Paris

That order from such a long-time Boeing customer spurred the US airframer into a response by re-engining its stalwart 737 at short notice and at speed.

‘Every moment that passes allows Airbus to continue delivering A321LRs’

Now 346 MAX passengers and crew are dead on the rocky plateaus east of Addis Ababa and in the waters of the Java Sea.

The grounding of the 737 MAX, and the ongoing problems Boeing and its regulators are experiencing in certifying the aircraft to fly again, were always going to create a context for a unique year at the world’s largest aviation event, the Paris Air Show at Le Bourget Airport north-east of the French capital.

Boeing, having changed tack and adopting a tone of contrition that struck some as excessive, made few sales beyond the order for 200 Boeing 737 MAX aircraft from IAG, parent group to British Airways, Iberia, Aer Lingus, Vueling and LEVEL, that served as something of a boost for the airframer and for the MAX. Delays to the 777X program’s GE engines meant a few additional orders for existing products didn’t tip the scale much further in Boeing’s favour.

Airbus, meanwhile, continued its evolution of the re-engined A320neo family with which it had such success in 2011, unveiling the extra-long-range A321XLR version of the A321neo.

The impact on the largest sector of commercial aviation from these two aircraft families can’t be understated, but nor can the context in which the aircraft, their airline customers, and their manufacturers, all operate.

IAG orders 200 737 MAXs, the
Plane-That-Must-Not-Be-Named

Boeing needed a big vote of confidence for its grounded 737 MAX on the way into the show, especially after being left reeling during the first press conference when General Electric announced a delay of several months to its GE9X engine for the 777X generation of aircraft, creating significant pressure on the programme and indeed its projected mid-2020 entry into service.

So, as journalists saw their inboxes light up with an email from Boeing that the “International Airlines Group announces intent to buy 200 Boeing 737 MAX airplanes”, eyebrows were raised – and continued to rise when the corresponding message from Boeing’s customer, the parent group of British Airways, Iberia, Aer Lingus, Vueling and LEVEL, read that “IAG signs letter of intent for 200 Boeing 737-8 and 737-10”, omitting entirely any mention of the word ‘MAX’ in its press release.

‘Boeing needed a big vote of confidence for its grounded 737 MAX’

Boeing, by contrast, used the word 14 times. It is hard to consider a letter of intent a particularly strong vote of confidence if the customer refuses to name the product. Like Voldemort from the Harry Potter books and films, the MAX appeared to be The-Plane-That-Must-Not-Be-Named.

“We’re very pleased to sign this letter of intent with Boeing and are certain that these aircraft will be a great addition to IAG’s short-haul fleet,” said Willie Walsh, chief executive of the group, not using the word ‘MAX’ either. “We have every confidence in Boeing and expect that the aircraft will make a successful return to service in the coming months having received approval from the regulators.”

Those eyebrows approached hairlines as rumours of the percentage discount IAG received in exchange for lending its good name to the Boeing 737 MAX raced around the tarmac at Le Bourget. While these numbers were unconfirmed by either party to the deal, if the scale of the discount is anything approaching that suggested then Boeing is taking a major bath on an order that would be valued at more than US$20 billion at full list price. That is itself problematic, not least because Boeing needs to make money when it sells airplanes, partly to fund much-needed new programs.

And eyebrows shot out of skulls as Airbus chief commercial officer Christian Scherer revealed on the final day of the show that the European airframer had not even received a “request for proposal” from IAG for the order.

“No, we have not received an RFP, but we are taking the position that we would like to bid for this business. IAG is a very good customer,” Scherer said, noting that, of “the IAG group, every one of these airlines are A320, A321, A319 operators, using the containerised capability of our airplane at Heathrow, using the wider cabin, using the longer range. So we are absolutely intent on bidding for IAG business.”

Boeing representatives at Le Bourget and in Australia declined or did not respond to multiple requests from Australian Aviation before, during and after the show for an interview to discuss the implications of the company’s activities at Le Bourget with reference to the Australia, New Zealand, South-west Pacific and South-east Asia regions.

Understanding the context in which
Euro-giant IAG operates is crucial

To put the deal into context, between its five airline brands — British Airways, Iberia, Aer Lingus, Vueling and LEVEL — the International Airlines Group operates nearly 250 Airbus A320 family aircraft alone, and at that size it makes sense for any group of airlines to diversify its operating fleet. Such a decision becomes even more sensible when the wider context of a shrinking number of manufacturers of airframes, engines and other key equipment over the last decades is considered.

In essence, the global aviation industry is reliant on a shrinking pool of increasingly amalgamated suppliers and super-suppliers that win a growing proportion of business. Any disruption to one of these suppliers therefore has a proportionally greater impact on operations.

‘It makes sense for any group of airlines to diversify its operating fleet’

More widely, the IAG order is notable for several reasons. First, it followed an order by IAG for Airbus A321XLR aircraft for Iberia and Aer Lingus. Second, IAG mentioned that “it is anticipated that the aircraft would be used by a number of the Group’s airlines including Vueling, LEVEL plus British Airways at London Gatwick airport.”

As Airbus’ Scherer highlighted, the containerised cargo capabilities of the A320 family, where the 737 (MAX or otherwise) has none, are valuable for major network airlines such as British Airways, Iberia and Aer Lingus, where they might not be for low-cost carriers.

Boeing, for its part, said: “In selecting the 737 MAX, IAG says it will fly a combination of the 737 MAX 8, which seats up to 178 passengers in a two-class configuration, and the larger 737 MAX 10 jet, which can accommodate as many as 230 passengers. The airline did not disclose a specific split between the two MAX models, though it anticipates deploying the aircraft at a number of the group’s airlines including Vueling and LEVEL.”

The inclusion of BA’s London Gatwick operations, the rather unloved stepchild of the UK airline, is crucial here. The BA cargo world is principally Heathrow-based, with separate contracts for much of the airline’s operations at its Gatwick and Heathrow hubs.

Indeed, it would make sense for low-cost operations to use the lighter, cheaper 737 MAX (or, rather, the -8 and -10, in IAG’s words) if the additional performance of the A320 family, notably the A321neo and especially the A321XLR version, aren’t needed.

IAG, which notes that the letter of intent is subject to formal agreement, will take CFM International LEAP-1B engines for its aircraft, which would be delivered between 2023 and 2027.

There are also other contexts in the Boeing-IAG relationship that surfaced at Le Bourget.

‘This will enable operators to open new worldwide routes such as … China to Australia’

British Airways signed a Landing Gear Exchange agreement with for its 777 fleet, through which, Boeing explained, “operators receive an overhauled and certified landing gear from an exchange pool maintained by Boeing, with stocked components and supporting parts shipping within 24 hours.”

But even more interestingly in the context of the MAX order, Boeing will manage the parts inventory for British Airways’ Airbus short-haul aircraft.

“Boeing will furnish British Airways with its Component Services Program where Boeing and its partners will own, manage, and maintain a global exchange inventory of parts for the airline’s A320 and A320neo aircraft. This agreement – the first of its kind for Boeing – will open convenient access to parts for British Airways, which operates an extensive route network,” said the airframer.

Overall, in summary, Boeing is immensely fortunate to have an airline group as respected and influential as IAG willing to put its money on the 737 MAX, despite the dents to the shine of the letter of intent from IAG’s refusal to name the aircraft, and its simultaneous order for the A321XLR.

AIRBUS
Boeing’s bigger problems: the NMA
and FSA remain on lockdown

The rest of Boeing’s show was largely a reflection of the stasis in which its aircraft programmes are being held while the airframer continues to focus on getting the 737 MAX back into service.

Korean Air ordered twenty 787-9 and -10 Dreamliners, with 10 more coming from Air Lease Corporation which itself signed a deal for a further five of the -9 variant to add to its fleet.

Boeing also secured bridging orders between its current 777 generation and the now-delayed 777X with 777F freighter deals with Qatar Airways for five aircraft and “up to six” from Taipei-based China Airlines. Turkmenistan Airlines ordered one further 777-200LR.

Orders were also placed for 45 737-800BCF passenger-to-freight conversions of the current NG generation of 737, with 20 for ASL Aviation Holdings and 25 for GECAS. The crux, of course, will be whether the passenger side of the industry is in a place where it wants to release 737s into freighter use in the absence of the MAX replacements.

The big absence, though, was the NMA, Boeing’s replacement for the 757 and smaller 767 missions for which the 787-8 is ‘too much aircraft’ in terms of price, weight and performance. Without the MAX grounding, Boeing was expected to launch the NMA at Le Bourget this year, and Airbus the A321XLR in response. Instead, Airbus got a free run and launched the XLR anyway.

Airbus’s A321XLR wows with diverse set of 243 orders

Airbus’ unveiling of the A321XLR on the first day of the air show, with its 4,700nm range from new fuel tanks and several additional innovations, was the big ‘new’ news at the show.

The extra 700nm range compared with the A321LR extends flight times to some 10 hours, ascribing a flight arc from Sydney that stretches to Myanmar, most of the densely inhabited parts of China nearly as far north as Beijing, the Korean peninsula, Japan and to Hawaii. But it’s the smaller routes that are likely to benefit most from the A321XLR.

In what chief commercial officer Christian Scherer called a “vote of confidence” in the aircraft, Airbus launched the XLR with Steven Udvar-Házy and John Plueger of Air Lease Corporation.

Airbus calls the A321XLR “the next evolutionary step from the A321LR,” positing that “the XLR is world’s most efficient and longest-range single-aisle aircraft which will enable operators in this segment to access markets requiring even more range and payload.”

Citing a 30 per cent lower fuel burn per seat than “previous-generation competitor aircraft”, presumably the Boeing 757, the aircraft will reach 4,700nm, some 15percent more than the previous A321LR’s 4,000nm.

“With this added range, airlines will be able to operate a lower-cost single-aisle aircraft on longer and less heavily travelled routes – many of which can now only be served by larger and less efficient widebody aircraft,” Airbus said. “This will enable operators to open new world-wide routes such as India to Europe or China to Australia, as well as further extending the family’s non-stop reach on direct transatlantic flights between continental Europe and the Americas. For passengers, the A321XLR’s new Airspace cabin will provide the best travel experience, while offering seats in all classes with the same high-comfort as on long-haul widebody aircraft.”

Airbus executives were visibly pleased not just with the number of commitments to the A321XLR, but also the variety of airline customers. Lessor Air Lease Corporation is a big win with 27 aircraft, as is American Airlines with its 50-jet echo of the 2011 deal. Middle East Airlines was an early customer, adding four aircraft to its fleet, while Saudia took 15 and JetBlue 13. Major global players IAG (six for Aer Lingus and eight for Iberia) and the Qantas Group (36, as yet unallocated to brands) provide a marked vote of confidence.

Cebu Pacific and Saudi Flynas ordered 10 aircraft each, and Indigo Partners purchased 50 to be split between its US airline Frontier (18), Chilean carrier Jetsmart (12) and European LCC Wizz Air (20).

The A321XLR is all part of Airbus’s plan to dominate the lower end of the ‘middle of the market’, the segment which Boeing is currently planning to address with its new mid-market aircraft, the NMA.

“The A321XLR has been designed to maximize overall commonality with the A321LR and the rest of the A320neo Family, while introducing minimal changes needed to give the aircraft an extra long range with increased revenue payload,” Airbus explained.

A321XLR
by the numbers

New permanent 700kg rear centre tank (RCT) topping up fuel capacity by 12,900 litres, adding 700nm range

Modified landing gear for an increased maximum takeoff weight (MTOW) of 101 metric tonnes

Optimised wing trailing edge flap configuration to preserve the same takeoff performance and engine thrust requirements as today’s A321neo

Statistics as A321neo

Length: 44.51m
Cabin length: 34.44m
Fuselage width: 3.95m
Maximum cabin width: 3.709m
Wing span, geometric: 35.80m
Height: 11.76m
Track: 7.59m
Wheelbase: 16.90m
Maximum seating: 244
Typical seating, 2-class: 180-220
Cargo: 10 LD3-45W underfloor, maximum 10 pallets
Mmo: M0.82
Max. ramp weight: 97.40t
Max. takeoff weight: 97t
Max. landing weight: 79.20t
Max. zero fuel weight: 75.60t
Max. fuel capacity: 32,940L

A321neo ranges, with Additional Centre Tanks (ACT) and Rear Centre Tanks (RCT)

A321neo: 3500nm
A321LR (ACT): 4000nm
A321XLR (RCT + ACT): 4700nm
A321XLR (RCT, no ACT): 4200nm

‘Qantas was certainly keen to get in on the A321XLR early with its firm order’

Australian and regional XLR orders are
almost certain to grow

Qantas was certainly keen to get in on the A321XLR early with its firm order for 10 new XLRs and the conversion of 26 existing A320neo family orders. The announcement noted that “the aircraft will allow the Qantas Group, which includes low-cost carrier Jetstar, to improve its network and fleet flexibility to better serve point-to-point markets in Australia, Asia and the South Pacific.”

Australian Aviation spoke with François Caudron, Airbus’s vice-president of marketing, for his view on what the order means for the region.

The key for carriers, Caudron said, is that “it will give them to the ability to open up routes which don’t have the traffic that justifies a widebody.

Caudron highlights that getting the aircraft size right is important for airlines – and for passengers. “It’s the same equation everywhere around the world, whether you’re in Australia, Indonesia, in Europe or the US, it’s all about if an airline flies, let’s say, an oversized aircraft on a route that doesn’t justify it, someone’s paying for those empty seats. And it’s either the airline, who’s basically missing some revenue, or the passengers, who are paying a price that is overpriced compared to what they should be paying if the model was rightly sized. That’s the beauty of the XLR, and like every other passenger around the world, they’re going to have now the ability to buy a seat at the right price on those point-to-point routes.”

At the air show, and in passenger and industry reaction afterwards, there was much concern about the passenger experience of the A321XLR, which is discussed further in this month’s Cabin Pressure column (see page 82), but which revolves around lavatory availability, seat comfort, stowage, stretching space, crew space, and provisioning capacity for food and beverages.

Those questions will be most pressing on Cebu Pacific, the Philippines ultra low-cost airline that also launched a new maximum-capacity 460-passenger version of the A330-900neo aircraft at the show, set expectations that its A321XLRs will be as dense as possible, within the 244-passenger emergency evacuation limit.

Airbus’s Caudron, though, doesn’t expect this to be the norm, noting that while the aircraft’s systems remain designed for maximum-passenger operations, “passenger acceptance” of ultra high-density layouts will differ markedly between full service carriers with multiple cabin products and all-economy low-cost and ultra low-cost carriers.

“It remains to be seen, but I don’t think we’re going to see many 240-seat configurations all over 4,700 nautical miles,” Caudron said. “I think that would be really tough. It’s just that the density of the population on the aircraft would be such that, when you walk into the aircraft, when you live in the aircraft for 10 hours, it’s probably not the kind of environment and the feeling that you want to have.” That said, Caudron made the valid point that the ultra-vlow-cost Cebu Pacific sets passenger expectations very clearly and has “a very special market, and they’ve made it clear. They’ve explained it to all of us that this is what they need to do, because they are in a very low-yield market, and therefore they need high volume … they are really configuring their aircraft to meet their market. And one of the points they made very clear, is that they are lacking frequencies. And therefore, they need the bigger bus, basically to carry as many passengers as they can. It is addressing a different market.”

The impact of the MAX and the XLR on the future of commercial aviation remains murky — but massive

With ungrounding of the MAX before the end of 2019 looking increasingly unlikely, every moment that passes allows Airbus to continue delivering A321LRs, to get closer to the delivery of the first A321XLR, to execute its intended pricing strategy for the A330neo, and to corner a growing portion of the middle of the market which both airframers agree sits somewhere between 5,000 and 6,000 aircraft over the next 20 years.

Boeing could have expected to achieve an NMA business case based on winning 50 per cent or more of the middle of the market before the MAX disasters and ongoing issues with its recertification. But that percentage shrinks as the MAX grounding continues and without the launch of the NMA.

As the months pass, the reputational damage to the MAX, and by extension to Boeing, also increases. And it shortens the time Boeing was expecting to have between the launch of the NMA and its replacement for the 737 MAX, which it calls the Future Shorthaul Aircraft (FSA). Boeing can’t run the NMA and FSA development at the same time, even with the input of designers and engineers from its acquisition of Embraer’s commercial aviation business.

The complexities for Boeing are immense, and they’re made even more so by the ‘rock and a hard place’ strategy that Airbus is putting in place with its updated combination of the A321XLR and A330neo.

Never before has the future of the narrowbody end of the commercial aviation market – the end where some 30,000 aircraft are forecast to be needed over the next 20 years – been so uncertain, so turbulent, and so unpredictable.

Commercial aviation, with its massive capital expenditure requirement, technological complexities and lead times, requires predictability to operate efficiently. It’s impossible to overstate the problems that will be generated if the turbulence is not calmed and predictability restored.