US Airways’ 757 problem

Notation: Lan Chile has canceled Boeing 787 flights through June.

US Airways has a large fleet of aging Boeing 757s it needs to replace. The problem is, a carrier official says, neither the Airbus A321neo nor the Boeing 737-9 MAX can do what needs to be done: Phoenix-Hawaii non-stop in both directions with maximum payload under all conditions.

The distance is 2,910 miles, well within the advertised range of 4,200 miles for the A321neo and 4,137 for the 9 MAX. But Derek Kerr, executive vice president and chief financial officer says fleet planners have yet to be convinced either plane can replace the 757W, which is uniquely able to handle the hot, summer conditions at Phoenix, where temperatures often soar to 110F degrees or more.

US Airways is one of only two legacy airlines in the US that has yet to order the MAX or the NEO (Delta Air Lines is the other). A year ago, US Airways CEO Doug Parker told us that the value proposition of ordering the neo still was unconvincing given the price premium sought by Airbus. Kerr told us last week that the large, outstanding order for the current generation A320 family as replacements for the oldest jets–and the lack of a true replacement for the 757–meant the airline wasn’t in a hurry to place an order for re-engined aircraft.

Airbus v Boeing: another round of what the customers tell us

With the recent spat upping the media war between Airbus and Boeing over whose airplanes offer better economics, we’ve been once more asking customers what their analyses conclude.

Nothing has changed from our earlier conversations.

As recent media and advertising wars relate, Boeing claims the 737-8 MAX is 8% better on a per-seat basis than the A320neo. Airbus claims its aircraft is 3.3% better than the MAX-8. The differences come in the assumptions of fuel burn, with Airbus claiming the neo will save more fuel than the MAX. Boeing claims the MAX, being lighter, will match the fuel savings and with 12 more seats, this is how Boeing comes up with the 8% figure.

Boeing also claims the 737′s maintenance costs are 24%-27% better than the A320, a figure which drives Airbus officials right up the wall as ludicrous. (We’ve written several times why we dismiss the validity of the Boeing claim as relying on old data on the one hand and data that can be manipulated on the other.)

In the last 10 days we have had conversations once more with customers and potential customers who have analyzed data from Airbus and Boeing and reached their own conclusions. These are additional customers to those we’ve talked with previously, thus adding to the list and data points.

The conclusions are the same:

• The A320neo and the 737-8 MAX are about equal in economics, with Boeing retaining a slight edge on a per-seat basis, but nothing like the 8% it claims. Boeing’s maintenance claims are laughed off. Commercial terms therefore become the deciding factor.
• The A321neo has the advantage over the 737-9 MAX, in part for the same reason the 8 MAX has the advantage: the neo has more seats than the MAX.
• The A321neo is a closer replacement for the Boeing 757 than the 9 MAX, although neither is a true replacement.

Bankruptcy fears swirl again around American Airlines

With bankruptcy fears swirling again around American Airlines, some questions arise what happens to the orders AA has with Airbus and Boeing if the carrier goes into Chapter 11.

This hand-wringing piece paints a dire picture for Boeing. There is a lot to argue with over this particular writing, but the piece’s headline is particularly off-the-mark. (Note that the writer of the piece and the headline writer may not be the same person.)

FedEx gets ‘best and final offers’ from Airbus, Boeing

FedEx is considering ordering the Airbus A330-200F or Boeing 767-300F. We learned at ISTAT that some at the company think the A330-200F is too much airplane in terms of range for US domestic service and would prefer the short-range A330-300F capable of carrying more volume. Although some months ago Jon Ostrower broke the story that FDX was talking with Boeing about the 767-400, we learned at ISTAT Boeing said “no.” It is focused on the KC-46A, 767-derived tanker and doesn’t want to take on a program that would divert resources from this effort.

Separately, we learned that Airbus and Boeing submitted their best and final offers last week and a decision–which might include a decision to do nothing–could come as early as this week. Concerns over the economy are spooking FDX, we are told, and there is a faction that favors acquiring more Boeing 757s for conversion and doubling up on frequency if capacity is needed while maintaining the flexibility to cut capacity in a downturn at a lower capital acquisition cost.

If Airbus were to win this order for the A330F, then the prospect of Airbus proceeding with the Mobile (AL) plant is back on the table, we are told.

 

Replacing 757s; Bombardier’s Scott and Delta; pricing engines

AirInsight, in a burst of prolific writing, posted three pieces of note today:

• An analysis of the cost of operating and maintaining Boeing 757s and why there is a move to replace this versatile aircraft;
• Thoughts on the departure of Gary Scott as CEO of Bombardier’s aircraft division and leader of the CSeries effort, with additional thoughts about the decision by Delta Air Lines not to order the CSeries or the Embraer E-195 at this time; and
• A think piece on the pricing competition between Pratt & Whitney and CFM for the new GTF and LEAP engines.