737 successor Part IV

In early March I wrote the first piece of this story and explained why I think that a "small widebody" seems unlikely as a 737 successor aircraft.
Hearing Boeing CEO McNerney at the conference call on Wednesday kind of confirms that. He said that the next new airplane will probably first address “the heart of the market,” which is 145 to 185 seats, McNerney said. “Which is not to say that we will leave the (7)57 space unaddressed at all.” (quoted from the seattle.pi blog).
So Boeing clearly will not back away from the "Southwest Airlines" market, which is (as of today) the lower end of that bandwidth, but SWA just this year also ordered their first batch of B737-800, representing the upper end of that "heart of the market".
Not leaving the 757 space unaddressed means they also plan to have an aircraft in the family with 200+ seats. But this would lead to a competitive disadvantage on the lower end, if all family members would have the same wing. If the 200+ seater should have a transatlantic range, the wing has to be considerably larger than today's 737NG wing. That would burden the 145 seat family member with a wing that is too large and too heavy. Trim drag would have to be used during cruise to keep the aircraft flying in level flight with the desired speed, as the large wing produces too much lift - alternatively the aircraft could fly slower, burning less fuel, but cutting productivity.
And by the time the new Boeing aircaft arrives, there could be, apart from the CSeries, another narrowbody - optimised for around 150 seats and probably lower range than the ~3000nm CSeries: a new 5 abreast aircraft from Embraer. With around 2200nm as today's EJets, a specific version of the GTF, the LEAP-X or even a new engine from RR, it could be better than the CSeries and the new Boeing aircraft.

Boeing of course could produce two wings - one for the lower end of the market and one for the upper end - in case of the 787 that strategy failed, but for reasons that do not apply in the narrowbody sector.

About the timing McNerney said:  “You’ll hear more from us at the end of the year.”
So, as I wrote in the third part of the story, we will obviously not hear anything spectacular from Boeing at the Paris Air Show - only a "guidance", probably further emphasizing that they lean towards an all new airplane, but not ruling out a reengining at all.

The first three parts of the story are here:
Part I
Part II
Part III

COC and DOC Part III

Today I discovered a very interesting website: The "Airline Data Project" from MIT.
There is a lot of airline data from all major american airlines in that database. From that data you can easily pull DOC and COC's and compare airline to airline, a specific airline though the years or whatever you want to find out.
Let us have a look at two typical carriers:

• American Airlines as the typical legacy carrier
• Southwest Airlines as the typical low cost carrier

I looked at two years - the first available (1995) and the one with the highest fuel prices (2008).
In 1995 the price for aircraft fuel was relatively stable at about $0.50 per gallon - unbelievably low for us today.
Im early 2008 the price already was in the region of $2.70, then climbing to almost $4.50 in July before falling rapidly to a low of about $1.00 in December 2008.

Here is the chart for American Airlines in 1995.

The cost for fuel and oil is $429 per block hour - 26% of the total cost.

We get a whole different picture for the year 2008.

Now American Airlines has to pay $2771 per block hour for fuel - a stunning 60% of the total, although the amount of fuel consumed per block hour went down from 957 to 940 gallons. This only slight decline in fuel burn shows why American now accelerated their B737-800 deliveries in the last two years. The MD-80 is fuel thirsty.

And now here is Southwest Airlines. The trend is the same:

In 1995 fuel cost were at 30% of direct operating costs. But the dollar value is about 13% less than the $492 paid by AA, as Southwest just burned 773 gallons per block hour and the total costs per flight hour were 14% lower at SWA.

And here are the SWA numbers for 2008:

 Fuel and oil costs are above 50%, but total costs are less than 60% of the costs of AA. Fuel burn per block hour was down by 9% compared to 1995 at 705 gallons, the rest of the difference is probably explainable by better fuel hedging at SWA.

I think from these charts we can understand the desire from many airlines to get more fuel efficient aircraft as soon as possible.

COC and DOC Part II

Airbus offers a "A320neo Fact Sheet on it's website for download here.
Apart from one obvious typo - the A321 is mentioned as the 2nd variant to become available, but that has changed to the A319 as the 2nd family member recently, there are a few "facts" - or claims- on that sheet that compare cash operating costs compared to today's A320 and the fuel burn of the A320neo with the B737-800W and the CS300. These can be compared to my assumptions made in a recent blog entry called "COC and DOC".

First claim: A320neo has 8% better cash operating costs than today's A320.
Fact check: In the recent blog entry I assumed 9.5% better cash operating costs for a fuel price of $3.00/gallon - 7.5% from lower fuel burn and about 2% from lower maintenance costs. With oil prices in the range of $3.20 as of today, cash operating costs are more like 10% better - so Airbus is not overly optimistic with the 8% assumption.

Second claim: A320neo has 16% less fuel burn per seat than the 737-800W.
Fact check: Assuming 15% reduced fuel burn per trip through the sharklets and the new engines and three more seats, the overall improvement in fuel burn per seat is (153/150)*15%= 15.3%.
If Airbus says that the A320neo is 16% better in fuel burn per seat than the B737-800W it implies that the A320 today would be 0.7% better than the B737-800W. I assmued they are on par, but I guess a difference of 0.7% does not really count.

Third claim: A320neo has the same fuel burn (per seat is obviously meant, though not stated) as the CS300.
Fact check: Let's assume 153 seats on the A320neo and 130 seats for the CS300 in a comparable cabin layout and the same seat pitch. This is a difference of 17.7%, so the fuel burn per trip can be 17.7% higher for the A320neo in order to have the same fuel burn per pax.
A report from AirInsight (The Business case for the CSeries) from last year has some fuel burn numbers. Without knowing exactly how accurate these are and also keeping in mind that AirInsight assumed 158 seats from the A320neo, let's have a look at them:
For a 500nm mission, AirInsight gets a fuel burn of

• 805 gallons for the CS300
• 910 gallons for the A320neo

The absolute difference is just 13%, so that the fuel burn per seat would be even lower for the A320neo. For a longer misson the relative difference should get a little bit larger though.

But a larger aircraft should burn less per pax anyway -so although the claim is OK as a fact, it only shows that the smaller CS300 is a step ahead - and the A319neo cannot compete on a per seat basis as it is comparable in seat capacity but a lot heavier.

Bottom line: Airbus is not making any false statements here -  but the facts presented are no new and eye-watering arguments...

Bernstein Research on GTF and LEAP-X

AirInsight has a post today about Bernstein Research thinks about the GTF. As I do not want to "cannibalize" AirInsight please read this post before continuing here...
So what can we take from this? The most important point for me:
CMC turbine blades availability slipped from 2018 to 2020!!! This means:

• That moving the EIS of the chinese C919 forward from 2018 to 2016 was a bad decision for CFM, as CFM was forced to speed up their development plan. But some technologies obviously need and take their time and can't be accelerated too much.
• That the 2016 LEAP-X engine for the C919 and the A320neo needs more turbine cooling than originally was planned with CMC turbine blades. As cooling air for the HPT blades is rather "expensive" (it is taken from one of the rear compressor stages), more cooling air means higher SFC.
• That the LEAP-X is not competitive with the GTF in terms of fuel burn (at least) until 2020.
• That a version of the LEAP-X for a potential B737RE would not yield an improvement good enough to keep pace with a GTF powered A320neo (at least in terms of fuel burn).
• That the LEAP-X with CMC blades would be ready "just in time" for a new Boeing aircraft in 2020. But 9 years ahead, who would count on that today?

If Bernstein Research is right about the CMC turbine blades, CFM has a big problem. To position the engine as the lower risk engine is "BS", as it is a new centerline engine as the GTF is - but the GTF neo-engine will benefit from the engines for the CSeries and the MRJ. LEAP-X is also running considerably hotter and this is always risky. So I do not see airlines will give them credit for lower risk.

As I wrote earlier, the litmus test for CFM will be a potential order for the A320neo from AirFrance-KLM, the decision from Virgin America and the anticipated order from AirAsia.

AirFrance interested in A320NEO - litmus test for LEAP-X

Reuters and others today report that AirFrance is interested in the A320NEO. As AirFrance is one of the largest Airbus customers (I think actually in second place right beghind Lufthansa), this is not a big story - but before Airbus actually launched the A320NEO, AirFrance ofiicials said that a pure reengining would not be good enough. So their mind must have changed.
What is more important is, that once AirFrance will eventually order the A320NEO, sooner or later they have to commit to one engine or another. And as AirFrance is up to now the most natural and loyal CFM customer you can imagine - CFM is 50% owned by the Safran and CFM did a version of the CFM56-5B customised for the A318 only on AirFrance's request - it would be a disaster for CFM if AirFrance would decide in favour of the GTF and clearly a sign that there is something "wrong" in the development of the LEAP-X.
An interesting thing to watch...