacement and how difficult it will be to make meaningful performance upgrades to the economics of the vehicle. We outlined the next battle in product differentiation most likely will occur in optimizing non-flying time operations, focusing on ground operations as the next efficiency battleground. Since then, it was reported that Boeing indicated that a new aircraft sized between the 737 and the 767/NMA was a front runner in their future planning.

Summary
  • NMA Lite needed for 737-9/10 to 787-8 sector.
  • Replacement for 737-7 and 737-8 best suited for Open Rotor design.
  • What an Open Rotor plane might look like

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Pontifications: Boeing’s right direction, but don’t get ahead of reality

By Scott Hamilton

Feb. 8, 2021, © Leeham News: Boeing appears to be heading in the right direction: launch a new airplane program to take care of its 737 MAX product weakness. And do something different by pursuing the “NMA Lite” concept: a twin-aisle, three-member family starting at ~185 seats through ~250 seat and up to 5,000nm in range.

But don’t get ahead of ourselves on the NMA Lite. There are a lot of Ts to cross and i’s to dot.

And anything can change between now and a concerted effort to survey customers, prepare the supply chain and ask the Boeing Board for Authority to Offer the NMA Lite for sale.

Importantly, a three member family dramatically expands the potential market. Publicly, Boeing said the market for the NMA is about 4,000. Internally, officials knew it was more like 2,100—with Airbus capturing perhaps half.

With a third member, demand increases by roughly 7,000.

It’s tough to make a business case for 1,050 airplanes. It’s much easier for 4,550.

Still, this is the best news I’ve seen come out of Boeing in years. Even pre-dating the MAX ground. And pre-dating the COVID pandemic.

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The world of diminishing returns: challenges Boeing faces

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By the Leeham News Team

Introduction

Feb. 8, 2021, © Leeham News: Boeing faces a dilemma of Solomonic proportion.

Which direction should it extend its product offerings?

With the suspension a year ago of the New Midmarket Airplane (NMA) project by incoming CEO David Calhoun, Boeing’s future airplane strategy was upended.

Some Internet pundits said Boeing needed a clean-sheet replacement for the 737. Others said it needs to be a 757/NMA sized vehicle.

Last week, Aviation Week reported Boeing appears to now be headed in the direction of a three-member “NMA Lite” family. LNA outlined this approach last June. Feb. 3’s LNA post has more detail.

While Boeing faces near-term decisions, the challenges go well beyond launching a new airplane and the new engines required to power it.

Summary
  • Advances of diminishing returns.
  • Staying within the ICAO box.
  • Taking the fight to the ground.

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Finally, Boeing moves in the right direction

By Scott Hamilton

Feb. 3, 2021, © Leeham News: At long last, Boeing seems to be moving in the right direction on its next new airplane.

Aviation Week reported this week Boeing appears to be developing a third member of the New Midmarket Airplane (NMA), dubbed the NMA-5X. The NMA-5X is sized directly across from the Airbus A321neo family. It’s the third member of the NMA family that was missing throughout Boeing’s struggles to form a business model for the NMA.

A three-member NMA Lite family is needed for Boeing. Clockwise, they are the NMA-5, the NMA-6 and the NMA-7. Source: Leeham News.

The current concept is also what Boeing wanted to do in 2011 when Airbus forced its hand with the huge American Airlines order for the A319/321ceo/neo. Boeing launched the 737 MAX instead.

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Pontifications: Unraveling the numbers

By Scott Hamilton

Feb. 1, 2021, © Leeham News: Understanding the real market demand for an airplane sector is a complicated thing.

What Airbus and Boeing say the market is for an airplane sometimes is a matter of what they don’t say.

On the Jan. 27 earnings call, Boeing set the program accounting for the 777X at 350 airplanes. This number declined from 400. Simultaneously, Boeing took a whopping $6.5bn forward loss on the program. (Not all is attributed to the accounting block.)

Later in the same call, CEO David Calhoun said, “Across the total widebody market of more than 8,000 projected deliveries over the next two decades, we see replacement demand for over 1,500 large widebody airplanes which are well suited for the 777X.”

Some interpreted this to mean that Boeing expects to sell 1,500 777Xs.

Well, not really.

So, let’s unravel these numbers and what “market demand” or “replacement demand” means. Everything discussed below applies equally to Airbus or Boeing.

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