Leeham News and Analysis
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Leeham News and Analysis
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MTU investors day: views of its engine programs, future airplane timelines; separately, Embraer COO interview
Figure 1. Technical milestones have been passed on PW GTF programs for the applications on Bombardier, Airbus, Mitsubishi and Irkut airplanes and are approaching for Embraer. Source: MTU Investors Day. Click to enlarge.
Nov. 30, 2014: MTU Investors Day: MTU is a major participant in engine development and supplies, participating on the GEnx, GTF and GEnx program. It’s also a member of the joint venture in International Aero Engines and it’s a major player in the aftermarket Maintenance, Repair and Overhaul (MRO) sector, providing a serious competitive alternative to the aftermarket contracts offered by the engine OEMs. Its held an investors day conference Nov. 25. Highlights included:
- Milestones have been passed on the Pratt & Whitney Geared Turbo Fanengine for the Bombardier CSeries, Airbus A320neo family, the Mitsubishi MRJ and Irkut MC-21; and are on schedule for the Embraer E-Jet E2.
- The success of the GTF is requiring huge production commitments.
- The large number of airplane/engine programs require a major ramp-up of production during the next few years.
- The major investment in new engines is largely over for now, leading to the expectation of long-term revenue from MRO.
Boeing considers single, twin aisle, co-development 757/767 style for next new airplane
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Introduction
Boeing is looking at a number of scenarios for its New Airplane Study (NAS) that would replace the 757 and 737, have ranges from 4,000nm-5,000nm, and carry as few passengers as 130 or as many as 240.
To cover this broad range of demands could require reverting back to the 1980s when Boeing simultaneously developed two airplanes serving very different missions, the 757 and 767, that shared cockpits and some other common elements.
Boeing faces some hard decisions in the coming years, as Airbus outflanks Boeing in the single-aisle sector with the A320neo family and its latest offering, the A321neoLR. Our analysis and sales figures show the 737 MAX falling further and further behind in market share as MAX 9 lags vis-à-vis the A321neo.
We spoke with Kourosh Hadi, director of product development at Boeing, during a break at a conference last week organized by the British American Business Council-Pacific Northwest, and covered this and a number of other topics.
Summary
- Boeing is studying a New Light Twin (NLT) and New Single Aisle (NSA) to replace the 757 and 737 airplanes.
- The tipping point between an efficient NSA and the NLT is around the passenger size of the 757-200.
- Boeing is evaluating materials, including metals and composites, for the NAS and the manufacturing process, which will also be a determining factor in the materials for the new airplane.
- Engine advances for the 777X’s GE9X are beyond the GEnx and CFM LEAP of today and could help drive the next new small engine technology.
- Although having a miniscule portion of the 100-150 seat market, Boeing today plans to continue participation in at least the 130 or 150 seat sector even as airplane size moves up every year.
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 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.
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%.
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.
This 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.
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.
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.
We 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.
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.
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.
Figure 1. KLM Cityhopper E-jet taking off. Source: KLM
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
Boeing 737 MAX 8 as a long and thin aircraft and how it fares in general versus Airbus A320neo.
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By Bjorn Fehrm
Introduction
Over the last weeks we have looked at Boeing’s 757 replacement possibilities on its long and thin network niche, including a ground breaking launch interview for the A321neoLR with Airbus Head of Strategy and
Marketing, Kiran Rao. In the series we have seen that the A321neo has the potential to replace the 757-200 on long and thin international routes. Boeing’s equivalent single aisle entry, 737 MAX 9, has problems to extend its range over 3,600nm. It is too limited in the weight increase necessary to cover the longer range.
Many have asked how the less- restricted Boeing 737 MAX 8 would fare, suitably equipped with the necessary extra tanks. This is the subject of this week’s sequel on the theme long and thin. At the same time we look at Airbus entry in this segment, the A320neo, to see how it stacks up to the 737 MAX 8, both in their normal 1,000 to 2,000nm operation and then also in a long and thin scenario.
Let’s first summarize what we found so far in our four articles around the Boeing 757 and its alternatives:
Summary
Figure 1. Boeing 737 MAX 8 overlaid with Airbus A320neo. Source: Leeham Co.
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Posted on November 9, 2014 by Bjorn Fehrm
Airbus, Airlines, Boeing, CFM, GE Aviation, Leeham Co., Leeham News and Comment, Pratt & Whitney, Premium, Rolls-Royce
737, 737 MAX, 737NG, A320, A320NEO, Airbus, Boeing, CFM, Pratt & Whitney, Rolls-Royce