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Boeing’s New Midsize Airplane Plan Evolves

Boeing’s New Midsize Airplane Plan EvolvesAeroBD | The AERO news Company…VA, Nov. 13, 2015 :  Boeing may still be years from launching a new midsize airplane (NMA), but clues about the forces shaping its potential design evolution continue to emerge. The embryonic “757-replacement” NMA study is for an aircraft with more capacity than the 737-900ER/737-9 but with less range than the 787. Speaking at events surrounding the Dubai Airshow, John Wojick, senior vice president of global sales and marketing for Boeing Commercial Airplanes, says: “We see substantial demand. If we can produce an airplane with a range of 4,500-5,000 nm, seating about 220-280 passengers, then there would be an awful lot of demand. I’d say in the thousands. Easily more than 2,000.”

The configuration of the NMA, and even whether the aircraft should be a longer single-aisle or a shorter twin-aisle, remains undecided. “Customers want the most efficient aircraft with single-aisle economics,” says Wojick. Fuel efficiency is a key driver of the design, but if the wider fuselage of a twin-aisle would incur greater drag, then the single-aisle feature could be retained. “If it means two-aisle [aircraft] are less efficient, then they’d be happy with a single-aisle,” he adds.

The NMA is in line for possible development beyond the current committed commercial development programs. “We have got to finish the MAX family, which begins to deliver in 2017, then we have the 787-10 in 2018 and the 777X in 2020 (777-9X) and 2022 (777-8X). Beyond that, we have been studying opportunities to enhance our product lines going forward. It is very clear to us that there is an interest in an aircraft larger than MAX in terms of seats but with less range than the 787,” adds Wojick. A nearer-term question is how to defend the market space closest to the NMA with the 737s in its current portfolio. Despite Airbus’s announcement that it plans to boost A320-family production to 60 per month by 2019, Boeing says it does not feel pressured to increase the planned production rate of the 737 beyond the 52 per month already committed.

The U.S. manufacturer will, however, “judiciously look at what makes financial sense for us,” says Wojick. “We are at 42 [per month] today, 47 in 2017 and 52 in 2018,” he adds: “We are comfortably oversold at the 52 rate and think we can weather any perturbation in marketplace at that rate.”

In late October, Airbus signaled it will raise A320-family production from the current 42 per month to 60 within the next four years. The European manufacturer is already making preparations to increase output to 50 aircraft by 2017 based on increasing output at production lines in China, France, Germany and the U.S. The airframer has added that it does not need new orders to be able to fill production at that rate, and notes the newly expanded capacity is already supported by firm contracts.

If “it makes sense for Boeing to do anything more than [52], that demand needs to be from solid creditworthy customers,” says Wojick, who notes that from 2019-20 and beyond, the 737 MAX line is delivering large amounts of aircraft to “customers like Ryanair and Southwest Airlines and others. We feel pretty good about the blue-chip companies,” he adds.

Boeing has conducted internal studies as to what production rates could realistically match Airbus; from these it estimates that 58 deliveries per month would effectively equal the planned output of A320s by 2019. This is based on the actual production of aircraft averaged out over the year and the impact on deliveries caused by the European summer vacation break. Wojick says: “I wouldn’t want to speculate on numbers, but [if the production rate increase is sanctioned] we wouldn’t want to jump 20%.”

The current firm MAX order backlog stands at 2,901 aircraft from 59 customers. With the clock ticking down to the end of the year, Boeing appears confident that more 737s will be added, as it works to secure the almost 260 orders needed to achieve the targeted book-to-bill ratio of one. That ratio is a measure of demand and, as it compares the number of aircraft ordered to those delivered, represents a more stable production picture the closer it is to one. “I have a little work to do,” says Wojick. “We have folks working pretty hard to do some additional business, obviously before the end of the year.

“We are having a strong year in terms of orders and deliveries with 489 orders through Nov. 4, and we anticipate at the end of year we will end up with a book-to-bill of around one,” says Wojick. The forecast for the year was 755 deliveries, so this indicates 266 orders are required to achieve the year-end sales target.

Boeing’s backlog stands at 5,600 “which is roughly eight years of production,” says Wojick. “So any year you can book as many airplanes as you are delivering—and you can keep your backlog solid—is a pretty strong year. We are at 638 deliveries, so we are well on track to deliver our 755 aircraft for the year; of those, 112 are 787s.” He notes that the number stands at 340 787s to date, at a rate of above 10 per month, meaning some of the backlog that had built up during delays is now being handed over to customers.

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