Last week we discussed Airbus’ A350-1000 dilemma. The -1000 will be a fine airplane, but we concluded the company needs to go forward with a larger capacity “A350-1100″ to match the size of the Boeing 777-9X, but take the Boeing 787-10 approach and be content with sacrificing range in lieu of designing a new wing and engines.
Airbus’ A350 dilemma doesn’t end there. What’s it to do with the A350-800? One fleet planner told us a year or more ago that the “-800 is an expensive A330-300″ with the same operating costs as the larger capacity A350-900.
Airbus has been encouraging customers to move up to the larger A350-900, with Hawaiian Airlines and US Airways the key hold outs. Conventional wisdom says US Airways will swap its order once the merger with American Airlines goes through (which is looking more and more likely, given settlement talks with the Department of Justice). American has a large order for the Boeing 787-9, making the -800 unnecessary in a combined carrier fleet plan.
There are now around 80 -800s in Airbus’ backlog, and even officials at Airbus have been ambiguous about green-lighting production of the -800, which is supposed to enter service in 2016 (after the -900 but before the -1000). We have written several posts in which we concluded the -800 would be re-sequenced to 2018, after the 2017 EIS of the -1000.
We believe there is a very good chance the A350-800 will be dropped in favor of proceeding with an A350-1100.
So what’s Airbus to do in the 250-300 seat space now occupied by the -800 and the aging A330 family?
A380 Sales: Orders for the Airbus A380 have been dismal, but Tom Enders, CEO of Airbus parent EADS, sees a turn-around in sales. With the forthcoming Boeing 777-9X, which at 400 seats is considerably smaller than the 525-seat A380, Airbus sees the need to undertake Performance Improvement Packages (PIPs) to improve the economics of the A380. Tim Clark, President of Emirates Airlines and the largest customer by for the A380, has publicly said he wants to see the A380′s engine makers (Engine Alliance in his case) incorporate newer technology from the GEnx and the 777X’s GE9X and Pratt & Whitney’s GTF into the GP7200. The GP7200 is a JV of GE and Pratt & Whitney.
Airbus is also offering an 11-abreast coach seating in the A380, which would add 40 more seats and lower the cost per available seat mile (CASM) accordingly.
The A380 has proved more economical than Airbus expected, but needs a large load factor of at least 75% (393 passengers at the 525 seat configuration) to be profitably, Enders said. In today’s environment, this is achievable but it also demonstrates the risk inherent to Very Large Aircraft (VLA). According to our airline sourcing that has analyzed the airplanes, smaller aircraft, such as the 777X, Airbus A350-1000 and Boeing 787-10 have similar seat mile economics but lower plane-mile costs without the capacity risk. One airline tells us that “if you can fill the A380 and 747-8,” the airplanes have their place. The four-engine VLAs also are better in the hot-and-hgih environment for engine-out and field performance. But clearly these high capacity and hot-and-high markets are limited.
FAA 787 approval could come next week: Reuters reports that the Federal Aviation Administration could provide a key approval next week that will open the way to the final documentation required to lift the grounding of the Boeing 787. Meantime, and unrelated to the woes of the 787, the FAA has certified the latest performance improvement package for the 787′s GEnx engines.
Ode to a Boeing engineer: Brier Dudley of The Seattle Times has this tribute to a talented Boeing engineer. Then a day later this story of Ken Holtby, another key Boeing engineer, appeared.
Last year yielded a few surprises in an otherwise predictable year.
Jim Albaugh shocked the aviation world when he retired unexpectedly at age 62. He was expected to remain in his position as CEO of Boeing Commercial Airplanes until mandatory retirement at 65.
EADS CEO Tom Enders unleashed a surprise merger proposal with BAE Systems. The deal didn’t work due to German government opposition, but he ultimately accomplished a governance restructuring—a key objective of the merger—that will reduce government meddling in the future.
Those were about it. Boeing’s much-anticipated Authority to Offer the 777X didn’t happen. ATO for the 787-10 was stealthily granted. Airbus and Bombardier, to no surprise, delayed the A350 and CSeries by a few months. Boeing came roaring back to become sales leader for the first time in about a decade, on the strength of 737 MAX sales.
What’s ahead for 2013? Here’s what we see.
With the spurt of 737 MAX sales over, narrow-body sales competition between Airbus and Boeing should return to normalcy. Will twin-aisle sales become the next growth market because of the first flight of the A350 and the program launch of the 7870-10? Will ATO of the 777X evolve into a program launch as well? Will Bombardier’s first flight of the CSeries and subsequent testing validate its claims for the new technology airplane and finally spur a large number of sales of the “show me” crowd?
It’s Christmas Eve but there is some news despite this being a slow day.
CSeries and London City Airport: The downtown airport is a highly challenging one. Aircraft have a challenging approach. The runway is short. British Airways operates the Airbus A318 to New York with a refueling stop westbound. Bombardier says its CSeries can do the trip non-stop. This article provides some detail.
New Life for BAe-146: This airplane didn’t have much to recommend it. In its original 3×3 configuration, it was a cramped airplane. It had four engines. The original engines were unreliable. But here’s a new life for them.
SPEEA’s next step: The Boeing engineers’ union takes another step to prepare for a strike, beginning Feb. 1.
Airbus last week announced additional gross weight upgrades and improvements to the A330-200/300 that increase range and reduce fuel burn. Aviation Week has this story about the enhancements.
This is the latest in a series of improvements taking advantage of the four year delay in the Boeing 787 program that Airbus believes will enable the airplane, which first entered service in 1994, to remain viable well into the 2020 decade.
Boeing launched the 787 in December 2003 and promptly claimed the aircraft would kill the A330. Had the aircraft entered service in May 2008 as originally planned, Boeing might have been able to make strides to do so. But delays allowed Airbus time to incorporate several Performance Improvement Packages (PIPs). The European company has sold more A330s post-787 launch than it did before.
The latest improvements give the A330-300 an anticipated range of more than 6,000nm, compared with less than 4,000nm when the airplane entered service.
There appears to be a lot of focus on delays in delivering the next Boeing 787s to United Airlines–which has received one–but neither Boeing or United is saying what’s behind the delays. (Update, Dec. 1: one of the three was delivered yesterday.)
According to the Ascend data base, line numbers 45, 50 and 52 are supposed to be delivered this year and 55 and 77 are supposed to be delivered in January. All are with GEnx engines.
Here are some possible reasons for the delay:
Rework is the obvious one. The first “clean” airplane to come off the Boeing assembly line in Everett was around line #66. The lower the line number, the more rework. UAL’s line numbers are higher, but rework is still necessary.
GEnx engines. The failures on the 787 and 747-8 GEnx engines were unrelated and, as these things go, not especially severe, but fixing them is, we are told, complex for engines already assembled. Qatar refused delivery of its first 787 because of the GEnx issue. Contractually delivery has been accepted but the airline also wanted additional IFE (inflight entertainment equipment) installed and physically hasn’t accepted delivery. So…
IFE upgrades: These UAL 787s were ordered by Continental Airlines prior to the merger and it’s been reported in the press that the delays in Boeing’s delivery left UA/CO will older, less sophisticated Buyer Furnished Equipment (the IFE). Maybe UAL wants more current IFE?
We were asked by media if this is another blow to the 787 program. We don’t think so. At this point, we haven’t heard of anything about the reason for the delay and pretty well shrugged it off anyway.
Meanwhile, Airbus is in talks with at least some of its A380 customers seeking compensation for the operational interruptions resulting from required inspections related to wing rub brace cracking. Compensation could amount to millions of Euros per customer.
787 fuel burn: Aviation Week has this story about the early fuel burn results for the Boeing 787 beating expectations (which admittedly were tamped down because of the program difficulties). Some of this has been reported before. What caught our eye was the detail about the GEnx engine. Why? Because the CFM LEAP-1B derives much of its technology from the GEnx, including the higher temperatures fleetingly referenced in the AvWeek piece.
CFM is relying on high temperatures to achieve the fuel burn required by Boeing’s 737 MAX. This is hotly debated (pun intended) between CFM and Pratt & Whitney in the competition between the LEAP and the PW GTF.
CFM advocates that its hotter-running engine, equipped with advanced technology ceramics and other advanced materials, gives it the advantage over PW’s Geared Turbo Fan technology. PW argues that the hotter CFM engine will require more maintenance. Engineers that we ask generally agree that the hotter temperature approach will be a challenge for long-term maintenance but fall back on CFM’s sterling reputation of reliability as a measure of comfort. At the same time, these same engineers–who have no connection to either CFM or PW–like the GTF technology but want to see it proved in service.
Steven Udvar-Hazy said it best. It will be five to seven years after the engines are in service before the industry knows the reliability and performance of either engine’s advanced technology.
Boeing today (Nov. 3) announced it now has more than 600 commitments for the 737 MAX, as well as confirming the 68 inch fan selection and discussed some other issues related to MAX.
Our immediately preceding post synopsized Jim Albaugh’s presentation to Goldman Sachs. Shortly after this, Boeing offered up to the media a tele-press conference with John Hamilton, 737 chief program engineer, to update the status.
One of the things he also referred to was the 600+ commitments by eight airlines for the MAX. Based on questions from the media, focusing on when “commitments” become “orders,” we thought it might be useful for the Reader to discuss this.
For those who don’t believe there was a connection between the Cargolux-Boeing-GE dispute and the 787 and Qatar, watch the Dubai Air Show. We’re hearing Qatar will sign announce it has selected GEnx for the 787.
Speaking of Max, Boeing didn’t say much about the 737 MAX on the earnings call. In fact, Jim McNerney was downright ambiguous. Boeing is still considering where to build the airplane and it’s still talking to customers. Boeing said in August at MAX’s unveiling that design details would be forthcoming the following month. November is around the corner and we’re still waiting.
Boeing’s union nemesis, IAM 751, is already reaching out to membership about “wants” for contract negotiations next year. Overhanging negotiations will be the NLRB complaint–testimony is supposed to begin next month–and the MAX assembly site. Our prediction: this will be purely a testosterone contest. We have dour predictions at this point.
Airbus and the A350: assembly is supposed to begin by year end with first flight next year. We’ll see.