Boeing's big gamble

A recent article by Bloomberg about the new composite wing that could replace the current wing on the A320neo, a project called “The Wing of Tomorrow” by Airbus, spurred some discussions about the future Airbus narrowbody product line and how Boeing would/could react.

The subject, as Scott Hamilton writes, is not new at all. I heard about it in 2013 for the first time. Airbus at that time thought that Bombardier would launch a CS500 (today discussed as the A220-500) and thought that the CS300 was about 5% better in economics than even advertised by Bombardier to customers. This gives us a first indication of how good an A220-500 could be, as the A220-300 has at least the same costs per seat than the A320neo, if not better. A stretched aircraft always tends to have better seat costs than the original one, so the A220-500 has better seat mile costs than the A320neo “by definition”.

If the A220-500 it would be an A320neo and B737-8 killer, as Scott Hamilton thinks, is another question though and depends on how the A220-500 exactly would look like and what the mission is an airline is looking for.

Start with the current payload-range diagrams of the A320neo and the A220-300.

Looking at the payload-range diagram we see that indeed with 165 x 220lbs per passenger = 33klbs of payload the range is in the 3400nm range.

The payload-range diagram of the A220-300 is not yet updated by Airbus (at least not for the “flying public”) and still shows around 3100nm range with 140 passengers and 149000lbf MTOW. If we believe in the Airbus claim that with the new MTOW of 156000lb range would be 3550nm we get the new range-payload line approximately as a parallel line to the old one. Now let us seat 165 in that aircraft (knowing that it would not work of course) and we see that range would fall to around 3000nm by the addition of the extra 25 passengers of payload.

To seat these 25 passenger we would need to stretch the aircraft by five rows of about 4m of 13ft. This is about the same difference in length than between the A220-100 and the A220-300.

For simplicity, let us consider that the difference in OEW between the A220-300 and a potential A220-500 with unchanged MTOW would be same as the difference between the OEW of the A22-100 and the A220-300: 4100lb. Then we would get a range of the stretched A220-500 aircraft of around 2500nm.

On one hand, this is enough for probably around 95% of all flight a A320neo of a B737-8 is used for today. On the other hand, flexibility is key for many airlines, so the limited range of an A220-500 would be a problem for many airlines.

Now we can increase the MTOW of the A220-500 to increase range.

Start with a comparison of the wing loading: the A220 wing has 112.3 square meter, the A320neo 122.6. To get to same wing loading we could increase the MTOW of the A220-500 by about 3500lb. This would increase the range by approximately 300nm to about 2800nm. The original CS300 was advertised with this range. With the same wing loading and the same generation of engines, especially with a bypass ratio that is in the same range, runway characteristics should be comparable as well then.

So would the A220-500 be a A320neo and B737-8 killer? If you definitely do not need more range than 2800nm it could be.

For Airbus, with their “Wing of Tomorrow”, this would not be such a big problem. They could do the A320.5neo++ (or whatever it will be called). For Boeing, not having a competitive product against the A220-100 and -300 to begin with, the A220-500, together with a A320.5, could turn into a bigger problem. Both aircraft would squeeze the B737-8 from both above and below, the A320.5 with better range and economics and the A220-500 with dramatically better economics.

But the ball is in Boeings court. As it looks, they have to move first, either with an aircraft that aims at the so called Middle of the Market, that is now captured by the A321XLR, but leaving the B737-8 alone. Or by replacing the MAX family soon, which could counter an A220-500 on the low end but leaving the A321XLR and even more a potential A322 alone on the playground.

Canceling the joint venture with Embraer could have been a big failure going forward, as “Boeing Brazil” could have worked on the lower end of the narrowbody product line.

Disclaimer: these thoughts are just easy considerations without going through all the (engineering) steps necessary. But it gives us a hint where the different aircraft are relative to each other.


5X – what 5X?

During the last weeks Aviation Week had a few articles (here and here) about an alleged new Boeing widebody aircraft code-named -5X. More or less a NMA reloaded, this aircraft would be targeting the A330neo family, but in turn as well the 787-8/9.

Stop –say what? The 787 is right now not selling like hot cakes, but the A330neo not as well and the main reason is COVID-19, although also without the pandemic both aircraft would see lower production rates today than until 2019. So where is the point in developing a new aircraft there? The NMA, which was not able to produce a business case for Boeing, was shelved and was probably almost the same aircraft. Part of the problem back then was that the engine companies did not see the market as attractive as Boeing (officially) did and both CFMI and P&WA only wanted to develop an engine as a sole source.

So where is the reason to believe that now, two years later, it actually looks better for an aircraft like this?

The only thing Boeing should concentrate on is a new Single Aisle aircraft family! If Boeing would start an aircraft like -5X now with an EIS not before 2027, themselves as well as the engine companies would not have the resources to be able to counter an A320neo++ family with a new wing and engines that will then get a performance improvement package from the -5X engine(s). Also, as Scott Hamilton from Leeham writes today, the A220-500 is only a question of when, not if. So the lower end of the B737MAX would get increasing pressure once the - 500 is on the market. The B737MAX would be dead then, "killed" from the A220-550 from the lower end and from the A320neo++ and A321neo++ from the upper end – and in turn BCA would be dead!

But is it possible to design an aircraft family that can compete with the A220-500 on the lower end and a future (possible) A322? No, but the Airbus narrowbody aircraft family has two wings, two fuselages and different engines as well. So a clever scaling of the fuselage and the wings could do the trick for Boeing. Starting with the larger (6 abreast) family, starting just north of today's 737MAX-8 up to a A322 sized aircraft. After that scaling fuselage and wings down to a 5 abreast aircraft with a second or third generation of the PW1500G for example.

Just my 2 cents of course - but I see less than these 2 cents of value in a -5X! 


GE and the Geared Turbofan

There was quite a lot of hype in the last days around a story, first reported by Bloomberg, saying that GE talked with Airbus about a new engine for “a narrow-body jetliner in development”. In the article (and many that followed that first story) there is a lot of speculation about the aircraft: If it would be a successor of today's A320, a future stretched variant of the A220 or if that aircraft would in the end be the ZERO E (E for Emissions) aircraft announced by Airbus in September and the engine GE and Airbus discuss here would be an engine that would be used for that aircraft until a ZERO E engine (technology) would be available.

To make it short: this last consideration is – sorry to say it that way – bullshit! Whatever the source of energy of the future ZERO E aircraft would be – hydrogen or electricity comes to mind- the aircraft has to look very different from the design of a jet fuel powered aircraft and it would make no sense at all to hang a Geared Turbofan on an aircraft designed and optimized for zero emissions.

The fact that GE and Airbus talk about a new narrowbody is not a big story in the first place, as there are always discussions between airframers and engine companies about all kinds of possible future projects. But Bloomberg made a lot of noise due to the fact, that the design proposed by GE would be a geared turbofan, which is the engine design that today only Pratt & Whitney uses. GE always more or less dismissed the geared design in public because of the added complexity of the gear. Rolls Royce began developing their own geared engine concept called Ultrafan a few years ago.

So does GE not believe in the conventional turbofan anymore?

Not necessarily: believe it or not, but it is not the first time that GE proposes a geared design to an aircraft manufacturer. For the B777X, today's B777-9, GE also pitched a geared design towards Boeing, as did P&W at that time (I believe RR proposed a 3 spool design). But obviously Boeing went down the low-risk path of the GE9X engine, an evolution of the GE90-115B and the GENx engines, although the geared engines would have had a better fuel burn.

For the now (forever?) dormant NMA, Boeings reference engine was a geared turbofan. This makes sense, as at least in the beginning two of the three possible engine provider offered a geared design (P&W and RR), so we can only guess that GE (or CFM) also offered both variants (geared and non-geared) to Boeing. Later RR went out of the discussions as the aimed EIS timing was too early for the UltraFan.

So when today GE talks with Airbus about a geared engine, there is nothing sensational in there. Most likely the geared engine is just one out of two or more designs. And it most likely not more than a paper study, in which P&W and RR are involved as well. It is not more than the usual business of the future concept groups of all parties involved.

So do not expect an announcement of a new aircraft in the near future. Even a stretched A220 (-500) seems not to be on the horizon too soon...


Next (new) airplanes

After NMA is obviously no more, some people seem to believe, that Boeing could instead bring a refreshed B757 or B767 to market.
Is that viable? No, I would say, at least not for passenger traffic!
Both aircraft are late 1970’s aircraft, thus about ten years older than the A320ceo. Both were the first narrow- and widebodies with a two-crew-glass-cockpit.

But: the design of the airframe and the wing keep to be from these days, aside from getting winglets, saving up to 4% fuel burn.

So a new wing, along with the new engines, would be inevitable. Along with that goes a new center wing box. That means typically at least 50% of the development costs of a complete new aircraft.
But it does not stop here. A new cockpit with all the technology of B787 or B777X would be needed to make these airplanes attractive to airlines.

Now to the engines: for the B767 GEnx engines would be the likely candidate, and here the -2B version, as it has the right thrust and also a bleed air system. The GEnx though is an engine which was designed in the early 2000’s. The concept would me more than 20 years old if Boeing would decide to start development now with an EIS in 4 to 5 years. The basic aircraft concept would then be 50 years old.

The same is basically true for the B757: with the difference that there would not be an “off the shelf” engine with the right thrust available. But would any engine company spend $1bn for a brand new engine for a 50 year old fuselage? CFM/GE and PWA for sure not, as they have their engines in place on the A321XLR. So only RR could have an interest, but with todays news that they are laying off some 8000 people and delaying the development of their Ultra Fan this is more than questionable. In fact, I see RR in danger as they are so heavily exposed to the widebody market, which, in the opinion of all experts, will be the last market segment to recover.

So there won’t be a new aircraft from Boeing for the time being. CEO Dave Calhoun though says that the “true differentiator” of Boeing’s next aircraft will be “the way we manufacture and the way we engineer, as opposed to the… design of the airplane itself” (quote from the Flightglobal article). What does that mean? As I understand it: the B737MAX will stay the B737MAX, Boeing will (just) look into the cost of production. Well, hopefully they will get it right…

What does that mean for Airbus? A great opportunity, if they are bold and can get money in a similar manner as Boeing raised $25bn on the capital market. If Airbus can raise enough money with a lower yield than Boeing did, Airbus could use that money to invest in the so-called A320neo++, where the A320neo and the A321neo will get a new and larger composite wing and a new cockpit and both would be stretched to a “A320.5” (between todays A320 and A321) and a A322. Then Airbus would also need to develop the A220-500 and would have the perfect product line for the rest of the century and the early 2030’s.

Boeing meanwhile is stuck with the problems of the B737MAX:
1.     The grounded fleet at the airline customers has to be upgraded.
2.     The undelivered fleet has to be upgraded and to be delivered.
3.     Reacting to the potential A320neo++ would lead to the B737MAX being a non-seller
4.     The MAX is MAXed out: without a new wing, a complete new, longer undercarriage and larger bypass engines (from the A320neo) the B737MAX could not compete against the A320neo++. But would that make sense? No, then a complete new aircraft would be needed. Means another $15bn to be found somewhere, meanwhile back the $25bn bonds. Not easy…

So far for my theory…


How Corona could change the future of Aviation

How perfect aviation was just weeks before: the new corona virus (SARS COV-2) seemed to be contained to be local chinese problem only, global growth seemed to be unaffected. If the virus could have a negative impact, then it would be just a very temporary dip like we saw when SARS (SARS COV-1) appeared in 2003. Then, growth rates quickly came back to what they have been before.
For now, we should not count that to happen again after worldwide infections with the virus have dropped significantly. The timing of this, of course, is the first open question: some state leaders seem to think they can beat the virus by ignoring it and tell their people they should not be cutie-pies just because they do not get enough ventilators…
But let us think what will happen after the crisis – whenever that may be:
A lot of airlines will cease operations indefinitely – not just temporarily as just right now. Even if many governments will throw a lot of money onto their national airlines, I think it is fair to assume that many will not survive in the long term, just because they lost too much money meanwhile.
But what is more important is what CEO’s of large and strong airlines say these days. CEO’s of airlines which should survive the crisis. Let’s take a look at Lufthansa, Delta Air Lines and United.
Lufthansa’s Carsten Spohr said these days that after the crisis his airlines group will not see the scale as it had before. Spohr is sure that after the corona crisis the whole aviation industry will be a different one: “We have a smaller Lufthansa group ahead of us.”
As for Delta, CFO Paul Jacobson already said: “We’re going to be smaller coming out of this” and Henry Harteveldt, president and founder of Atmosphere Research said he would not be surprised if that will be also true for United and American. In fact, also United CEO Oscar Munoz and president Scott Kirby warned in a letter to employees, that “our airline and our workforce will have to be smaller than it is today.”
If this will be true, and not just for these particular carriers but for the whole industry around the globe: what does it mean?
First: less airplanes in the sky. The question is then, relative to today, where airlines parked up to 95% of their fleet, which airplanes they will fly then. Will they put their older aircraft out of storage again or will they grow only modestly, getting only the younger aircraft out of storage and then grow slowly with deliveries of new aircraft? That depends on if they can pay for new aircraft and if the aircraft they own today are owned by themselves.
Airlines with better financials may take new aircraft and benefit from lower operating and maintenance costs. On the other hand, if they own their aircraft without any debt on them and oil prices are staying low, it could be more economical for some time to put at least some of the MD80, B757 and B767 out of storage again.
Why is that an important question?
First, it is important for the fight against global warming – at least politically. As most sectors were able to cut their CO2 output in the last years, aviation was not. In fact, the goal of climate neutral growth from this year on was always questionable at best. Now, with the corona crisis, CO2 output this year will fall compared to last year for sure. It will probably take some years to reach the level of 2019 again. And it will take longer, the more of the older jets now in storage will be replaced with A350, B787, B777-9, A320neo, B737MAX, A220 and the likes.
But the question is also important for the ones like Airbus and Boeing of course. If airlines let their old aircraft in the desert, aircraft production will soar again as new aircraft are needed for the growth after the crisis. But if older aircraft be flown again, we probably will never see the rates of 60 aircraft a month for the A320neo or B737MAX.
For the engine industry, it would be more of a financial problem when all the old(er) aircraft will be scrapped. Too many engines would then be available for part-out, flooding the aftermarket with used parts and destroying the then anyway smaller, but today very profitable business with spare parts.
Sales of the engine industry would then be heavily torted to the new engine business, which is not profitable at best, not to say loss-making.
So the profitability of the engine industry would be hurt badly -  or the industry would have to change their business model by shifting profits from the aftermarket business to the new engine sales. Of course that could only happen if all engine makers would agree to that and if airlines up to a certain point as well.
In case the profitability of the engine makers is hurt too much, they would not be able for adequate research for the next generation of engines that would be needed for an A320neo or B737MAX successor. The corona crisis could have shifted the arrival of these new aircraft the right for a few years now anyway as also Airbus and Boeing will probably have to scale back their R&D costs in the next few years.
So a good thing - a more modern and CO2 efficient fleet in the short and mid term - could lead to a bad thing in the more distant future: later introduction of breakthrough technologies.