Odds and Ends: Puzzling math remains puzzling in 737 v A320 debate

Puzzling math remains puzzling: Boeing has said for the better part of two years that the 737-800 is 8% more economical than the Airbus A320 and the advantage translates into leads it claims for the MAX over the NEO. With the addition of the Advanced Technology Winglets (BATW), Boeing now claims the 737 MAX will be a whopping 18% more economical than today’s A320 and up to 10% better than the NEO.

Such claims make Airbus almost apoplectic. Airbus rejects outright Boeing’s 8% claim and further said its own analysis on the MAX (pre-BATW) indicated the best improvement Boeing could get was 8%, not 10%-12%. Airbus also sniffs at the new BATW. Airbus evaluated the design before settling on the sharklets as more advantagous.

We’ve always been skeptical of numbers advanced by Airbus and Boeing because, after all, they are hardly objective. We’ve placed more weight in analyses offered by customers, for obvious reasons: they are the ones who have to operate the aircraft and truly know theory in real life.

We’ve previously written that Lufthansa concluded the 737 MAX will have a 2% advantage over the A320neo (also pre-BATW), which returns the competition to the “status quo.” This means that in Lufthansa’s analysis, today’s airplanes are only 2% apart, not Boeing’s claim of 8%.

Now comes information to us that Qantas–which operates both types through its own airline and the JetStar subsidiary–finds its operating experience to be so close as to be indistinguishable.

So we asked Boeing about that, and about how its methodology comes up with the numbers it advertised. Here’s the response, foregoing addressing the results of the airlines, citing long-standing policy of not commenting on customers. As for the methodology:

[Our analyses] are based on our average vs. Airbus and not individual customer statistics. There are too many variables to be able to address specifics and details.

Our numbers are cost per seat and are based on a 500 nm mission using typical European economic rules for airplanes with two-class seating giving the Next-Generation 737-800w (with PIP – Performance Improvement Package) 162 passengers and the A320 150 passengers.

Fuel burn values are Boeing tested values for the Next-Generation 737 and Boeing estimates for the A320. Maintenance costs are estimated using Boeing methodology which takes into account industry reported data from the FAA and IATA for both manufacturers. Same crew cost, landing and navigation and passenger handling cost models are applied to both airplanes.

We’ll note from our previous discussions with Boeing that Boeing acknowledged factoring in 737 PIPs (as cited above) but not factoring in A320 PIPs. Airbus claims Boeing uses the CFM56 as the base engine for the A320, rather than the V2500, which is 1.5% more efficient. Airbus also claims that Boeing uses older versions of the CFM56 as the A320 base engine rather than the newer, more efficient model. Airbus also uses 800nm vs Boeing’s 500nm for its analysis. (AirInsight’s analysis of US operation confirms that A320s and 737s tend to fly, on average, around 1,100sm, concluding that the longer range assumption is indeed a fairer data point.)

So the puzzling math used by Airbus and Boeing remains puzzling. The airlines say the airplanes are very close. We believe the airlines.

ExIm Bank: Just when we thought this was over, it turns out the Republicans in the US Senate Wednesday blocked a vote to approve reauthorization of the US ExIm Bank and a hike in its ceiling to $140bn. This story has additional detail. Boeing and GE take a hit on this.

Emirates to Boeing on 777X: Get a move on. You’re taking too long.

Odds and Ends: 777-9X will create new class of airplane

Boeing 777X: The 777-8X, said to be a replacement for the 777-200, is really sized closer to the 777-300 and the 777-9X is a new class of airplane. See this story for details.

A330neo: It’s a story that won’t die: talk of re-engining the A330. But does it make sense? AirInsight completed a short report in which economics of the A330, the A330neo, the A350, the 787 and the 777 are evaluated. The results indicate that while the A330neo will have a major gain in fuel performance, and in fact will be almost equal to the 787-8 with substantially more seats for revenue opportunities, it still falls short of the 787-9 and the A350.

The A330neo, suggested by AirAsia, would mimic the minimum-change A320neo and thus be different in scope than the original A350 proposal, which was a re-engined, new-wing, new system version of the A330 (much as the 777X will be compared with the 777). Airbus says it’s not interested in the A330neo “for now” but consultant Michel Merluzeau predicted at a conference organized by the Pacific Northwest Aerospace Alliance that Airbus will eventually proceed with the airplane.

But are the gains good enough to make sense to proceed with the project? The report is offered for sale for a modest $99.

WTO, Airbus and Boeing: It’s another story that won’t die (and do we wish it would): The US vs the EU on the illegal subsidies to Airbus. The US has stepped up its pressure to have the EU decide that the assertions by the EU that it has complied with the WTO findings are inadequate. The US wants to impose $7bn-$10bn in sanctions annually. The EU says the US is full of it.

MAX v NEO: Guy Norris at Aviation Week did his own analysis of the fluff Airbus and Boeing put out about the MAX and NEO fuel efficiency. Just goes to show you can’t believe either party. That’s why we like to rely on the analysis of the customer. Lufthansa has analyzed the MAX and NEO and told us last year (and again at ISTAT last month) it concludes there is only a two percent difference (in Boeing’s favor) between MAX and NEO, which LH said both times simply retains today’s status quo between the two OEMs. (This also throws cold water on Boeing’s claim that the NG is 8% more efficient than today’s A320.)

Caution flags waving as we enter 2012

As 2012 opens, we are concerned about the increasing signs global cargo traffic is softening.

Cargo traffic is typically a leading indicator of passenger traffic, both on the decline and subsequent rise. Cargo traffic fell 25% globally at the start of the Great Recession and passenger traffic soon followed. Cargo traffic began to recover before passenger traffic as the world edged out of recession.

But now, there are several indicators cargo traffic is softening again. IATA figures show traffic is on the decline. Additionally, there have been several developments at individual airlines.

Odds and Ends: A380 cost, American’s engine order, ‘war on Boeing’

A380 cost: Flight Global reports that Air France–a launch customer of the Airbus A380–just concluded a lease deal for one of the giant airplanes for a rental of $1.8m per month.

For an airline of Air France’s credit, lease rates are typically on the 0.80% range and sometimes as low as 0.72%. This, then, infers a purchase price of $216m-$230.4m.

American Airlines: It was announced Monday AA split its engine order between CFM (for the Airbus A319) and IAE (for the A321). Given American’s large CFM-powered Boeing 737 fleet, some might think CFM should have won the entire engine deal. But the IAE V2500 is viewed as the better engine for the larger A321–more thrust and lower fuel burn–and American follows Lufthansa Airlines in splitting the engines for the smaller and larger Airbus family.

Aviation Week has an article that provides some other interesting information about the leases for the Airbuses.

Pratt & Whitney: Does the American deal mean PW has a good change of placing the GTF on the A320neo order by American? PW’s buyout of the Rolls-Royce share of IAE certainly gives PW the ability to do a “global” deal involving V2500 and GTF engines, something CFM has been able to do for CFM56 and LEAP engines from inception. While Rolls-Royce was involved in IAE, there was no incentive for RR to be flexible on V2500 sales that might lead to GTF transactions. Now PW can wheel and deal all it wants.

War on Boeing? Aviation Week has a speculative piece that US airlines have declared “war on Boeing.” This think-piece relates to the Air Transport Association suing the US Export-Import Bank over plans to finance 787s ordered by Air India, a financial and management basket-case.

While AvWeek raises some interesting points, we’re told this has more to do with a dispute between Delta Air Lines–instigator of the ATA action–and India. We think Boeing is merely getting mugged in the process and that this is not a “war on Boeing.”

Turboprops: Jets always draw the most attention but Aspire Aviation has a long piece about turboprops, specifically the Q400 vs the ATR series, that merits reading. Turboprops are slowly regaining favor in some quarters.

The Beauty of it: From Randy Tinseth’s blog, here is a photo that is just a beauty, from the Dubai Air Show:

Boeing (doesn’t) prepare to deliver first 747-8F and we look at the program; update 9/17

Update, Sept. 17: Boeing must feel snake-bit.

We had boarded our flight to ISTAT Barcelona and were still at the gate in Seattle when news erupted that the first delivery of the 747-8F to Cargolux is off. AirInsight has a commentary on this. We expect to pick up some intel on the issue, perhaps as early as the Sunday night reception but otherwise Monday or Tuesday. Watch our reporting from Barcelona.

Original Post

As Boeing prepares for delivery ceremonies for the 747-8F to Cargolux Airlines September 19—an event we will miss because of travel in Europe to the ISTAT conference—The Boeing Co., its employees, suppliers, and the airline personnel are justifiably excited.

Not only does this represent the hand-over after a two year delay in a difficult program, it represents the largest airliner Boeing has ever built, the latest and most advanced version of the venerable 747 but it also represents what is almost certainly the last 747 model that will ever be built.

As cool and as whiz-bang as the 747-8 is (though obviously, Lufthansa’s 747-8I will have more panache than a freighter), our thoughts go in a different direction.