Leeham News and Analysis

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There's more to real news than a news release.

Part 3: Boeing 757 replacement: 757 and Airbus A321neoLR versus clean sheet designs.

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By Bjorn Fehrm

Part 3 of 3

Introduction

In Part 2 of our three-part 757 Replacement analysis, we took a close look at Airbus’ new 97 tonne take-off weight A321neo, revealed in a world exclusive by Leeham logo with Copyright message compactLeeham News and Comment October 21. We analyzed the A321neoLR’s capabilities and limitations when compared to Boeing 757-200W and we saw that it could do the international flights that the 757-200 does with about 25% better efficiency. In this final Part 3, we will now compare the 757 and A321neoLR against what can be Boeing’s reaction, a clean sheet New Single Aisle, NSA, or New Light Twin Aisle, (NLT). First the conclusions from Part 2:

  • When using the United Airlines-configured 757-200W international as benchmark, we came within seven seats of the 757 capacity for an A321neoLR. It covered the same range and had trip fuel costs that were 25% lower.
  • The per seat fuel costs gave a 22% higher efficiency, which was within 2% of Airbus own figures.
  • 737 MAX9 is not suitable for stretch to an international version, not because the wing is not good enough but because the MAX9 cannot bring the wing to an angle at take-off where it can work efficiently; the landing gear is too short.

Summary
For Part 3 we can summarize:

  • A New Single Aisle (NSA) or New Light Twin (NLT) which would enter the market in 2025 would be sized at around 200 passengers with subsequent variants covering the 175-225 seat market, all numbers with OEM standard two-class seating. Figure 1 shows the fuselage cross sections we have used in our modelling of NSA and NLT to cover this market segment.

NSA and NLT cross sections

Figure 1. Fuselage cross sections of our models of NSA and NLT. Source: Leeham Co.

  • In order to cover the market segment of the 737, A320 and 757 it would have a range in excess of 4,100nm. We will use 4100nm for our modeling to maximize the comparative efficiency information.
  • Its efficiency would be higher than an A321neoLR, primarily due to better engines and a more modern wing.
  • The New Light Twin (NLT) wins on comfort and ground turn-around time but pays with a larger fuselage cross section due to the extra aisle. This causes more drag and structural weight, net effect is a reduction in efficiency of around 2.5%.

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 5 Comments

 Posted on October 28, 2014 by

 Airbus, Airlines, Boeing, CFM, China, Comac, CSeries, Embraer, GE Aviation, Irkut, Leeham Co., Leeham News and Comment, Pratt & Whitney, Premium, Rolls-Royce, Uncategorized

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CASM Paradigm: Lower Seat Mile Cost or Higher Yield; Evaluating the GOL competition

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Introduction

As Brazil’s budget airline GOL reportedly evaluates whether to acquire 20 Boeing 737-7s or Embraer E-195 E2s, the principal of the “CASM Paradigm” is a concept worth examining.

Leeham logo with Copyright message compactThis head-to-head evaluation of the E-195 E2 and the 737-7 MAX is a rarity. Typically the head-to-head involves the Bombardier CS300 and the Airbus A319neo. All three have the same seating capacities. The E-195 E2 has slightly fewer passengers than the 737-7 with similar seat pitch.

The competition is also what might be seen as a contrary competition. Airframers agree: the airline industry is upgauging. Capacity discipline, long elusive until after the global financial collapse of 2008, has been driving load factors higher. But lowering unit costs, or the Cost per Available Seat Miles (CASM) has long been the principal measure by which airlines, OEMs and aerospace analysts measure efficiency.

Although Trip Costs of aircraft operating over a route is important, the trend toward upgauging at all levels clearly is the driving force.

It's an age-old debate: the cost per available seat mile (CASM) vs trip cost. CASM typically wins, and the airline industry is migrating toward larger aircraft. Embraer, not surprisingly, thinks this has gone too far. Graphic: Embraer, reprinted with permission.

Figure 1. It’s an age-old debate: the cost per available seat mile (CASM) vs trip cost. CASM typically wins, and the airline industry is migrating toward larger aircraft. Embraer, not surprisingly, thinks this has gone too far. Graphic: Embraer, reprinted with permission. Click on image to enlarge.

Embraer takes a different view, arguing that trip costs and a smaller airplane should trump the CASM obsession. A smaller airplane will mean higher yields, EMB says. A larger airplane provides lower trip costs but drives yield lower.

We visited Embraer’s headquarters earlier this month and received a full briefing on what EMB calls the CASM Paradigm. In our report today, we detail the presentation and discuss other considerations beside CASM vs Trip Costs that drive the size of the aircraft acquired.

Summary

  • The CASM Paradigm becomes a vicious, circular cycle, driving airlines to larger aircraft but lower yields.
  • Extra seats on larger aircraft mean lower unit costs but at the cost of profits.
  • Scope Clauses remain an issue in the US.
  • Connecting traffic, pay scales also are issues.
  • We analyze the operating costs of the E-195 E2 vs the 737-7.
  • We discuss the GOL competition.

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 Posted on October 26, 2014 by

 Airbus, Boeing, Bombardier, CFM, CSeries, Embraer, Leeham News and Comment, Pratt & Whitney, Premium

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Part 2: Boeing 757: Airbus A321neoLR as a replacement on long and thin routes

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By Bjorn Fehrm

Part 2 of 3

Introduction

In Part 2 of our three-part 757 Replacement analysis, we take a close look at Airbus’ new 97 tonnes take off weight A321neo, revealed by Leeham News and Comment October 21. We call the 97t airplane the A321neoLR (Long Range); Airbus has yet to name the aircraft, which it began showing to airlines last week.

Leeham logo with Copyright message compactWe analyze the A321neoLR’s capabilities and limitations when compared to the aircraft it intends to replace, the Boeing 757-200W. We have chosen to do so using a real airline configuration as opposed to an OEM’s typical seating layout. By comparing the 757-200W and the A321neoLR over the route structure that United Airlines is using the 757 today, we can better see the characteristics of the A321neoLR and what operational consequences the differences between the types would mean for the airlines. Before we start, a short recap of Part 1 about the 757 and its replacement candidates. Here is what we found:

  • the seating capacity of the A321 is within 10 seats of the 757-200 in a standard configuration; the 737 MAX9 is trailing with about 20 fewer seats.
  • the myth about the strong engines of the 757 is just that, a myth.
  • the good field performance of the 757 is coming from its wing more than any advantage on the engine side
  • the A321neo and 737 MAX9 were hindered in their capability to replace the 757 for long and thin international routes by characteristics that can be changed. For the A321neo, this may be accomplished with rather modest changes to Max Take Off Weight (MTOW) and tankage. For the 737 MAX9, more elaborate changes to the wing and engines are required, both hard to do.

BA 757-200

Figure 1. Boeing 757-200 of British Airways which launched the 757 together with Eastern Airlines 1983. Source: Wikimedia.

Summary, Part 2

  • We will now look in detail on the changes Airbus is doing on the A321neoLR, what each change brings and any restrictions that remain.
  • We will also detail why we think it will be harder for Boeing to match the A321neoLR with a 737 MAX9 development.
  • We detail prime, present 757W long-thin routes.
  • We present 757W international, A321neoLR and 737 MAX9 “long range” configurations.
  • We provide economic comparisons such as Payload-Range charts and Fuel consumption per trip and per seat diagrams.

In the final Part 3, will look at Boeing’s alternative to an A321neoLR, a clean sheet New Single Aisle (NSA) and a prospective Small Twin Aisle (STA) design and how much such an approach would surpass the A321neoLR on medium and long haul networks and when it could be available.

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 2 Comments

 Posted on October 22, 2014 by

 Airbus, Airlines, American Airlines, Boeing, CFM, Delta Air Lines, GE Aviation, Pratt & Whitney, Premium

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E-Jet, the project that shaped Embraer

By Bjorn Fehrm

Introduction

In a recent visit to Embraer in Brazil we got a thorough brief on the background and decision making around the E-Jet and E-Jet E2 programs. We have written about these programs before but we will now cover how they came about, what was the program objective when the decision was taken and how it panned out. Both programs have had and will have a profound influence not only on Embraer but the whole civil aviation segment between 70-150 seats. It is worth looking into how Embraer, once an also-ran in the regional market, rose to the top three spot in civil aviation after Airbus and Boeing and how EMB intends to stay there.

Summary

  • American Airlines was part of changing history in regional jets, long before in single aisle.
  • E-jet started as a product program and soon put Embraer on a steep learning curve how to support an E-jet in the market above 50 seat regional jets.
  • Embraer today rates their support second only to Boeing and Airbus.
  • The requirements for the mid-life update of their E-jet, the E2, is all about delivering a mature product. This has shaped all aspects of the program, from cooperation with suppliers to how testing and qualification is done.

KLM E-jet

Figure 1. KLM Cityhopper E-jet taking off. Source: KLM

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 Posted on October 20, 2014 by

 Airbus, American Airlines, Boeing, Bombardier, CSeries, Embraer, Embrarer, GE Aviation, Pratt & Whitney

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Mitsubishi rolls out MRJ90

Mitsubishi rolled out its MRJ90 regional jet, the first passenger airliner to be produced in Japan since the YS-11 turbo-prop in 1962.

The MRJ90 challenges the Embraer E-175/190 and E2 and the Bombardier CRJ900. The smaller MRJ70 won’t be developed until after the MRJ90 is well on its way. The MRJ90 faces six months of ground testing before the first flight test. Entry into service is now scheduled for June 2017, some four years late.

The MRJ90 is a 2×2 configuration with 18 inch wide seats and aisle, making it nearly as wide as the E-Jets, which are fractionally wider. The MRJ will have better passenger comfort than the CRJ, a ground-breaking airplane in its day but increasingly outmoded when it comes to passenger comfort.

The Mitsubishi is a clean-sheet design, but Embraer claims its new E-Jet, with a new wing, the same Pratt & Whitney GTF engines, a new fly-by-wire system, a smaller tailplane, and aerodynamic improvements, will nonetheless beat the MRJ’s economics.

Regardless, we believe the MRJ and Embraer will dominate the 70-99 seat market. BBD’s share of this sector continues to decline. The Sukhoi SSJ100, while posting reasonably good orders, is and will remain handicapped by its Russian lineage and overhang of Russian politics. Production and delivery rates haven’t lived up to promises.

Mitsubishi, while discovering that being an airplane integrator is much more difficult than being a supplier (it designed and built the wings for the Boeing 787, which produced challenges in its own right), should in the end produce a solid airplane.

The company has been looking into this long enough. We recall that at least 15 years ago Mitsubishi made the rounds of US regional airlines getting input about what a new airplane might be. At that point, the 50-seat market was still viable. We were retained by a consultant to Mitsubishi to facilitate a meeting with a regional airline–so we know how far back this goes, and what Mitsubishi was asking. (We thought at the time Mitsubishi needed to go “up,” rather than do a “me too.”)

Mitsubishi has already talked about an MRJ100, but there are no firm plans.

 8 Comments

 Posted on October 20, 2014 by

 Boeing, Bombardier, Embraer, Mitsubishi, Pratt & Whitney, Sukhoi

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A380neo becoming a reality

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Introduction
We last looked at the Airbus A380 economics in February, when the airframer was promoting the giant airplane as a 525 seater. Since then, Airbus recast the airplane as a 555 seater. This changes the economics somewhat. Further, Airbus is floating an 11-abreast coach configuration vs the out-of-the-box 10 abreast.

Tim Clark, president of Emirates Airlines, continues to press for a re-engined A380. In our companion Assessment of the Very Large Aircraft market, consultant Michel Merluzeau believes Airbus will re-engine the airplane.

So do we.

It has been pretty clear to us that Airbus will do an A380neo. The question is when. Emirates’ Clark last month predicted the decision would be taken within six month. Our latest Market Intelligence says he will be right; we understand that Airbus is right now preparing for an A380neo project.

Summary

We thereby see the time ripe for looking into the A380neo again. When we last covered the subject (Updating the A380: the prospect of a neo version and what’s involved, Feb. 3, 2014) we concluded:

• The present configurations for the A380 of 525 seats fills the A380 to a much lower density than is the norm today.
• A cabin configuration of 555 seats would be a realistic three-class configuration with the economy section on the lower deck still in a spacious 10 abreast with seat width at 19 in.
• The efficiency of the A380 filled to that low density was on par with the best per seat benchmarks in the industry, the Boeing 777-300ER with the economy section in a tight 10- abreast, 17- inch configuration.
• The best in market benchmark would move considerably when the Boeing 777-9X enters service 2020. The per fuel seat cost would then we almost 20% lower than today’s A380.

Today our article shows:

• A re-engined A380neo, with other improvements typical in such an endeavor, reclaims the per-seat advantage for the A380.

When re-running the data in our proprietary model, we have more and better data around the likely engine variant, the Rolls Royce Advance, which was announced by Rolls Royce in March. It will be available for an A380neo rolling off the production line 2020. We have also put in more work into our standardized cabins, adjusting the relationship between premium and economy seating to a ratio closer to the one airlines use today. Airbus has also been active on the A380 cabin side. It has had several studies how to better utilize the cabin space in the A380. The results are now presented to the market.

In a recent A380 update, Airbus showed an 11-abreast main economy cabin with 18 in seats, now without raising the cabin floor to fit the seats. By adjusting how the seats interfaces the cabin’s sloping walls, Airbus avoids changing the floor height in part of the cabin.

We will now use this latest data to check where an A380neo would stand in terms of efficiency against the Boeing 777-9X, its most difficult competitor when it comes to the cost of transporting passenger from A to B. In later articles we will look at a more complete cost picture and also look at the A380’s strong side, the revenue and yield when one can fill the aircraft. Read more

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 Posted on October 19, 2014 by

 Airbus, Boeing, GE Aviation, Pratt & Whitney, Premium, Rolls-Royce

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Part 1–Boeing 757: An analysis of facts and myths

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By Bjorn Fehrm

Part 1 of 3

Introduction

The Boeing 757 was developed in the late 1970s as a replacement for Boeing’s popular 727 mid-range single aisle aircraft. Starting from the smaller 727, it ultimately grew to 180 to 230 seat capacity and US transcontinental range. With initial orders from Eastern Airlines and British Airways, the aircraft nonetheless had poor sales through most of the 1980s, picking up with a surge of orders in 1988-1990 when major deals were announced from American, Delta and United airlines.

Figure 1. Boeing 757-200 of launch customer Eastern Airlines.

Figure 1. Boeing 757-200 of launch customer Eastern Airlines.

 

Following the 1991 Persian Gulf War and recession, orders plunged until the mid-decade with a respectable resurgence. After 9/11, sales dried up and Boeing terminated the program.

Summary

  • The 757 program had slow sales in its first decade, robust sales for a few years then declining sales through most of the 1990s.
  • Sales were respectable in the late 1990s but dried up after 9/11.
  • Boeing efforts to boost sales with the 757-300 were a failure–only 55 were sold. 757F sales were a moderate success.
  • The 757-200 had strong engines for its time (especially the Rolls Royce equipped models), we dissect if this is still true.
  • With the 757 being the only narrow-body with trans-Atlantic range, what is missing from today’s Airbus A321 and Boeing 737 MAX9 to make the cut? What can be done with small changes will be answered in part 2.
  • How will a future clean sheet NSA perform compared to these three? How much of a game-changer will a clean sheet design be if it enters service 2025? We look at the answers in part 3.

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 Posted on October 15, 2014 by

 Airbus, American Airlines, Boeing, CFM, Delta Air Lines, Pratt & Whitney, Premium, Rolls-Royce, US Airways

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“We need more than one family,” says Embraer COO

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Now open to all Readers. (Nov. 29, 2014)

Introduction
Oct. 15, 2014: Embraer had the opportunity to design a clean-sheet airplane as a successor to the E-Jet to respond to the Bombardier CSeries, with the 100-110 seat CS100 a direct competitor to the E-190/195.

But after Airbus and Boeing launched the A320neo and 737 MAX families, including the small A319neo and 737-7 MAX, officials chose the more conservative play to re-engine the E-Jet at an estimated cost of $1.7bn. An entirely new airplane meant up-sizing to be directly competitive with the CS300 and the Baby Airbus and Boeing. This would have been a crowded field that didn’t make sense.

That said, this is an industry that requires long-term planning. Luis Carlos Affonso, SVP of Operations and COO Commercial Aviation, says Embraer needs more than one family of airplanes. The question is, what becomes the next family.

Summary

  • Re-engining the E-Jet was the best bet for Embraer.
  • Strong customer base provides ready market for the E-Jet E2.
  • Another family of airplanes could be a turbo-prop, taking advantage of Bombardier’s weakeness; or
  • Another family would mean up-gauging into the 130-150 seat or higher sector, the traditional domain of Airbus and Boeing.

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 4 Comments

 Posted on October 15, 2014 by

 Airbus, ATR, Boeing, Bombardier, Pratt & Whitney

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Leeham News launches Premium plan, companion to free content; engineer joins staff

Free content.

Leeham News and Comment (LNC) today launched a Premium subscription plan as a companion to free content.

LNC has provided news and commentary since February 2008, providing industry-leading information and insightful analysis, principally focuses on Airbus, Boeing, Bombardier and Embraer but also including emerging challengers to the Big Four OEMs, the leading engine manufacturers, suppliers and airline news.

LNC has been a leading resource of news and comment throughout the commercial aviation industry and its professional followers in the aerospace supply chain, investment analysts and the media.

Since the first of this year, LNC increasingly provided more and more technically-based content. This content is valuable and supplements the industry-leading news and reporting that has been provided since 2008. We are pleased to announce the addition to our staff, Bjorn Fehrm, who focuses on technical evaluation and complements the strategic expertise of Scott Hamilton, the founder of LNC and Leeham Co. consultancy.

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 15 Comments

 Posted on October 14, 2014 by

 Airbus, Airlines, Boeing, Bombardier, CFM, Comac, Embraer, Irkut, Mitsubishi, Pratt & Whitney, Rolls-Royce, Sukhoi

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Embraer’s big bet on its largest airplane yet

Introduction

Embraer is days away from the roll-out of its biggest airplane project yet and one that has the potential to make its biggest inroads yet into the global defense market: the KC-390.

Rendering of KC390 tanking two Embraer AMX fighters. Source: Embraer

Rendering of KC390 tanking two Embraer AMX fighters. Source: Embraer

The airplane, with a fuselage cross-section the size of the Boeing 767, challenges the Lockheed Martin C-130, a venerable aircraft that has been updated throughout the decades since it first entered service in 1956. Despite this modernization, Embraer believes the time has come for a modern design and a multi-mission capability that far surpasses that of the C-130, with higher productivity of a jet aircraft vs a four-engine turbo-prop.

KC-390 3D view with main data. Source: Leeham Co

KC-390 3D view with main data. Source: Leeham Co

Summary

  • Embraer sees a market for 728 KC-390s in 77 countries, excluding the US, Russia, China and Europe.
  • The KC-390 is half the price of the Airbus A400M and about the size of the Lockheed Martin C-130.
  • Launched with paid development and an order for 28 aircraft from Brazil to fulfill the country’s unique requirements.
  • Typical mission capabilities will be: Cargo 7 pallets, Displacement of 80 soldiers, air dropping of 86 paratroopers, transporting 1 Black Hawk helicopter or one LAV25 or 3 Humvees, Rescue missions, Air tanking of 2 aircraft or helicopters.
  • The KC-390 flies at M0.8 and will therefore finish missions in two thirds the time of the C-130 Hercules (which flies as M0.5). This will also result in more missions flown per day i.e. more airlift capacity.

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 38 Comments

 Posted on October 13, 2014 by

 Airbus, Boeing, Embraer, Pratt & Whitney

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