Indeed the numbers Boeing told to the public were a little bit confusing. But when you look carefully what they really talked about, the picture gets clearer:
Let's begin with the situation we have today: Boeing says the 737-800NG is 8% better than the A320. This is probably a fairly accurate statement when you talk about COC per seat. COC or "cash operating costs" are the costs the airline pays for flying the aircraft from point A to B: fuel costs, maintenance costs for aircraft and engine, crew costs, landing fees, navigation charges. But as the 737-800NG has, in a typical layout, 162 seats compared to 150 seats in the A320, and the difference is - coincidentally or not - exactly 8%, the COC per trip should be right on-par between the two aircraft. That can be explained by the fact that the A320 is a little bit heavier than the B737-800NG, but the engines of the A320 have a better SFC, so that fuel burn should end up in the same range. Maintenance costs for the CFM56-7B and -5B should be not very much different also, maintenance costs between the two aircraft should also not be a decisive factor.
So for now let's assume:
|COC per trip||100%||100%|
|COC per seat||100%||108%|
Now the "neo" comes into play. But before the "neo", Airbus will gain 3 seats in the A320 through a new galley design, as we saw at the media briefing day last week.
The "neo" engine are advertised to save 15% fuel, at least when combined with the sharklets, which will be introduced before.
Also, these engines are advertised to have 20% lower maintenance costs.
Now: how much is that worth? First, we have to establish a certain mission we want to look at, as for a long flight fuel costs represent a larger pie of the (cost) cake than for a short flight. For our study let's assume a 500nm mission.
Even now, the question how much 15% lower fuel burn and 20% lower engine maintenance costs are worth in COC largely depends on the cost of fuel:
- At $1.50 per gallon you can assume that the fuel costs are one third of the COC. Engine maintenance costs would be in the 10% range.
- At $3.00 per gallon fuel costs are about 50% of COC and engine maintenance costs are more in the 6-7% range.
Now we have:
|COC per trip||100%||90,5%|
|COC per seat||100%||95,8%|
Boeing stated that the 737-800NG would have a 2-3% cost deficit compared to the A320neo. But that was before Airbus came out with the three extra seats. If you compare COC per seat on a 150 seat basis for the A320neo, the value is 97.7% - the Boeing statement can therefore be seen as accurate.
Scott Hamilton now thought that Boeing's message shifted when they said that the B737-800NG would still be better by 2% than the A320neo - but read carefully: now they are talking not about COC, but DOC, which include capital costs.
I have doubts that it makes sense here to compare DOC, as that implies that Boeing knows the pricing policy of Airbus or can foresee future leasing rates. In reality, it is very hard to estimate DOC's, as leasing rates vary, interest rates vary and so do depreciation rules in different countries.
If Boeing says that the DOC's for the 737-800NG are 2% better than for the A320neo and COC's are (say for simplicity) 2% worse, that implies that in their calculation COC's are 60% of DOC's and so capital costs are 40% of DOC's. That seems to be a little bit on the high side I think, at least in times of $3.00 per gallon, where COC's are higher than at $1.50 per gallon and historically low interest rates, which would lower capital costs. So the 2% cost advantage for the 737-800NG compared to the A320NEO might be, say "overoptimistic".
So, Boeing does not necessarily change messages - but:
- they change the topic of what they are talking about
- they are making assumptions which are at least not very transparent