User avatar
qf789
Moderator
Topic Author
Posts: 8880
Joined: Thu Feb 05, 2015 3:42 pm

Boeing MOM Update Part 2

Thu Apr 21, 2016 5:21 am

Continue discussion here

Boeing MOM Update (by glbltrvlr Apr 14 2016 in Civil Aviation)
Forum Moderator
 
User avatar
enzo011
Posts: 1686
Joined: Tue Jun 21, 2011 8:12 am

RE: Boeing MOM Update Part 2

Thu Apr 21, 2016 6:21 am

From previous thread:


Quoting tortugamon:
To suggest that if either OEM launches a program that won't make money but will probably breakeven - will ultimately bankrupt either company making $3-5 Billion in profit every year is fairy tale. It has no basis in reality. I get we aren't all business/economics minded people here but we shouldn't pretend to be either. People might believe it.

Read what he is saying. If the NSA is 4 years late, billions over budget in R&D spending and billions in deferred cost, it could lead to Boeing's demise.

Quoting Stitch:
Well before the A320 launched, the 737 Classic had pretty much a stranglehold. But it was the Classic losing RFPs to the A320 that pushed Boeing to go to the 737 Next Generation.
Quoting Stitch:
But NG/Max are not losing marketshare in large percentages across the board to ceo/neo.

The 737-800NG and 737-8 comfortably hold their own against the A320-200(neo). In fact, they may be the better-sellers in the end.

It's the top-end where the 737-9(00ER) can't compete effectively against the A321-200(neo) and while that market looks to be growing at the moment, by how much and for how long?

If it is growing significantly, the 737-9 should win orders just on availability, much less suitability to mission (and it's still suitable for a fair number of missions). They may take only 20-30% of that market, but it would still be a large number of planes based on the overall size of said market.

If it is not growing significantly, by the time Boeing arrives with an all-new design, will Airbus have already absorbed most of the market due to earlier (and sufficient) availability? Then Boeing has to tread water for a decade waiting for the next round of replacement cycles to secure orders.

It was going to be inevitable that a company that has the majority share will lose it once a competitor comes along. How much they lose is up to the company, if their product is priced to compete and their product is equal, you would expect it to be around 50%. Yet we have seen a steady decrease of the share and it will eventually be around 55%-45% total once either model is discontinued in favour of Airbus. This would mean that since the A320 launch the share will be around 60%-40% in favour of Airbus. This doesn't seem competitive, it could be argued the 737 is vying for scraps that Airbus cannot deliver or the loyal customers that will not switch (WN and Ryanair). Fatty and heavy scraps, but still scraps from the table.

Regarding the 738 and A320 and this model being able to fight with the A320 and the A321 being the difference. I think we have to look at the 739 and its slow sales. This has, IMO, pushed more sales to the 738 where Airbus has seen more sales between their models. So we have a inflated view of 738 sales because it is so close in capacity to the 739, some airlines decide to not even look at the bigger model, whereas the Airbus sales are split more between their models.

So when the argument is made that the 738 is better than the A320-200, I think you have to remember that it may just take all the sales from an order because of the 739 issues, but the A321 actually does take sales away from its smaller sibling.
 
User avatar
CARST
Posts: 1546
Joined: Tue Jul 25, 2006 11:00 pm

RE: Boeing MOM Update Part 2

Thu Apr 21, 2016 6:40 am

Going with what Stich said and assuming the 737-8 and -7 are doing "okay" against the A319 and A320 and also assuming it is staying this way for the next 10 years, I could see Boing keeping the 737 line open and doing a MOM plane above the 737 size.


This way the MOM plane could not be a 180-220-250 seater, but a 220-250-280 seater or something like that. Basicly covering the A321, 757, A300, 767 and (despite never been produced) 787-3 market. And then I could see this MOM plane being designed as a widebody...


This plane, produced with just one wing, structure and fuel tanks for all three sizes, could have a 4000nm range for the smallest size (210 seats) and about 2500nm range for the largest size (280/300 seats). It would be a niche TATL plane (75W/A321LR) for all the thin routes out there and a people hauler for mass markets in the largest size (Asia regional, US hub-to-hub, etc.)...
 
Amiga500
Posts: 2316
Joined: Tue Mar 03, 2015 8:22 am

RE: Boeing MOM Update Part 2

Thu Apr 21, 2016 9:48 am

I'll try to answer these as best I can, but bear with me if I make a balls of the quoting!

Quoting Stitch:
Actually they'd have lost billions between 1995-2005 thanks to 9/11 and SARs. So they would have started making money in 2006. And Airbus likely would have jumped themselves and had a competing narrowbody in place, denying Boeing the ability to charge a premium anymore.

NSA in 1995 would have been a bigger one.

They would have instead likely shared the top-end of the market with the A321, but at a much higher cost than Airbus expended to do so.

Why would they have lost billions?
The NG was launched in 1993 and EIS in 1998.
The 777 was launched in 1990 and EIS in 1995.

A NSA launched in 1993 would not have been significantly later than the NG! Yes, it would have been more heavily resourced and would have cost more in R&D, but timelines wouldn't have shifted.

The 737-900 and -90ER have a total of around 565 orders. The A321ceo (NOT NEO) has a total of around 1,600 orders. Thats a share of 74:26 to Airbus! FOR THE CEO vs NG.


Since 1995, Boeing have had to invest (heavily) in the 737 airframe TWICE to keep it competitive with the A320 family.
They've had to cede the 737-900/900ER/9 market to the A321CEO/NEO as a result.

The money they'd have spent on NSA then would probably have been less than NG+MAX. Furthermore, it would have captured many more orders in the A321 segment at a higher premium than -900/900ER/9 has been able to achieve and would have led to more profit as a result - only that profit delta wouldn't have started to really become noticable till 2005ish.

Quoting DfwRevolution:
You and WIederling should enjoy a beer together. Afterwards, you can tell me which aircraft has a "pure" supercritical wing. All production supercritical wings are a compromise between laboratory concept and real-world design.

Yet all evidence* points to the A320 being the better wing. Despite being a decade older in design.

*Heavier airframe burning less fuel.

So elements of doesn't equate to full supercriticality.

Quoting DfwRevolution:

I understood you perfectly, but you don't understand net present value. By your own judgement, launching NSA in the 1990s would have been either negative NPV or greatly reduced NPV versus the 737NG. Dollars in the near-term are worth more than dollars in the long-term. Launching a program with lower NPV in the 1990s would have left Boeing with fewer resources to compete in 2016. You always take the "easy profit," especially when you can do so for another quarter century.

Careful now. You talk about NPV then go on to argue completely in opposite of it.

MAX + NG is probably around or equal to the cost of an NSA! Even if you want to argue its not, thats fine. Add the profit gained from more orders/better premiums to the sums and the NSA instead of NG would clearly have been the way they should have went go.

In addition to that, there is nothing right now that says Airbus won't do a neo2 in 2025-2030. An NSA would have allowed Boeing to match that at minimum time/cost. Instead they are faced with either MAX2 or NSA as a response.
 
dare100em
Posts: 275
Joined: Tue Dec 23, 2014 9:31 am

RE: Boeing MOM Update Part 2

Thu Apr 21, 2016 11:07 am

Quoting CARST (Reply 2):
Going with what Stich said and assuming the 737-8 and -7 are doing "okay" against the A319 and A320 and also assuming it is staying this way for the next 10 years, I could see Boing keeping the 737 line open and doing a MOM plane above the 737 size.


This way the MOM plane could not be a 180-220-250 seater, but a 220-250-280 seater or something like that. Basicly covering the A321, 757, A300, 767 and (despite never been produced) 787-3 market. And then I could see this MOM plane being designed as a widebody...


This plane, produced with just one wing, structure and fuel tanks for all three sizes, could have a 4000nm range for the smallest size (210 seats) and about 2500nm range for the largest size (280/300 seats). It would be a niche TATL plane (75W/A321LR) for all the thin routes out there and a people hauler for mass markets in the largest size (Asia regional, US hub-to-hub, etc.)...

That summs it up where Boeing seems to go ATM.

While this MOM won't really "solve" the single-aisle problem and leave the A321 mostly unchallengend it will definitely cover ALL the marked of the 757/767/A300/A310/A330-size and even the 787-8 minus some range capabilities. This is definitely a huge marked.

It furthermore avoids trouble regarding the MAX-investment. The main challanges are technological (small TWIN), but that could be solved and a larger - probably oval - fuse has benifites against a single aisle too. For higher capacities it will be more efficient regarding bending loads, it will be better regarding a larger wingbox (more space to connect it to the fuse) and will be more harmonic with large engines --> less weight.

Yes even the smallest member will be 15t heavier than a A321 but regarding any other plane it will be much lighter, especially lighter than the A330. That will leave Airbus with the A350 in the widebody space in the long run.

The main critical problem I see is to build this plane (the smallest member) not more than say 20-25% expensive than an A321. AND that is very, very challanging. This is the core task IMO, not the marked nor the technology, but it has to avoid at any price to reach A330 cots levels.
 
User avatar
CARST
Posts: 1546
Joined: Tue Jul 25, 2006 11:00 pm

RE: Boeing MOM Update Part 2

Thu Apr 21, 2016 11:52 am

Quoting dare100em (Reply 4):
The main critical problem I see is to build this plane (the smallest member) not more than say 20-25% expensive than an A321.

I am no expert on this. Does a small widebody in the 752+ size really have to be 20-25% more expensive than the A321?

The A321 is old tech with new engines. A 797 would be new tech with new engines, lighter frame in relation to an old generation frame. My amateur thoughts...
 
User avatar
Stitch
Posts: 26372
Joined: Wed Jul 06, 2005 4:26 am

RE: Boeing MOM Update Part 2

Thu Apr 21, 2016 1:09 pm

Quoting enzo011 (Reply 1):
This would mean that since the A320 launch the share will be around 60%-40% in favour of Airbus. This doesn't seem competitive, it could be argued the 737 is vying for scraps that Airbus cannot deliver or the loyal customers that will not switch (WN and Ryanair). Fatty and heavy scraps, but still scraps from the table.

40% of a 1200-frame annual market is almost 500 frames. Hardly what I would call "scraps".

Honestly, this is all starting to sound like the financial and technical media's reporting of Apple. Even though they make scores of billions a year in profit, they're always on the edge of bankruptcy because the iPhone is not the most popular model of smartphone on the market.  

Boeing is looking at production increases for the MAX. They're not doing that out of hope they can sell more, but because they're having discussions with customers who have expressed a strong interest in buying the plane. Maybe that interest is driven by them preferring the A320neo but not being able to get it because Airbus can't make any more, but it's still strong interest in buying MAX.

And for all the comments that Boeing is "giving away" 737s to fill unsold production slots, it appears that there is demand for those slots at a price above "free".



Quoting enzo011 (Reply 1):
I think we have to look at the 739 and its slow sales. This has, IMO, pushed more sales to the 738 where Airbus has seen more sales between their models. So we have a inflated view of 738 sales because it is so close in capacity to the 739, some airlines decide to not even look at the bigger model, whereas the Airbus sales are split more between their models.

The 737-900 could not seat more passengers than the 737-800 in a single-class configuration due to lack of the necessary exit doors so single-class operators instead went to the 737-800 because it was lighter and had better performance.

The 737-900ER addressed that shortcoming and while it is indeed trailing far behind the A321-200 (which has been on the market for a significantly longer period of time), it has sold 10x what the 737-900 has.



Quoting Amiga500 (Reply 3):
Why would they have lost billions?
The NG was launched in 1993 and EIS in 1998.
The 777 was launched in 1990 and EIS in 1995.

A NSA launched in 1993 would not have been significantly later than the NG! Yes, it would have been more heavily resourced and would have cost more in R&D, but timelines wouldn't have shifted.

Boeing's production systems melted down in 1997. The 737NG, which was based significantly on an existing design, was hobbled significantly. An all-new narrow body would have been affected far worse. The 777 went over budget by a factor of two due to the changes in Boeing's design tools made at the same time. This would have assuredly impacted NSA as well, so one can conservatively estimate that it's budget would have doubled, as well.

I do not believe Boeing would have been a position to have NSA serial production anywhere near to the level 737NG production was within the same period, pushing NSA deliveries out and at risk when 9/11 and SARS hit. The plane also would have been much more expensive on a per-frame basis than the 737NG to produce, meaning it would have had to sell for a much higher Average Sales Price.
 
User avatar
seahawk
Posts: 8700
Joined: Fri May 27, 2005 1:29 am

RE: Boeing MOM Update Part 2

Thu Apr 21, 2016 2:51 pm

Quoting CARST (Reply 5):
I am no expert on this. Does a small widebody in the 752+ size really have to be 20-25% more expensive than the A321?

Look at the price Boeing wanted from UA for the 737NGs. Even if they accepted a small loss, this is a number. Sure a A321 is longer and all this, but the whole supply and production chain is equally optimized, in place and running at full speed, while the development costs that need to be compensated are minor and probably paid for 10 times by the current orders. To be honest I can not even see how you could built a wide body that matches the performance expectations and be less than 50% more expensive than a A321.
 
User avatar
jambrain
Posts: 156
Joined: Sat Sep 06, 2008 8:52 am

RE: Boeing MOM Update Part 2

Thu Apr 21, 2016 6:53 pm

Quoting CARST (Reply 5):
I am no expert on this. Does a small widebody in the 752+ size really have to be 20-25% more expensive than the A321?

If you look at at CASM on narrow-bodies than 25% higher price / lease rate would need a > 30% reduction in Fuel burn.

I can't see what current tech new product would achieve that combination.

This article has ($3291) lease per flight > fuel cost per flight. ($2716) for a A321NEO
http://airwaysnews.com/blog/2016/02/05/a320neo-vs-737-max-pt-ii/

This is why I think B would have been better off making the gear longer to fit a GTF and extending the 738 3 rows to be between the A320 and A321 with the 737-7 just below the A320. (I don't see the 3rd model in the range working, too much compromise so I would kill the -9)
Jambrain
 
User avatar
enzo011
Posts: 1686
Joined: Tue Jun 21, 2011 8:12 am

RE: Boeing MOM Update Part 2

Thu Apr 21, 2016 6:56 pm

Quoting Stitch (Reply 6):
40% of a 1200-frame annual market is almost 500 frames. Hardly what I would call "scraps".

Honestly, this is all starting to sound like the financial and technical media's reporting of Apple. Even though they make scores of billions a year in profit, they're always on the edge of bankruptcy because the iPhone is not the most popular model of smartphone on the market.  

Boeing is looking at production increases for the MAX. They're not doing that out of hope they can sell more, but because they're having discussions with customers who have expressed a strong interest in buying the plane. Maybe that interest is driven by them preferring the A320neo but not being able to get it because Airbus can't make any more, but it's still strong interest in buying MAX.

And for all the comments that Boeing is "giving away" 737s to fill unsold production slots, it appears that there is demand for those slots at a price above "free".

Well I did state fatty scraps though. If Airbus is dining on Wagyu beef then Boeing is dining on good Sirloin steaks. It still tastes nice on the Boeing side, but is just isn't the same as Airbus though. 
Quoting Stitch (Reply 6):
The 737-900 could not seat more passengers than the 737-800 in a single-class configuration due to lack of the necessary exit doors so single-class operators instead went to the 737-800 because it was lighter and had better performance.

The 737-900ER addressed that shortcoming and while it is indeed trailing far behind the A321-200 (which has been on the market for a significantly longer period of time), it has sold 10x what the 737-900 has.

Okay, but do you think we are seeing more 738 sales because it is such a good design, or because the 739 is lacking against the competition? With only 15 more seats than the 738 it's not always worth it paying the premium for the more expensive aircraft. You could see the 738 numbers "padded" because the 739/739ER is losing sales not just to the A321 but to the 738. Hence could we look at the 738 as a great aircraft, but one having more sales than it would have had if the 739 was longer and offered more as the A321 does against the A320?
 
User avatar
Stitch
Posts: 26372
Joined: Wed Jul 06, 2005 4:26 am

RE: Boeing MOM Update Part 2

Thu Apr 21, 2016 7:17 pm

Quoting enzo011 (Reply 9):
Okay, but do you think we are seeing more 738 sales because it is such a good design, or because the 739 is lacking against the competition?


There was no compelling reason for a single-class operator to buy the 737-900 over the 737-800, which is why the 737-900 primarily sold to two-class operators like Alaska, United (Continental), Korean and Jet Airways. But in that configuration, it offered more total seats than the 737-800 so I am of the opinion that the 737-800 has sold because it is a good design. not because the 737-900 was a "bad" design.



Quoting enzo011 (Reply 9):
With only 15 more seats than the 738 it's not always worth it paying the premium for the more expensive aircraft.

It depends on the trip costs vs. potential revenue. The stretch often has a similar trip cost to the smaller frame, so the potential revenue can tilt the decision in favor of the larger frame even if the purchase price is higher.


Quoting enzo011 (Reply 9):
You could see the 738 numbers "padded" because the 739/739ER is losing sales not just to the A321 but to the 738. Hence could we look at the 738 as a great aircraft, but one having more sales than it would have had if the 739 was longer and offered more as the A321 does against the A320?

Well the 737-900 only sold ~50 copies, so that is 0.01% of the 737-800's ~5000 orders. That is not padding. That is a rounding error.  
 
User avatar
enzo011
Posts: 1686
Joined: Tue Jun 21, 2011 8:12 am

RE: Boeing MOM Update Part 2

Thu Apr 21, 2016 7:26 pm

Quoting Stitch (Reply 10):

I am sure because of my laziness in writing my view is getting muddled. When I post 739 I mean not just the 737-900, but the 737-900ER and the 737-900MAX.

Quoting Stitch (Reply 10):
It depends on the trip costs vs. potential revenue. The stretch often has a similar trip cost to the smaller frame, so the potential revenue can tilt the decision in favor of the larger frame even if the purchase price is higher.

This just shows the 739 (in all variants) in a bad light as well. Even with more seats and what really should only be slightly higher cost it is still outsold by its competitor and its smaller sibling.
 
User avatar
Stitch
Posts: 26372
Joined: Wed Jul 06, 2005 4:26 am

RE: Boeing MOM Update Part 2

Thu Apr 21, 2016 7:34 pm

Quoting enzo011 (Reply 11):
I am sure because of my laziness in writing my view is getting muddled. When I post 739 I mean not just the 737-900, but the 737-900ER and the 737-900MAX.

Yes there may be some customers who would prefer the 737-9(00ER) but it's performance shortcomings were such they had to "settle" for the 737-8(00). But I stand by my opinion the 737-800 is a good plane in it's own right, which is why it has secured over 5000 orders to date.

Quoting enzo011 (Reply 11):
This just shows the 739 (in all variants) in a bad light as well. Even with more seats and what really should only be slightly higher cost it is still outsold by its competitor and its smaller sibling.

Well, the "amazing" A321-200 has been comprehensively outsold by it's smaller sibling (A320-200), as well, so maybe the A321-200 is not as "amazing" as some claim.  

Seriously, I don't see much argument against the belief that the 737-900ER is lacking in areas like runway performance and such. Nor that the A321-200, in both ceo and neo form, is a superior platform at longer distances (transcontinental, for example). But that does not, nor should not, mean the 737-9(00ER) is a total dog and an abject failure in the marketplace, full stop and therefore never should have been offered.
 
User avatar
lightsaber
Moderator
Posts: 18106
Joined: Wed Jan 19, 2005 10:55 pm

RE: Boeing MOM Update Part 2

Fri Apr 22, 2016 3:39 am

Quoting Stitch (Reply 12):
But that does not, nor should not, mean the 737-9(00ER) is a total dog and an abject failure in the marketplace, full stop and therefore never should have been offered.

Per Wikipedia there are 418 -9MAX ordered. That is enough to have a viable sub-type. While LionAir and UA dominate the backlog, I would be surprised if DL didn't consider the type (for the right price). It won't be a huge success, but it will spoil more than a few orders. I'd bet it breaks a thousand total deliveries. More than say the MD-80, probably close to the 757 total deliveries.

It certainly has more sales years ahead.

But I'll remain excited about the A321NEO/LR.  


Lightsaber
IM messages to mods on warnings and bans will be ignored and nasty ones will result in a ban.
 
User avatar
enzo011
Posts: 1686
Joined: Tue Jun 21, 2011 8:12 am

RE: Boeing MOM Update Part 2

Fri Apr 22, 2016 6:57 am

Quoting Stitch (Reply 12):
Yes there may be some customers who would prefer the 737-9(00ER) but it's performance shortcomings were such they had to "settle" for the 737-8(00). But I stand by my opinion the 737-800 is a good plane in it's own right, which is why it has secured over 5000 orders to date.

Without a number on how many such orders have been moved to the 738 it is hard to gauge how good it actually is and how good/bad the 739 actually is. If only 100 models over the entire NG/MAX range has been changed to the 738 my point is moot. If it is 1000 or more it changes the landscape a bit.

Quoting Stitch (Reply 12):
Well, the "amazing" A321-200 has been comprehensively outsold by it's smaller sibling (A320-200), as well, so maybe the A321-200 is not as "amazing" as some claim.  

Actually, we know the A321 is the best thing since slice bread (a-net fact!), so being outsold by the A320 doesn't diminish its amazing credentials, it only enhances the A320 bona fides...     

Quoting lightsaber (Reply 13):
Per Wikipedia there are 418 -9MAX ordered. That is enough to have a viable sub-type. While LionAir and UA dominate the backlog, I would be surprised if DL didn't consider the type (for the right price). It won't be a huge success, but it will spoil more than a few orders. I'd bet it breaks a thousand total deliveries. More than say the MD-80, probably close to the 757 total deliveries.

On paper the specifications and capabilities of the 739MAX reads well. It is a good design of the 737 family. If there was only 737s available to order it would have many more orders. However the competition has a model that seems to offer airlines so much more. So while it certainly isn't a dog and needs to be put down, it needs help to sell to airlines by using availability and fleet commonality more than ever.
 
User avatar
Stitch
Posts: 26372
Joined: Wed Jul 06, 2005 4:26 am

RE: Boeing MOM Update Part 2

Fri Apr 22, 2016 4:03 pm

Quoting enzo011 (Reply 14):
Without a number on how many such orders have been moved to the 738 it is hard to gauge how good it actually is and how good/bad the 739 actually is. If only 100 models over the entire NG/MAX range has been changed to the 738 my point is moot. If it is 1000 or more it changes the landscape a bit.

If it was 1000 frames I'd say the reinforces the idea the 737-800 is a great plane because it was therefore sufficiently capable of doing the job that they did not feel the need to specifically meet the requirements by ordering an A321, instead.

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos