In the last couple of weeks a new discussion about the so-called „Middle of the Market“ or “MoM” aircraft broke out. Apart from that nobody really knows what this aircraft should look like (B757 successor or B767 successor or both, narrowbody or widebody, scalable to cover the B737 market or not?) or every potential customer wanting something different, I do not really believe in the launch of such an aircraft in the near future.
Airbus has no interest in such an aircraft. They have a good market position with their A321neo, especially the LR version and the future A330-800, although I don’t foresee large order volumes for that aircraft. For sure Airbus is studying the MoM, but (for now) for the pure purpose of looking into what Boeing could do and if and how Airbus would have to react to it.
Boeing would be the one to launch such an aircraft. But do they have to do it? Although the B737MAX has less orders than the A320neo, the amount of orders the B737MAX got is massive. The B737MAX8 is right in the sweet spot of the market and has a small advantage in costs per seat against the A320neo – if the LEAP-1B engine performs as advertised, what remains to be seen.
The B737MAX8 just had it’s first flight. the –MAX9 and the –MAX7 have to follow. So why unsettle your (potential) customers talking too much and eventually launching a new aircraft that would at least partly overlap with the B737MAX family?
Also, Boeing will probably feel a drop in cash flow during the transition of the B777 Classic to the B777X between 2020 and 2022, just when the MoM would need large sums of money for R&D spending.
But there is another aspect why I do not believe in a launch of MoM for a, say, 2024 entry into service:
It’s the engines, stupid!
To explain this, let’s go back to 2010: both CFM and P&W committed brand new engine developments to COMAC (CFM LEAP-1C) for the C919 and Irkut (PW1400G) for the MS-21. For both engine companies it was clear that both of these applications were not presenting a clear business case (to say it politely). So it was in the best interest of both CFM and P&W that Airbus went forward with the A320neo.
What is the situation today? Both CFM and P&W spend a hell lot of money to develop these two new engines and in building the infrastructure to build these engines for the announced production rates of the A320neo and the B737MAX and need to sell these engines now in the thousands to get the money back. At least CFM should have no real interest in MoM. P&W could see a potential to gain market share from CFM if they get onboard MoM. But what would be the reaction from Airbus if MoM would be launched? I would guess it would be a A320neo+ with a new wing, a taller landing gear and maybe including a A322neo+. So P&W would have to further invest into today’s PW1100G with another PIP (the first PIP is already announced for 2019) or a 2nd generation GTF engine.
And how much better would a MoM aircraft then be? Would it justify to invest billions of dollars into an aircraft that is maybe 5% better than the refreshed aircraft of the competitor, who can sell his product for a better price then? I don’t think so…
What about Rolls Royce? They are working on their own version of the Geared Turbo Fan called Ultra Fan. But a MoM launch decision by Boeing this year would definitely too early for RR to get onboard. The risk for Boeing would be too high. To me it isn’t even clear that we would see two different engine suppliers on a potential MoM aircraft. The market could be not large enough for two engine supplier to get a sound business case – and CFM likely would “force” Boeing with money to be the one, because they would be the one to loose market share if MoM would be launched with a second engine.
So I don’t believe in MoM – until it flies…