Jan 152015
 
The new Airbus A321neoLR, in the livery of launch customer Air Lease.

The newly announced Airbus A321neoLR, in the livery of launch customer Air Lease.

Boeing has suffered from a string of dubious decisions over the last decade or so.

There’s little for Boeing to be proud about when it comes to its 747-8 program and its lack of sales; the 787 has been an atrociously mismanaged program that was both delayed beyond belief and ended up probably tens of billions over budget, and its extraordinary decision in 2010/2011 to do nothing for 8.5 months while Airbus enjoyed uncontested sales of its new generation A320 series planes saw Boeing lose momentum in the single-aisle plane sector.

The uncontested nature of the new A320neo series saw Airbus book 1226 neo sales in 2011 (the neo was announced in December 2010), compared to Boeing, which only announced its MAX equivalent in August, and managed only 150 orders that year.  Some four years later, Boeing has not caught up to Airbus, with Airbus having 3621 neo sales compared to Boeing’s 2663 MAX sales, and there’s little reason to expect Boeing ever will.  These shortfalls are starkly apparent in this excellent analysis.

It seems history is about to repeat itself.

A plane that we as passengers seldom like is the (now discontinued) 757.  But the airlines love them – they fill a sweet spot/gap in airplane capabilities, and have been, historically, economical in operation.  They have also been very safe, with only one or two crashes that might be traced back to airplane design issues.

With the passing of time, their economical operation is becoming increasingly being challenged, particularly due to the rising cost of engine maintenance on the planes, and the ‘state of the art’ in airplane design has changed a great deal since the plane’s development in the late 1970s.  Here’s an excellent article that points out some of these issues, and a recent article pointing out the rising costs of 757 operations.

The 757 program essentially stopped receiving orders in 2001 and the last 757 came off the assembly line on 28 October 2004 – just over ten years ago.   In total, Boeing sold 1050 of the planes – it was a very successful program for them.  It is thought that about 850 of the planes remain in service and another 165 are in storage.

But since the end of the 757 program, Boeing has had a gap in its airplane model range.  It claims to have reduced the size of the gap with its largest model 737s being only a little smaller, but with a very large gap from that up to the smallest 777 or 787.  The 757 can fly on routes up to about 3500 miles in length, and can carry about 200 – 240 passengers in a typical two class configuration.

Boeing’s closest comparable plane is its new 737-9 MAX.  It can fly about as far, and carries up to 180 passengers.

Just announced this week by Airbus is a plane clearly designed to ‘fill the gap’ left by the 757.  Dubbed the A321neoLR, it will carry 206 passengers in a typical two class configuration, and have a range of about 4,000 miles.  This plane flies further than the 737-9 MAX and carries more passengers.  It is true that the extra range isn’t always a necessary capability, but the extra range will extend the number of city pairs the A321 can service, giving it more potential routes to work.

As for passenger numbers, the 26 extra passengers is a big deal to the point of probably being a deal-maker/breaker – it massively boosts the profitability of the plane for airlines, at least on routes where the airlines reasonably expect they could fill the extra seats.

To date, the regular A321neo has been winning against the 737-9MAX in almost every deal the two are competing for (755 compared to 217) and the new A321neoLR seems to give Airbus another card to play in the airplane configuration game.  Indeed, in announcing the new plane, it also revealed a launch order for 30 of the planes.

Boeing offers its traditional response to the Airbus innovation – it doesn’t see much of a market for that type of plane configuration, but will continue to monitor the market closely.  Just like it did for 8.5 months while Airbus took 1000+ orders for its updated/upgraded neo planes before finally scrambling to announce its MAX alternative…..

Boeing also tries to change the subject by saying its 737-8MAX is a better plane than the Airbus A320neo, but that is a hard claim to make with a straight face – the 737-8MAX has sold 2386 planes, while the A320neo has sold 2817.  One wonders how Boeing can reconcile its claim with the marketplace reality.

Why is Boeing letting market share slip through its fingers?  Its real problem is that the aging 737 design doesn’t allow itself for any more modification or enhancement, whereas the more modern origins of the A320 family does.

Boeing should have invested in a new model series rather than attempt to extend its 737 family one more generation with the MAX series in 2011.  That is probably a large part of why the A320neo family is doing so much better.

And now, Boeing is unable to come up with a suitable 737 based alternative to the 757, and for whatever reason is unwilling to develop a new 757 replacement model from scratch.  Sadly, if Boeing had come up with a replacement to the 737 in 2011, it probably now could readily tweak that for a 757 type variant too.  The ripples of its delayed and what increasingly appears to have been inappropriate decision in 2011 keep coming back to haunt it.

Update :  Read our subsequent article suggesting Boeing might be going to reintroduce the 757.

  2 Responses to “Another Boeing Blunder?”

  1. Just what we need: another single-aisle, three x three configuration plane that will hold more than 200 passengers shoulder-to-shoulder for a terribly uncomfortable 8-hour flight!! The 757 should be banned for any flight over three hours and no single-aisle plane should be used for a flight over 4 hours. Yes, I know the airlines love them–they’re efficient– and miserable to travel in. The 321neoLR sounds like just the plane to make long flights really miserable!!
    Al

  2. […] wrote a month ago about Boeing being (again) snookered by Airbus.  After winning an 8½ month sales advantage and some 1,000+ bonus sales of its new version A320 […]

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