He goes on to discuss NMA vs FSA vs doing nothing. He seems to be favoring FSA but is concerned that Boeing will do nothing which will help the balance sheet in the short term but give it nothing of interest to sell in the mid to long term.
It is more difficult to build a capable small size aircraft than building a medium-size aircraft. Obviously Boeing will pick the latter. More seats, less CASM, you know the drill.
Also, they have to realize there is no money to be made in the VLA segment. With A380 withdrawal, Boeing may be feeling "we have arrived". At this point how many copies 77X will sell is less important, and to stop spending resources of any kind on the project is more important.
I think UA's order for 50 A321XLR is a good proof point that the A321 has won the 757 size segment and Boeing will need to go to the 762/763 size category to find a market.
If they try to compete head on with A321, Airbus will win on price and compatibility. If they go bigger, Airbus will have to invest to follow and still have a price advantage but Boeing can address that to a reasonable degree with new tech, growth potential, and 787 compatibility.
Thanks for the link to the article. I do have a reservation around his characterisation of the market segments.
I personally don't believe that the runaway success of the A321NEO is clear evidence that "NMA space is where the growth is".
Out of the 3 200 A321NEO sold, only 400 are XLR variants that can be said to sit at the bottom of NMA space.
The rest are cooking A321NEO's with a real world capacity and range well below that of the 757.
Why do I think this is important?
Because I believe that NMA is less a gap in the market, and more just a gap, full stop.
I believe it is a structural characteristic of the market between narrowbodys and widebodys that won't disappear.
I have always thought it was folly for Boeing to launch a dedicated all new model at the space.
So the only logic left is to "stretch" the narrowbodys into this space IMO.
The 737 won't go there, though - it struggles to be competitive in cooking A321NEO space.
All of which makes the A320NEO more appealing overall as a family.
The article linked upthread by Scrimbl was interesting.
No surprise that Boeing are floating FSA in front of airlines.
I bet Airbus are too - that's how they obtain market intelligence.
What fascinated me was the reasons attributed to Boeing - overordering by lessors and key airline customers.
Those are not good messages for the MAX IMO.
It has been pointed out that the MAX backlog is 4 500 aircraft, but it isn't really.
400 of those have already been built and parked up
The MAX will secure more orders, that I don't doubt. I have confidence that the IAG LOI will be realised, for example.
The worry I think is how many conversions or cancellations we might see, facilitated by Boeing being in breach of contract terms now.
we have already seen both outright cancellations and conversions to 787.
The 737 MAX backlog might not be as resilient as it might appear.
That's the context I think the "overordering by lessors and key airline customers" might be considered in.
FSA might not sound too adventurous, but properly executed, Boeing could do to the NEO what the NEO has done to the MAX, by giving it the flexibility to have bigger diameter engines and longer fuselages - e.g. longer landing gear, wider aisle, potential for folding wingtips.
A strategy of launching an initial FSA model that is, say, a tiny bit bigger than the A321, and thus slightly differentiated is a starting point, and I think would lead to volumes that NMA will never see.
This could be followed by a bigger model going further into NMA space than the A320NEO family is able to go.
The 737-8 could be left intact for now - it is easily the most popular MAX, and eventually replaced by a smaller FSA model at a time that is convenient to Boeing
This FSA would ultimately achieve the "commoditisation" that you rightly characterised some time ago, and would put the monkey back on Airbus.
Airbus would then have the choice of
a) the NEO becoming the new MAX
b) launching a new product
But I think there is a strategy route through for Boeing that can move them back onto the front foot.