A new industry survey from Aviation Week Network and Bank of America Global Research finds there is market appetite for Boeing to develop an aircraft that would potentially fill the 757-replacement niche.
Jens Flottau, Guy Norris
Airlines and lessors would like Boeing to develop a “modern 757” to compete against the Airbus A321XLR. Credit: Joepriesaviation.net
If airlines were asked to say in three words whether Boeing should launch a new narrowbody aircraft, the answer would be easy: Just do it.
That is the message of a joint Aviation Week Network and Bank of America Global Research survey that generated results from more than 900 respondents—including a large number of airlines and lessors—published just as the industry heads into the Dubai Airshow.
What Boeing should focus on becomes very clear from the survey. Of the respondents, 73% said Boeing needs to offer a more capable, longer-range, larger-capacity, lower-unit-cost aircraft in the narrowbody market. The aircraft, as defined by most of its potential customers, would be significantly larger than the current 737 MAX, with 29% of them preferring a family covering 180 to 250 seats. More than half of the participants also want the aircraft to fly either up to 4,500 nm or even farther than that—significantly more than what all current narrowbodies except the A321XLR are capable of flying.
Future operators and owners are also quite demanding, but not unrealistic, about the targeted reduction in unit costs: 60% would be happy with 15% lower costs and 85% would like to see 20% lower costs.
Having progressed on studies for a New Midsize Airplane (NMA) until early 2020, the U.S. manufacturer has throttled back new product development efforts. Boeing is prioritizing production stability and recovery efforts following the historic impacts of the COVID-19 pandemic, the 20-month grounding of the 737 MAX, and the stop in 787 deliveries that, some say, may still be in place in the first quarter of 2022.
“I think it is inevitable that Boeing does something,” Bank of America Global Research analyst Ron Epstein says. “But they want to repair their balance sheet before they move ahead.”
It is obvious from the survey results that airlines and lessors want Boeing not to build a one-for-one replacement of the MAX, but a competitor to the A321XLR. The long-range version of the A321neo is to be delivered first in 2023. Even though Airbus has not revealed precise order figures for the type, it is safe to assume that firm commitments top 500 units—already a huge success. Epstein calls the project “ostensibly a modern 757.”
Like the 757, many airlines are planning to use the XLR on true long-haul routes across the Atlantic or from the U.S. deep into Latin America or North Africa.
The A321neo is on track to get to half of A320neo family production fast and is now dominating the large single-aisle market. It has become a hugely important source of revenue for Airbus. It is a piece of the pie that Boeing has less access to, given that the 737-9 and -10 lack range.
Nevertheless, most analysts, including Epstein, agree that the 737-8 will sell fine against the A320neo–therefore, whatever Boeing may do in the future can be larger.
Unsurprisingly, environmental sustainability is going to be a key determining factor of success. Among the participants, 71% say that element is either extremely or very important.
And they make clear that they would like Boeing to act fast in principle. Twenty-nine percent want Boeing to deliver an aircraft already in 2026, another 22% in 2027 and 19% in 2028, the same share as those asking for first delivery in 2030. Regardless of the eventual timing, they agree that Boeing has little to no time to waste.
There is one caveat: new propulsion technologies. Almost two-thirds of the respondents say they would be prepared to wait for an aircraft “significantly longer” if that meant that new concepts such as an open rotor, hydrogen or hybrid power could be introduced. Almost as many of them, however, believe that there would be customer-acceptance issues with open rotors. These are at the heart of CFM International’s RISE research and development program that could power a next-generation aircraft.
When Boeing studied the NMA and the subsequent -5X, the manufacturer left open whether it would ultimately go for a narrowbody or a small widebody. Among survey participants, 72% would consider a small widebody despite the higher drag caused by a wider fuselage cross section. There are two arguments in favor of it: boarding and deboarding can be quicker if passengers can use two aisles.
The other element is the relatively recent shift of the airline revenue split toward cargo that makes it more important for aircraft to offer at least a decent amount of volume.
