In 2003, Boeing's in-house magazine Frontiers made a bold claim about a new product category it for the first time dubbed the "middle of the market" or MoM, which the article defined with aircraft optimised with 180-250 seats and a 3,000-6,500nm range.
"MoM is a big market space that is quiet now but will be a large part of the next growth phase," the magazine declared.
Airbus and Boeing would spend much of the next 15 years developing and fielding new aircraft to occupy the extreme ends of the so-called MoM category, with the Airbus A321neo and A321LR and the Boeing 737 Max 9 at the bottom and the Boeing 787-8 and the re-engined Airbus A330-800 at the top.
That still left unoccupied a vast middle ground in the MoM category, a segment usually defined as ranging between 4,000nm and 5,000nm and with 200-220 seats. Starting in 2012, Boeing began studies on a range of options. A year later it started a 30-month series of discussions with customers, declaring finally at the Paris air show that a consensus had formed on the need for such an aircraft. More recently, Boeing Commercial Airplanes chief executive Ray Conner told employees in an internal webcast that he wanted to make a decision on how – or whether – to proceed this year.
Some 13 years after defining the broad category, and four years after narrowing studies on the 4,000-5,000nm segment, the MoM – referred to variously as a 757 replacement, 7M7 and 797 – remains a puzzling muddle of contradictory opinions.
In public and private conversations at the ISTAT Americas conference – an annual gathering of aviation financiers, lessors, airlines and manufacturers – in Phoenix, a portrait emerged of a curiously conflicted industry, still debating not only how Airbus and Boeing should address such an MoM requirement, but even whether such a market exists.
More doubts were cast upon the idea of simply stretching the 737 Max, the latest re-engining and updating of the Boeing single-aisle type that first flew in 1967. At 42m (138ft) long, the fuselage of the 737 Max 9 is already stretched nearly 50% longer than the 28.7m length of the 737-100.
"It's probably going to be tough to do another stretch of an existing narrowbody," said DVB Bank managing director Bert van Leeuwen, an aviation financier and self-described aviation enthusiast, during a 1 March panel discussion focused on the MoM category at the ISTAT conference.
Another industry official – and Boeing supplier – said in an interview at ISTAT that his engineers had analysed a further stretch of the 737 Max 9 and concluded it was not feasible.
Those doubts echo deep reservations of the idea even within Boeing, which has discussed the option with customers. In an interview last summer, before the Paris air show, Boeing's chief salesman John Wojick seemed as unenthusiastic about the idea as van Leeuwen.
"One of the solutions is to just make the 737 Max longer, bigger," Wojick said last year. "I'm not so sure that that's the one that's going to be best solution in this market space."
As a financier, van Leeuwen would prefer that Boeing and Airbus simply drop the idea, fearing yet another new derivative or clean-sheet model will lessen the value of his assets with aircraft already in service.
The evidence supporting the business case for a new aircraft in the MoM category appears mixed.
John Thomas, a managing director for London-based LEK Consulting, led ISTAT's MoM panel with an analysis of demand in the segment with flights between 3,000nm and 4,000nm in range.
Airlines operated around 460,000 flights in that segment in 2015, leading to a "back of the envelope" requirement for 900 aircraft, Thomas says. But the segment has grown at an annual clip of 5% for five years, rising by 120,000 yearly flights overall from 2008 to 2015, he adds, as demand grows on intra-Asian routes and north-south flights connecting North America and Latin America, Southeast Asia and Australia, and Europe and Africa.
Operators in that range tend to be full-service network carriers, accounting for about 90% of demand, Thomas says, almost excluding low-cost carriers which account for 35% of flights on short-haul routes. That disparity raises an intriguing question.
"If an aircraft is developed for this market, would you actually see that as an aircraft that's being developed not necessarily for the full-service carriers, who are participating in that market very well, but actually [to] enable the ULCC [ultra-low-cost carriers] and the hybrid carriers to enter this market?" Thomas asks.
Beyond Conner's statement on the internal webcast last month, Boeing is keeping its options open. Randy Tinseth, vice-president of marketing, says only that any new product has to appeal to the hundreds of operators and dozens of business models in the market.
"You're going to have to work very hard to build a very flexible airplane," Tinseth says.
Tinseth offered no answer to questions about the basic configurations under review. Options range from derivatives of existing single-aisle and twin-aisle aircraft, clean-sheet designs based on familiar single-aisle and twin-aisle cross-sections, and entirely new fuselage shapes, including elliptical designs featured in several recent Boeing patents.
But what Tinseth refers to as a "grey area" that's "very exciting", others see a desperate attempt for Boeing to overcome an increasingly glaring competitive weakness.
In his remarks at ISTAT, Airbus chief operating officer for customers John Leahy offered his typical, rhetorically pugilistic analysis of Boeing's MoM strategy, claiming Airbus had won two-thirds of orders for light twin-aisles and three-quarters of all sales for heavy single-aisles over five years.
"From an industry point of view, there is not a particular shortage of airplanes in the middle of the market," Leahy says. "That isn't true if you're sitting in Seattle. There's a big hole there. You're ceding the light twin market to your competitor. You're ceding big single-aisles to your competitor. So you've got a problem."
Adding to the problem are the constraints of technology. Even combining the latest turbofan engines, longer wingspans, composite materials and more electric systems, it's still not clear if it is possible to package them together in a way that can offer the payload and range of a 767-200 with the operating economics of a 737-800.
"When you look at this grey area of the market you've got a lot of things you need to come to terms with," says Airbus senior vice-president of market and product strategy Robert Lange, who spoke on ISTAT's MoM panel.
"One of which is the cross-section of an aircraft, as you move from a single-aisle to a twin-aisle. The first thing you’re doing is, you're adding the width of one productive seat and one nonproductive aisle," he adds. "We see these [calls for a new MoM programme] coming out of physical and economic constraints on hardware versus something that is a sweet spot that corresponds to a market."
On the other hand, some of Boeing's customers have acknowledged interest in acquiring such an aircraft. United Airlines, for example, has been working with Boeing to define the requirements for such an aircraft. In United's view, the focus is on replacing a relatively youthful transatlantic 757 fleet with a more capable aircraft that could fly from Europe deep into the US interior, says Ron Baur, United's vice-president of fleets.
"We do have the luxury of waiting to some degree but we do think there's a need for that airplane for sure," Baur says.
For United, the key criteria are single-aisle-like economics and compatibility with infrastructure, such as gate access, says Baur.
"We're focused on the economics," he adds. "The economics have to be there for the airplane to work. We're not interested in an airplane the might have this profile that doesn't work for us economically."
More questions remain about Boeing's plans. For the first time since the early 1980s, the MoM opportunity may require the engine manufacturers to develop a new centreline design sized between 40,000lb and 50,000lb of thrust. Boeing has to decide where to build the new aircraft, which would have to take its turn at the end of a long queue of already-announced development programmes, including the 737 Max, 787-10 and 777X.
"It's a tough business case. What's it going to cost to develop the programme? What is it going to cost in terms of recurring cost? Do you have the resources to be successful? And then, finally, can you sell it at a price that works in the market?" Tinseth says. "If those things come together you have a business case to go forward? And we're far from that point now."
Airbus's Leahy offers Boeing some free advice.
"Go re-engine the 757, make it a 'Neo' and put it into the marketplace," he says. "It won't cost you a fortune and at least you'll have something to compete in the market."
Not surprisingly, Boeing did not embrace Leahy's recommendation. Indeed, Boeing has acknowledged studying a 757 production revival but shelved the idea as impractical.
"I can tell you that the re-engined 757 is off the table," says Tinseth. "I don't think that’s going to work."
In fact Boeing and Airbus are not the only organisations that have studied a 757 re-engining. As far back as 2010, a former Boeing propulsion integration engineer developed a proposal to re-engine the existing 757 fleet as a retrofit with a new version of the Pratt & Whitney geared turbofan engine.
In a nearly 30-year Boeing career, David Tegeler worked and managed several propulsion competitions, including the engine selection for the 737NG family. By 2010, he had established an independent consulting firm, Engine and Aircraft Strategies, when the idea struck him.
"I was staring at a 757 payload range curve and realised how good the airplane would be with a geared turbofan and how easy the installation would be, looking at the nacelle ground clearance," Tegeler says.
To Tegeler, the main appeal would be to give Boeing a stopgap solution to the A321neo over the next decade as the company developed a new derivative or clean-sheet. It would also give P&W and Boeing experience developing a new centreline engine with a thrust rating of up to 45,000lb-thrust before the ultimate MoM option became available.
At the time, the 757 fleet younger than 20 years numbered 770 aircraft, including 464 powered by the Rolls-Royce RB211 and 306 driven by PW2000 engines. Tegeler says he pitched the concept to all three US major carriers – American Airlines, Delta Air Lines and United.
"Each had their own very good reasons why they couldn't be sponsors of the programme. However, one thought it was an interesting programme," he says.
The concept also couldn't survive reluctance by the engine manufacturer, already committed to develop five different versions of the GTF for new aircraft families.
"P&W was open about saying it had too many programmes on its plate," Tegeler says. "So that would be difficult without a major airlines sponsor."
Tegeler abandoned the idea after it failed to gain traction from airlines or the engine companies. Six years later, the window for a retrofit 757 re-engining programme has passed as the fleet has aged. But for Tegeler another opportunity is opening to re-engine another Boeing aircraft either as a new production model or a retrofit. He proposes to take a derated version of the GE Aviation GEnx-2B for the 747-8 and install the 64,000lb-thrust turbofan on the 767-200 and 767-300. Unlike the bleedless architecture of the GEnx-1B offered for the 787, the GEnx-2B has a conventional bleed-air system compatible with the 767.
"This would satisfy the mid-market for some time to come and not take away from 787 sales, with an inexpensive platform," Tegeler says. To keep it inexpensive, Boeing would have to keep modifications to a minimum.
"Alternatively," Tegeler adds, "it could be a retrofit programme but that would be harder to organise if Boeing wasn't involved."
Source: Cirium Dashboard
