Moderators: richierich, ua900, PanAm_DC10, hOMSaR
SEPilot wrote:Here are some economic realities. The fact that the 737 continues to sell in large numbers means that it fulfills the needs of many customers, and Boeing is making money building them. The fact that the basic design is over 50 years old is completely irrelevant. The fact that the A320 is newer and is selling better is only slightly relevant. Boeing still has loyal and not-so-loyal customers who still buy the 737. The A320 is doing better, but Boeing still manages about a 40% market share.
MileHFL400 wrote:Sorry but a 737 replacement isn’t coming until there’s a massive step change in engine technology. As it stands now they would be investing billions for diminishing returns.
SteelChair wrote:SEPilot wrote:Here are some economic realities. The fact that the 737 continues to sell in large numbers means that it fulfills the needs of many customers, and Boeing is making money building them. The fact that the basic design is over 50 years old is completely irrelevant. The fact that the A320 is newer and is selling better is only slightly relevant. Boeing still has loyal and not-so-loyal customers who still buy the 737. The A320 is doing better, but Boeing still manages about a 40% market share.
Imagine possible investor day PowerPoint:
"We're happy with 40%."
"We're no longer the clear market leader."
"Our narrow body product is losing market share"
"All the best of 1968"
"We're not an airplane manufacturer, we're a tech company. 1960s tech."
"New tech is over rated, it doesn't pay its way onto the airplane."
SEPilot wrote:Here are some economic realities. The fact that the 737 continues to sell in large numbers means that it fulfills the needs of many customers, and Boeing is making money building them. The fact that the basic design is over 50 years old is completely irrelevant. The fact that the A320 is newer and is selling better is only slightly relevant. Boeing still has loyal and not-so-loyal customers who still buy the 737. The A320 is doing better, but Boeing still manages about a 40% market share.
texl1649 wrote:It is so tiresome the same cheerleaders constantly bashing Boeing for not replacing the 737, when it was their beloved Airbus who jumped into the A320NEO precisely to cut off the timeline for the 737 replacement which was pending launch. As bad as the 737Max has been the past two years, it has a huge backlog, SWA just ordered a bunch more, and UA is about to.
744SPX wrote:SteelChair wrote:SEPilot wrote:Here are some economic realities. The fact that the 737 continues to sell in large numbers means that it fulfills the needs of many customers, and Boeing is making money building them. The fact that the basic design is over 50 years old is completely irrelevant. The fact that the A320 is newer and is selling better is only slightly relevant. Boeing still has loyal and not-so-loyal customers who still buy the 737. The A320 is doing better, but Boeing still manages about a 40% market share.
Imagine possible investor day PowerPoint:
"We're happy with 40%."
"We're no longer the clear market leader."
"Our narrow body product is losing market share"
"All the best of 1968"
"We're not an airplane manufacturer, we're a tech company. 1960s tech."
"New tech is over rated, it doesn't pay its way onto the airplane."
The problem isn't so much the 1960's tech, as it is trying to shoehorn in 2010's tech, leaving you with the worst of both technologies. (and an ugly airplane to boot)
keesje wrote:Leeham news:“Boeing has to look at the future. What kind of airplanes that airlines will need with all the environmental challenges, regulatory challenges? What is the airplane type airlines will need 5, 10, 15, 20 years from now?” Hazy said.
“Boeing needs to invest. The 737 is a wonderful airplane, but it’s been in operation since 1967. We have an airplane that its basic design has been around for 54 years. It’s time for a new technology airplane that will give airlines and the public greater efficiency, better economics, better environmental footprint so the airlines can make money with it and yet meet the challenges that we’re facing on the environmental front.”
https://leehamnews.com/2021/06/14/ponti ... more-36736
I think increasingly people feel the 737 isn't good enough for even later this decade & becoming a poor investment for airlines, lessors.
zuckie13 wrote:Is he just mostly upset that he thinks Boeing could be selling a higher priced aircraft that he can make more money leasing to airlines?
mjoelnir wrote:SEPilot wrote:Here are some economic realities. The fact that the 737 continues to sell in large numbers means that it fulfills the needs of many customers, and Boeing is making money building them. The fact that the basic design is over 50 years old is completely irrelevant. The fact that the A320 is newer and is selling better is only slightly relevant. Boeing still has loyal and not-so-loyal customers who still buy the 737. The A320 is doing better, but Boeing still manages about a 40% market share.
Yes the age of the design is irrelevant. The fact that the A320 is selling better is actually the point. Does Boeing want to be competitive or not. If Boeing is satisfied with a shrinking share of the market, than the 737 will do. If Boeing wants to be the leader, they need something new.
MDC862 wrote:Ha, what is rhe current backlog for Boeing, 4,000 plus? Idealists want flash, new, and shiney. The 320 program is 35 years old, still selling and also has a hefty backlog. So much for customers ignoring this segment of the market.
jeffrey1970 wrote:Even if Boeing has a backlog of 737 orders I am sure many will get cancelled. Because of the pandemic the airlines financial situation has changed dramatically. Boeing is at it's best when they listen to the needs of their customers.
TexStones wrote:At the risk of being shouted down by The Vocal Few, this infrequent poster/frequent reader will offer an opinion on the 737 situation. In no particular order, here are a few bullet points.
7) The new NB aircraft will be built in Everett. The Renton facility will be transitioned to a WB product that will share much of the engineering from the 737 replacement.
I
davidjohnson6 wrote:Boeing is unlikely to spend over $10bn on a new aircraft without giving stockholders the chance to vote on it first. The vote may be a formality... but the board will want to gain sone sort of formal consent for such a program
texl1649 wrote:It is so tiresome the same cheerleaders constantly bashing Boeing for not replacing the 737, when it was their beloved Airbus who jumped into the A320NEO precisely to cut off the timeline for the 737 replacement which was pending launch. As bad as the 737Max has been the past two years, it has a huge backlog, SWA just ordered a bunch more, and UA is about to.
Meanwhile, just a little context for SUH and ALC, he had a huge order for Max, cancelled/converted some to 787's during covid insanity 2020 (still has over a hundred on order), and is clearly in a negotiating process for how many to re-instate/pricing/delivery/shuffling their order book as short haul flying is returning a lot faster than long haul for lease customers. Throwing cold water publicly on residual/value in this process is a bit STC of him, but not real surprising. All car salesmen want an exciting new model customers get excited about, it doesn't mean they know how/when/why the mfg really does an all new chassis/model.
https://www.bloomberg.com/news/articles ... clearances
TexStones wrote:At the risk of being shouted down by The Vocal Few, this infrequent poster/frequent reader will offer an opinion on the 737 situation. In no particular order, here are a few bullet points.
5) WN is the Alpha Customer for the new NB aircraft. Boeing will follow their lead. Watch them closely for clues..
sxf24 wrote:SteelChair wrote:ILNFlyer wrote:Everyone knows the 737 needs replacement - even Boeing. The basic problem remains - with what? The primary driver of efficiency is the engines. It already has the best available under the wings. So they could upgrade the the flight system to FBW. Again, to what advantage? Is this going to result in a substantive enough efficiency gain to offset the investment and increased cost? Why should Boeing invest $10B+ on an aircraft which will not see a substantive gain in efficiency great enough to leap-frog the 320NEO.
Doesn't the GTF have a fuel burn advantage on the LEAP? Thus, the best engine won't actually wont even fit under the wing, because the wing box/landing gear interface are too small. Thus, advantage A321.
I suppose one could argue that CFM is generally more reliable than PW, this obviating the fuel burn advantage. Taking this argument (which is yet to be proved on these particular engines) might make the LEAP the "best."
PW makes GTF with different diameters and there's no technical reason why Boeing couldn't have offered with the 737.
Max Q wrote:Boeing HAS to make the Max a winning program, it’s not just about restoring their good name but they need to buy time while new technologies mature, particularly engines
This is going to be a few years, it would be senseless to start developing a clean sheet 737 replacement now without a step change in engine efficiency
Furthermore they seriously need to make some money, they’re massively in debt right now, making the Max as profitable as possible and paying down as much of that debt as possible should be their priority
Development of the 737 replacement can continue in the background while engine development continues
A higher priority is a 757 replacement to go up against the A321XLR
Max Q wrote:Boeing HAS to make the Max a winning program, it’s not just about restoring their good name but they need to buy time while new technologies mature, particularly engines
This is going to be a few years, it would be senseless to start developing a clean sheet 737 replacement now without a step change in engine efficiency
Furthermore they seriously need to make some money, they’re massively in debt right now, making the Max as profitable as possible and paying down as much of that debt as possible should be their priority
Development of the 737 replacement can continue in the background while engine development continues
A higher priority is a 757 replacement to go up against the A321XLR
Revelation wrote:sagechan wrote:The marginal improvement is the key restriction since Boeing went ahead with the MAX. Without new engine tech or some sort of materials or aerodynamic design breakthrough its hard to make a case for a new clean sheet. The duopoly also reduces the desire for big new programs. With all that said, high backlogs of the current products isn't that important to the discussion since there aren't other options and fleets need replaced and in normal trends growth needs to happen, so there will always be sales of what's available.
As above it is starting to feel the new engine tech for at least shorter range flights will be a UDF with SAF or H2 as fuel because the biggest engine maker is putting money into developing just that. Their time frame is ~2035 which is about when most people thought we'd see a true need for new clean sheets. It'll be interesting to see how A and B incorporate that into their planning.
seahawk wrote:Both rolled the dice with the NEO and the MAX and while it seems like the MAX will be second to the NEO, it is still strong enough to capture 40% of the market share. Sometimes you win, sometimes you loose, but it still is enough to make a healthy profit for Boeing. Airbus and Boeing would only bankrupt each other if both would constantly aim to be the leader in each market segment.
The 757 replacement market has sailed, the A321NEO won. They can not really make a direct competitor without replacing the MAX and they can not make a twin aisle without hurting the 787.
Weatherwatcher1 wrote:mjoelnir wrote:SEPilot wrote:Here are some economic realities. The fact that the 737 continues to sell in large numbers means that it fulfills the needs of many customers, and Boeing is making money building them. The fact that the basic design is over 50 years old is completely irrelevant. The fact that the A320 is newer and is selling better is only slightly relevant. Boeing still has loyal and not-so-loyal customers who still buy the 737. The A320 is doing better, but Boeing still manages about a 40% market share.
Yes the age of the design is irrelevant. The fact that the A320 is selling better is actually the point. Does Boeing want to be competitive or not. If Boeing is satisfied with a shrinking share of the market, than the 737 will do. If Boeing wants to be the leader, they need something new.
The A320 isn’t actually selling better this year. It has a bigger backlog, but if we look at 2021 (which I assume you meant since you said “is selling” and not “has sold”) there are 316 737 orders vs 68 A320NEO orders this year.
Both rolled the dice with the NEO and the MAX and while it seems like the MAX will be second to the NEO, it is still strong enough to capture 40% of the market share. Sometimes you win, sometimes you loose, but it still is enough to make a healthy profit for Boeing. Airbus and Boeing would only bankrupt each other if both would constantly aim to be the leader in each market segment. .
kiowa wrote:744SPX wrote:SteelChair wrote:
Imagine possible investor day PowerPoint:
"We're happy with 40%."
"We're no longer the clear market leader."
"Our narrow body product is losing market share"
"All the best of 1968"
"We're not an airplane manufacturer, we're a tech company. 1960s tech."
"New tech is over rated, it doesn't pay its way onto the airplane."
The problem isn't so much the 1960's tech, as it is trying to shoehorn in 2010's tech, leaving you with the worst of both technologies. (and an ugly airplane to boot)
I agree with your points but the 737 is still 1960s tech. It needs to be replaced if Boeing wants to stay competitive.
SEPilot wrote:kiowa wrote:744SPX wrote:
The problem isn't so much the 1960's tech, as it is trying to shoehorn in 2010's tech, leaving you with the worst of both technologies. (and an ugly airplane to boot)
I agree with your points but the 737 is still 1960s tech. It needs to be replaced if Boeing wants to stay competitive.
The wheel is 3000 BC tech but we still use it. The age of any technology is not the issue. The issue is can you improve on it, and at what cost? If the cost outweighs the gain it is not worth doing. To be specific, let’s just say that Boeing sells a 737MAX8 for $80 million (just a WAG). They design and build the 797-8 that their accountants say must be sold for $100 million in order to make a profit. It only offers about 5% improvement in CASM. Meanwhile the A320NEO can be had for $81 million, and is within 4% CASM. How many airlines are going to pay that price premium? My guess is not many. Should Boeing build it anyway and sell it at a loss? Meanwhile Airbus bides their time, waits for new technology to mature and 5 years later comes out with the A360 that offers a 15% improvement in CASM that they can sell for $90 million. Where does that leave Boeing? Much worse off than they are now.
Max Q wrote:Boeing HAS to make the Max a winning program, it’s not just about restoring their good name but they need to buy time while new technologies mature, particularly engines
This is going to be a few years, it would be senseless to start developing a clean sheet 737 replacement now without a step change in engine efficiency
Furthermore they seriously need to make some money, they’re massively in debt right now, making the Max as profitable as possible and paying down as much of that debt as possible should be their priority
Development of the 737 replacement can continue in the background while engine development continues
A higher priority is a 757 replacement to go up against the A321XLR
seahawk wrote:As the competition is not more climate friendly or efficient, the 737 is just fine. And yes, a 737 won´t cut it in 2045, but neither would an A320.
LAX772LR wrote:texl1649 wrote:the 737 replacement which was pending launch.
There was no launch of anything "pending."davidjohnson6 wrote:Boeing is unlikely to spend over $10bn on a new aircraft without giving stockholders the chance to vote on it first. The vote may be a formality...
Of course it is, seeing as they'd be about 2 degrees removed from an actual executive decision.ILNFlyer wrote:So they could upgrade the the flight system to FBW.
Not if they want to call the resultant product a 737.
No way the FAA in its current state would certify such a change, especially on the model that's already been a stake for their reputation's head.
keesje wrote:I think 40% marketshare might be optimistic this decade. On top of that price/ margin is essential.
SteelChair wrote:keesje wrote:I think 40% marketshare might be optimistic this decade. On top of that price/ margin is essential.
I agree and that's really the point. Boeing was losing market share even before the pandemic and the MAX debacle. I get all the arguments about the economics of a new airplane being prohibitive, but how long can Boeing languish? Eventually, there will be spillover into the wide body segment due to pilot efficiencies, Airbus will gain an advantage with airline customers due to their narrow body dominance.
Southwest is doing what is best for Southwest, not Boeing. They're successful and a good customer, but they're only one customer.
astuteman wrote:Max Q wrote:Boeing HAS to make the Max a winning program, it’s not just about restoring their good name but they need to buy time while new technologies mature, particularly engines
This is going to be a few years, it would be senseless to start developing a clean sheet 737 replacement now without a step change in engine efficiency
Furthermore they seriously need to make some money, they’re massively in debt right now, making the Max as profitable as possible and paying down as much of that debt as possible should be their priority
Development of the 737 replacement can continue in the background while engine development continues
A higher priority is a 757 replacement to go up against the A321XLR
I sort of agree, insofar as Boeing have now nailed their colours firmly to the MAX.
It is demonstrating a good recovery that could be, and was, predicted.
It was always pretty clear that the likes of WN and FR were going to re-inject momentum.
They are also injecting that momentum across the range, including the 737-7 (WN) and 737-10 (FR)
I think Boeing will work really hard to get the MAX fully recovered.
So I think NSA is on the back-burner for now.
As far as the 757 goes, I have to pinch myself sometimes.
How many 757's were actually doing the "specialist" sectors (like long-range TATL, or hot and high)?
I suspect the vast majority of former 757 sectors are already being covered off by bog standard A321/A321NEO's, 737-900Er's, 737-9's and soon 737-10
The A321XLR seems to solicit extreme responses, from "it's a niche product" to "its the new wunderkind".
I get the impression there is an emotional response to the "new 757 being an Airbus" sort of thing from both sides.
Reality is that it doesn't matter.
The A321XLR is a fabulous product from the viewpoint of a "bang-for-buck" leverage of the base A321into a different market niche
But in terms of the OVERALL market, I think it's a marginal gain in terms of overall sales and revenue.
Once the 737-10 is up and running, Boeing will need to decide whether it is worth bothering with a new frame to cover off a marginal market, or just keep their powder dry and milk the 737-10
I'll put my cards on the table - I don't see an all-new programme from either manufacturer this decade.
And I don't think it will matter, except to us as enthusiasts.
I think the 737-10 will do well.
Rgds
seahawk wrote:SteelChair wrote:keesje wrote:I think 40% marketshare might be optimistic this decade. On top of that price/ margin is essential.
I agree and that's really the point. Boeing was losing market share even before the pandemic and the MAX debacle. I get all the arguments about the economics of a new airplane being prohibitive, but how long can Boeing languish? Eventually, there will be spillover into the wide body segment due to pilot efficiencies, Airbus will gain an advantage with airline customers due to their narrow body dominance.
Southwest is doing what is best for Southwest, not Boeing. They're successful and a good customer, but they're only one customer.
Boeing had a dominance in the single aisle market for decades, still Airbus not only managed to sell A320s, they also managed to sell their widebodies.
brindabella wrote:seahawk wrote:SteelChair wrote:
I agree and that's really the point. Boeing was losing market share even before the pandemic and the MAX debacle. I get all the arguments about the economics of a new airplane being prohibitive, but how long can Boeing languish? Eventually, there will be spillover into the wide body segment due to pilot efficiencies, Airbus will gain an advantage with airline customers due to their narrow body dominance.
Southwest is doing what is best for Southwest, not Boeing. They're successful and a good customer, but they're only one customer.
Boeing had a dominance in the single aisle market for decades, still Airbus not only managed to sell A320s, they also managed to sell their widebodies.
Sadly, the massive fine against AB for corruption may point to a reason for some of that success.
MDC862 wrote:Ha, what is rhe current backlog for Boeing, 4,000 plus? Idealists want flash, new, and shiney. The 320 program is 35 years old, still selling and also has a hefty backlog. So much for customers ignoring this segment of the market.
brindabella wrote:astuteman wrote:Max Q wrote:Boeing HAS to make the Max a winning program, it’s not just about restoring their good name but they need to buy time while new technologies mature, particularly engines
This is going to be a few years, it would be senseless to start developing a clean sheet 737 replacement now without a step change in engine efficiency
Furthermore they seriously need to make some money, they’re massively in debt right now, making the Max as profitable as possible and paying down as much of that debt as possible should be their priority
Development of the 737 replacement can continue in the background while engine development continues
A higher priority is a 757 replacement to go up against the A321XLR
I sort of agree, insofar as Boeing have now nailed their colours firmly to the MAX.
It is demonstrating a good recovery that could be, and was, predicted.
It was always pretty clear that the likes of WN and FR were going to re-inject momentum.
They are also injecting that momentum across the range, including the 737-7 (WN) and 737-10 (FR)
I think Boeing will work really hard to get the MAX fully recovered.
So I think NSA is on the back-burner for now.
As far as the 757 goes, I have to pinch myself sometimes.
How many 757's were actually doing the "specialist" sectors (like long-range TATL, or hot and high)?
I suspect the vast majority of former 757 sectors are already being covered off by bog standard A321/A321NEO's, 737-900Er's, 737-9's and soon 737-10
The A321XLR seems to solicit extreme responses, from "it's a niche product" to "its the new wunderkind".
I get the impression there is an emotional response to the "new 757 being an Airbus" sort of thing from both sides.
Reality is that it doesn't matter.
The A321XLR is a fabulous product from the viewpoint of a "bang-for-buck" leverage of the base A321into a different market niche
But in terms of the OVERALL market, I think it's a marginal gain in terms of overall sales and revenue.
Once the 737-10 is up and running, Boeing will need to decide whether it is worth bothering with a new frame to cover off a marginal market, or just keep their powder dry and milk the 737-10
I'll put my cards on the table - I don't see an all-new programme from either manufacturer this decade.
And I don't think it will matter, except to us as enthusiasts.
I think the 737-10 will do well.
Rgds
To your last prediction - do I hear echoes of the long-running debate about the NMA being the (necessary) vehicle to learn how to do the NSA?
(If so I am still weighing your insights on that - and waiting to see how the T7 turns out once volume production begins. Will be fascinating)....
cheers
keesje wrote:brindabella wrote:seahawk wrote:
Boeing had a dominance in the single aisle market for decades, still Airbus not only managed to sell A320s, they also managed to sell their widebodies.
Sadly, the massive fine against AB for corruption may point to a reason for some of that success.
Brindabella, do you have any sources to support your aquisation? It looks rather opportunistic & cheap. Thanks
astuteman wrote:I watched the schedule and cost of the most complex product ever created by the mind and hand of humankind get absolutely nailed out of the box in the '80's.
Rgds