Narrowbody Review 2012

Slowly, but inevitably, the year 2012 is coming to an end. Here are some thoughts about the current situation of the narrowbody market:

Boeing now has not yet fulfilled its own prophecy and has “only” 969 firm orders for the B737MAX in its books (with 819 orders in 2012), shy only 31 from the goal to have 1,000 by the end of 2012 and I guess that there will be another order (or more) in December to fill that gap..

Airbus, of course, was not able to repeat the big 2011 sales success of the A320neo (1,256 firm orders) this year. Still, Airbus sold another 323 copies of the reengined model until the end of November and now has a 62% market share when counting all neo and MAX orders. For the current models the share in 2012 is 47% (207 orders) for Airbus and 53% (233 orders) for Boeing. The numbers can still change with still to be formalized or alleged orders from Lion Air, Rostechnology, ACG, China Eastern, Pegasus etc.
Airbus, as stated in the EADS investor conference, has another ~ 200 slots to fill for the A320ceo until production ceases in favor of the neo.
Boeing has to sell approximately another 1,000 B737NG’s to fill up all slots until the B737MAX will go into full production in, say, 2020, about 2½ years after EIS. Until the end of 2017, when the first B737MAX will be delivered to Southwest Airlines, there are about 380 open slots for the B737NG. This will put a lot of pricing pressure on all narrowbody manufacturers. Especially Bombardier will find it hard to sell the CSeries at reasonable prices. We already have seen deals like that between China Eastern and Airbus, where Airbus agreed to take 18 regional jets from Bombardier and Embraer back to sell 60 A320 and we will probably see more deals like that.
Ryanair may be interested in another 200 or so -800NG’s, but at what price? Will Boeing have to take back one older -800NG for every two new delivered?

Order Bubble?

There are more than a few analysts who think that there is an order bubble, especially in the narrowbody sector (the latest article suggesting a bubble came just yesterday from Aspire Aviation). If there is one, I think, is highly dependent on some things that are very complex, like the “Euro Crisis” and the” US Fiscal Cliff”. If one (or both) of them do not get resolved there are consequences for the world economy that are very bad not only for the airline industry.
But if these issues get resolved, I do not see a general order bubble. One has to remember that more and more older aircraft need replacement and that a more or less constant growth of 4-5% per year means that this growth alone means more and more aircraft (or at least seats) need to be added to the world’s fleet to satisfy the demand.
There will always be airlines that fail – look at Kingfisher. And there are airlines that cancel aircraft orders or defer them – look at Virgin America. But on the other side, there are airlines like AirAsia, which are happy to take even more aircraft on short notice. AirAsia, for example, just announced to take seven more A320 in 2013 than planned before for a total of 28. At the beginning of the year they planned only to take 13 A320. These additional aircraft could come from  production slots originally planned for Virgin America. And AirAsia also wants more A320neo from 2016 on, so they could step in and take the early neo slots from VA (the order for 100 A320 family aircraft in November was probably placed by AirAsia).

UPDATE: Bloomberg says now that the order will officially be announced on12/13 and here is a turkish news website saying that Pegasus will order 70 A320neo plus 20 options on Dec. 18th.

State of the reengined models

The first PW1100G-JM is running in Florida, just two years after the A320neo program was announced by Airbus on Dec 1st, 2010. The engine seems to be on schedule, but if the fuel burn will be where P&W (and Airbus) wants it to be remains to be seen…

A few weeks ago, Boeing said to have reached another milestone in the program called “firm concept”. The word concept sounded a little bit awkward to me, but probably it means that the design is (more or less) firm and fixed – and not, that only Boeing’s thoughts how it should look like is firm…
So we can assume that work on both aircraft is now well underway, with the neo being roughly two years ahead, first metal was actually cut months ago on parts of the new pylon.
If one looks at how the latest design changes of the MAX engine integration, it gets clear that the LEAP-1B will hang much more forward and upward compared to the B737NG. Boeing says that the aerodynamic lines are following the B787 design, so it should be manageable from an aerodynamic standpoint.  But what does it mean for the structure of the wing?
First, the engine is heavier and that means that also the pylon will be heavier. I would expect that for every 100lbs the engine is heavier, the pylon gets heavier by 15-20lbs.
Secondly, the moment loading of the engine to the wing is much larger than on the B737NG, as the moment arm is longer and the weight is larger. Wing flutter could pose a problem here that has to be overcome with more stiffness in the wing, meaning even more weight in the wing.
The reason for the moved-out engine is the larger fan diameter, but also the higher number of stages of the LEAP-1B compared to the CFM56-7BE. Especially the LPT, which has to have more stages (because of the larger bypass ratio and therefore higher workload compared to the CFM56) and a large diameter (to get maximum efficiency through maximum rotational speed) makes the engine long and makes it hard to integrate as you need a certain area between the LPT casing and the wing to get the bypass air through…
This, of course, is also true for the A320neo and at least the combination with the LEAP-1A engine. The GTF concept here clearly shows it’s benefit. As the LPT speed is not directly coupled to the speed of the fan, you can choose the gear ration such, that both the fan and the LPT are running at their best possible efficiency with the LPT diameter being relatively small and the single LPT stages providing more work, minimizing parts and, especially, air foil count. The six fewer stages of the GTF (two less in the HPC, four less in the LPT) will result in some 2000 less airfoils. It is hard to say what that means for maintenance costs, as the bulk of the cost lies in the HPT and both engines have two HPT stages and thus a similar amount of parts in this module. The LEAP engine runs hotter, but GE says that their advanced materials and cooling technologies makes the parts running at the same temperature level as the CFM56. This should come at a cost, as R&D for new materials “burns” a lot of money, making it harder for CFM to sell the LEAP engine with a profit. On the other hand there is the quote from Sandrine Lacorre (CFM Product Marketing Director): ”What we can’t do technically, we will do commercially.” – So, as it seems, CFM conceded that their engine is technically not as good as the GTF and is ready to attract customers pricing. On the other hand the engine is expensive in production – probably more expensive than the GTF. So the question is how long CFM able to “buy” customers – as long as the aftermarket business with the CFM56-5 and -7 is generating enough cash, CFM  can subsidize one engine via the other. But long-term the LEAP program needs to be profitable on a stand-alone basis.
State of other OEM
COMAC officially revealed that the C919 will be delayed – a real shocker to the whole aviation world! ;-) COMAC just did not say by how long the program will be delayed. I guess it won’t be as long as the ARJ21-700 is and will be delayed (EIS for this DC-9 copy with CF34-10 engines was originally slated for 2007…

The Russian MS-21 from UAC is now due for EIS in 2017 – I remember an EIS of 2014 or 2015 two years ago. At least the Russian industry now has a flying modern airliner in production – the Sukhoi SSJ100-95 – although in small numbers and at low production rates.

Sadly, the CSeries will not make first flight this year. The (so far) half year delay is not a big surprise and does not put the program in danger. If it will be “only” a half year and first flight will be accomplished by the end of June 2013, Bombardier still did a good job – at least compared to the latest Airbus and Boeing programs…
Orders this year were disappointing: PrivatAir signed for 5 CS100, an unnamed customer signed an LoI for 5 CS100 and 10 CS300 and  AirBaltic for 10 CS300 and additional 10 purchase rights.
Conventional wisdom is that many potential customers may wait for the first flight to gain more confidence. So let’s wait for an order surge at the Paris Air Show…

Embraer is right about to decide about the engine manufacturer for their EJet G2 family. It seems to be a fierce competition between the incumbent GE and P&W with their PW1000G family offerings, but also Rolls Royce is in talks with Embraer. Meanwhile the backlog of the EJets is dwindling and the loss of the Delta campaign against Bombardier puts Embraer under pressure. A 2018 EIS might be a little but too late – if Embraer does not win a larger campaign until early 2013, production has to be slowed down.
In essence: another interesting year behind us, another just ahead!


  1. Good article.

    Interestingly it seems the total 100-220 seat NB market (bulk of the industry) has been changed and remains under strong influence of 1 smallish piece of gear, the PW gearbox..


    Pressure on a few lead engineers must be monumental!

  2. Very interesting and informative ATP.
    Very much looks as though Pegasus have gone A320.
    If US Air merger with AA is confirmed, the AA A320 order will also be ratified, but not until 2013.
    Air asia tomorrow looks certain

  3. What about China Southern, EasyJet and Vueling?

    1. See my latest post: Easyjet will decide in 2013, Vueling could be soon but could also be hold up because of IAG trying to buy them. I certainly expect more orders from China...

  4. I believe there are many airlines operating aging A320s that find the A320 NEO has become small and A321NEO is too large as a future replacement. Ryanair and Easyjet are amongst those. They want an optimized 200 seater. Also AF and BA seem to hold back.


    1. Keesja, as good as your idea is in theory, it won't happen.

    2. Who told you? ;)

      IMO its all about the money. If demand is there and competition too (737-8,737-9, MS21-300 and C919 stretch (under study) all fall inbetween the A320 and A321) the business case will grow.

      The A320 is no 180 seater unless you remove gallies, offer 3 lav's and 28-29 inch pitch. I can tell you its hell being in there for three+ hours when you're 1.92m. Scheduled operators won't consider it..

      Airbus seems to have a real opportunity to gain marketshare and strenghten the A320 family concept. Ryanair is (loudly) waving with an RFP, the A319 doesn't meet much sympathy (28 confirmed A319 NEO's out of the 1500 NEOs on order).

      The trend is clearly bigger NB aircraft. A 3-4 row stretch of the A320 would create a 5-10% CASM improvement and enhanced revenue potential for operators.

      Offering a 200 seater from 2018 iso A319 would have airlines convert their A320 orders (for a premium) and free up slots in the 2016-2018 time frame, creating new short term sales opportunities.

      Technologically, I don't see many serious risks.

      IMO a good A320 stretch would have a sales break-even of weeks rather then months.

  5. that 200 seat 'A320 plus' niche seems to be exactly what MS-21 is aiming for...