A Commercial Aviation Consultancy

Having won the US Air Force tanker award, keeping the Boeing 767 production line active for the foreseeable future, should Boeing introduce an updated commercial version of their venerable (and highly successful) small wide-body aircraft?  We believe that the time could be right for a 767NG, with new technology engines and an upgraded interior.

The Business Case

For many customers, the 787-8 is simply too much aircraft for their existing route structure.  Transatlantic operations need 5,000 mile range, not 8,000 mile range, and the extra weight required to support the long-range capability make the 787-8 heavier that it needs to be for such routes.

Despite its use of composites, the empty weight of the mature 210 passenger 787-8 will be 242,000 pounds, which is 22% heavier than the 198,440 pound, 218 passenger 767-300ER.   While the 787-8 will fly thousands of miles farther, a transatlantic (or any 5,000 mile route for that matter) operator does not require ultra-long range capabilities.

Physics are physics; the thrust required to lift a heavier aircraft is greater than that required to lift a lighter one.  If appropriate new engine technology, from Rolls Royce, GE or Pratt & Whitney were available for the 767, we believe this aircraft would offer seat mile costs approaching those of 787 or A350XWB on shorter routes, and wouldn’t require the technology risk, capital investment, or re-training of pilots for airline operators.

With the 767 already a major player in the transatlantic market, a 767NG would enable customers to maintain a great deal of fleet commonality and upgrade their medium range fleets with the NG while adding the 787 for their long-range operations.  A fleet change is a traumatic event for an airline, with ramifications throughout the organization, including spares, MRO, and crew training.  Upgrading a fleet maintains commonality and enables smoother, lower cost fleet transitions.

The airlines know this well, and have learned that lesson from Boeing, which has kept the 737 (first introduced into service in 1967), competitive with newer Airbus models through the NG process and continuous improvements.  Should Boeing do the same with the 767?  We believe it could and should.

The PW4000 engine that has been selected for the Boeing tanker is mature technology and, with rising fuel prices, will need to be replaced by new technology engines, just as JT3Ds were replaced with CFM-56 on the KC-135.   The Rolls Trent, GEnx, and PW GTF are all possibilities for new, more fuel efficient engines that could be applied to the tanker and 767NG.

Having Pratt & Whitney replace the PW4000 with a version of its new technology GTF engine could improve fuel efficiency and performance of both the tanker and a commercial 767NG, and potentially be part funded by the Pentagon (and PW).  An opportunity to leverage the tanker contract for the commercial side of the business now exists, and provides a unique window of opportunity for Boeing.  Boeing has already moved the 767 to an exceptionally cost-effective lean manufacturing process, with lower costs than the previous process.  With development costs long written off, the costs of an NG program would be quite manageable, and low risk.

A 787-like interior, combined with new engines, updated avionics, and other minor upgrades could result in an extremely cost-effective airplane, and should extend the commercial program life another two decades. Since the tanker contract is a 40 year program, Boeing could cost-effectively continue production of a 767NG for the foreseeable future while either generating very high margins or enjoying a significant capital cost advantage over Airbus.

Cannibalization of the 787

While this could likely take some business away from the 787, it could reduce risks for Boeing, who by moving the 767 to a low cost manufacturing process could generate substantial profits on an aircraft it could price to very effectively compete with the A330.  It would take delivery pressure off the 787, and help that program by easing the production ramp-up for the Dreamliner. It would also help to reduce and possibly turn defecting customers who have been buying the A330 given 787 delays.

Airlines don’t like to pay for things that they don’t use.  One of those is the capability for ultra-long-range operations.  The additional structural weight required is a detriment when an ultra-long-range aircraft is operated on routes that can’t exploit its unique capabilities. That extra weight makes the 787 difficult to justify as a true 767 replacement, because the 767 became a success as a medium haul airplane capable of handling trans-Atlantic, US transcon and even US to Latin America routes. The 787-8 certainly can perform well on all these routes, but  a re-engined 767 would be nearly as cost-effective.

With -ER and -LR versions of virtually every wide body aircraft becoming the standard offerings, Boeing appears to have forgotten about the bread and butter routes many airlines fly, and the A330 is capturing an increasing share of that market. Why buy a fleet of extra-long range aircraft if you only have a couple of routes that long?  Why pay extra for things that you don’t need?  About twice a year, I need a truck, but haven’t purchased one because a car meets my normal needs quite well.  We typically don’t pay for this we don’t need out of our own pocket, and airlines, under increasing pressure from rising fuel prices, are coming to the same conclusion!

The Bottom Line

The tanker win, combined with new technology engines, could give Boeing an opportunity to quickly, cost effectively, and very profitably serve a market niche it helped create, and gain a strong competitive advantage in the process. A re-engined 767 would be a highly disruptive airplane.

A GTF version of that size thrust engine could therefore power both. We suspect that such a size GTF is exactly what PW is working on. Listen to Scott Hamilton’s interview with P&W’s Bob Saia for confirmation. The size of the market is too attractive to ignore.

Similarly, the GEnx engine, which exists today, could be used for the 767 and A330, and no doubt GE is aware of that potential. Fundamentally these aircraft are excellent designs that could see dramatic performance improvements from new engines.

Has management taken its eye off the ball, seduced by new airplane designs and the bragging rights that go with unique capabilities?  The tanker win might be just what Boeing needs as a wake-up call for a 767NG upgrade.  It may be time to re-think product strategy in Seattle, and focus on success.  The 737NG has been extremely successful.  Perhaps it is time for the 767NG to replicate that success.

© 2011, Ernest S. Arvai. All rights reserved.

15 Responses to Is It Time For The 767NG?

  • Excellent piece. My one question is why was the 787-3 shelved? That’s your domestic/regional, shorter wingspan, lighter weight 787 Dreamliner..

  • Sorry this is BS. To make a 67NG and sell for another 10-20 years you need a new wing, new avionics, new engine, more composite materials to make it lighter. In the end you have new plane like 748i 737NG that has nothing to do with the previous in terms of spares and crew traing, ie a new type.

    • Oliver2002-for the most part, I don’t see a B767NG either…but it does have more merits than a niche plane such as the Boeing 747i/f.

      At the end of the day, total cost of building the plane (money/resources, etc.) would probably dictate where Boeing would go.

      If it doesn’t cost too much, I think even possible a new wing and skin would work-but new engines, interiors, cockpit wouldn’t probably cost too much and does offer something which many carriers would like. I think AA, UA/CO and DL would purchase a number of them.

      AA has 73 B767’s (200/300). DL has 93 of the B76 variant, 35 with UA and 26 with CO. Add the international carriers such as JL, NH and other carriers and the B76NG wouldn’t do too bad.

      Its worth a look-but not worth if it takes resources from other items such as a B77NG/replacement, etc.

  • If the A300NG is an A330, Airbus has been successful.

    As the article states, there is a void to replace the A310 and 767.
    If CRFP is all its cracked up to be, then a new plane is the way to go. Choosing the right cross section is a gamble, less drag or more cargo.

    If Aluminum can still compete, Boeing has simple path, build a 767NG. Then in 15 years, Embraer can build a CRFP A310 to take its place.

  • They already are losing heaps on the 787-8 it with cost overruns and overselling them at dirt cheap prices.

    The last thing they would want to do is to make a 767NG to cannibalise any further chances of selling more 787-8..

  • Three questions: why would Boeing build a 767NG that has the potential to eat into 787 sales when numbers tell us Boeing is still in a loss position on the latter and needs every sale it can get?

    Also, where would Boeing fit this 767NG development in between a new narrowbody, getting 787s out the door and a 777NG?

    And lastly, who will this 767NG be marketed to and why would the market react any differently to it than it did Airbus A330NG i.e. A350 v.1?

  • Readers may (or may not) be amused to know that even AirInsight internally sometimes disagrees with each other. I believe the concept Ernie posted is spot on, except that I would not bother with Trent 1000, GEnx or GTF engines. PW is, for the tanker, undertaking a PIP (Product Improvement Package) that will reduce fuel consumption by 2%-3%, which is a big number. PW (in response to my question at its media day) will apply this to the commercial line as well.

    With the 767 already being retrofitted with winglets (~3.5% fuel savings) and a 2%-3% PIP from PW on the PW4000, you have around 5%-6% SFC reduction.

    I’d keep the current 767 cockpit with perhaps some normal upgrade, such as standard RNP, and undertake some other low-cost enhancements. Now you have a low-cost “767NG” that has essentially no R&D with ~5% better SFC that can better compete with the A330 family. There’s more to our concept, but I’ll stop here.

    Scott Hamilton

  • I’m sorry, if you present a new(er) aircraft that will save only single digit % in fuel over the next 20 years, the airline industry will have a good laugh and show you the door. Operating costs of the 67 are already not stellar…

    What you describe is already what was done when the 67-400ER series launched in the late nineties:
    – new flight deck common to 777 and 737NG.
    – wing modifed to the 777 logic with wingtip extensions
    – landing gear commonalities with the 777

    Lets not forget the 67 is an aircraft designed in the late 70s to counter the A300 and A310 and provide a larger option beyond the 57. The A330 proved to be a serious challenger to this type and Boeing upped the game with the 87 (-3, -8 variants) to put all doubts to rest. This bird needs a complete redesign to be sold in serious numbers. They will be better off with offering a shorter 87 variant which is easier to spin off the existing programme. Remember the 764 was only possible because they got cheap labor from the abandoned MD-XX program.

  • Let’s assume a 4500nm mile mission with a full passenger load, that is 269 on a B767-300. Boeing’s ACAP gives a zero fuel weight of ~115t and a take-off weight of ~170t.
    My initial cruise fuel burn (CF6 engine) with 4t burned off for climb and take off is roughly 5.5t/hr at M.8 and FL330.

    The B787 will have a zero-fuel weight of roughly 143t (assuming 120t OEW) and a take-off weight of (guessing the fuel to 60t) 180t. After 4t are burned off the initial cruise fuel burn is around 4.8-5.1t/hour at FL370 and M.85.
    [due to faster speed the distance-specific fuel consumption of the B787 will be even better]

    Hence, the B787-8 (at least using preliminary specifications) will have lower fuel burn despite being substantially heavier. I clearly do not see any chance for a new B767.

  • Not a new idea, I think a highly efficient 767-300(non ER) version could offer very good CASM and medium capasity for r.g. transcon, intra Asia, shorter TATL etc. replacing aging 757s, 767, A300, A310, Tu154. The A330 and 787 are way bigger, heavier and more expensive.

    BTW thought so a yr ago

    http://www.airliners.net/aviation-forums/general_aviation/read.main/4672776/

    Imagine Boeing had launched this for EIS 5 yrs ago.. The question is does Boeing listen to the market or do they know better again..

  • The 767-400 has 2′ more clearance under the current engines than the 767-300. Like the 320neo, it has the potential for a bigger fan, and the GENX is ready to go.

    The 330-300 has outsold the 777-200ER. This could mean that if Boeing or Airbus design a dedicated mid-range derivative, it will eventual outsell the heavier long range models.

    330-300 re-engine?

  • Updating to the newer engines (or the existing engines), the new 787 glass cockpit, and any of the other mods that need to occur to the tanker that would improve sales of 767’s would be a benefit. I would also hope that the glass cockpit etc could be part of the Pax to Freight conversions.

    If the GeNX went on easy (same bleed air units as on the 748) and could also be a replacement engine for 767’s, it should be studied if there would be a return on the investment. I would think that is a stretch though.

  • Comparing the 787-8 to the 767-300ER is incorrect. The three-class seating capacity of the 787-3 is 242 passengers (http://www.boeing.com/commercial/airports/acaps/787brochure.pdf), comparable to the 243 three-class passenger 767-400ER, not the 210 three-class passenger capacity 767-300ER (http://www.boeing.com/commercial/airports/acaps/767sec2.pdf).

    That said, there may be a need for a smaller aircraft than the 787-3, and a 767-300ER “Advanced” might have some value. Put the 767-400ER wingtips (or the Aviation Partners winglets, whichever works better), and downrated 787 engines, and the KC-46 flight deck on the new 767, and it might work. Maybe the 767-400ER flight deck would make more sense for compatibility with 767 simulators.

  • it’s a natural and usaf funded progression

    long live the 767

    please read my 26 february take on this

    http://planetalks.blogspot.com/2011/02/767ng-from-kc-46a.html

  • I think this is a worthy idea.

    The 787-8 is a 250 seat (international two-class) airplane, in the same size class as the 767-400ER and the A330-200. It also has full U.S. market transpacific range.

    The 737-900 and A321 are 175-180 seat (domestic two-class) aircraft with transcontinental range aircraft. Even with their new engine options, they will not have the range performance to replace the 757-200s in transatlantic service with Delta, Continental, American, and US Airways.

    The 757-200 is a 175 to 200 seat aircraft with limited transatlantic range performance. The 757-300 is a 225 seat (domestic two-class) transcontinental range aircraft.

    The 767-300ER is a 200-225 seat (international two-class) full transatlantic/limited transpacific range aircraft.

    There really is not a replacement for the 767-300ER on the horizon. The A330-200 continues to sell well, especially with its new increased gross weight version, but it is a 250-seat class airplane like the 767-400ER, but with a longer range.

    The gap between the 175-seat domestic 737-900/A321 and the 250-seat international 767-400/A330-200 airplanes is currently filled by the 757-200, 757-300, 767-200, and 767-300. When transatlantic 757-200s, transcon/Hawaii 757-300s and 767-300s, and transatlantic 767-300ERs face retirement, Delta, Continental/United, American, and US Airways will all face gaps in their fleets.

    My estimate is this represents a market of 200-300 airplanes worldwide, with the sweet spot being in the 180 to 220 seat, international two-class, 6,000nm range category.

    Such an aircraft could be based on the existing 767-300ER airframe, with either the 767-400ER or KC-46A flight deck; either the existing 767-300ER wing with blended winglets or the 767-400ER wing with raked wingtips; and GEnx engines. The current 767-400ER Boeing Signature Interior is modern and adequate for passenger needs. Standard aftermarket 767 options such as the TIMCO Lower Lobe Crew Rest module would allow long-range flight options.

    Incremental improvements such as blended winglets have improved 767 seat mile costs, but the improved aircraft would need weight and aerodynamic improvements and new engines to make it worth the investment. The goal should be seat mile costs competitive with 757-200s when flown on northern transatlantic routes.

    A side benefit of an advanced 767-300ER project is the opportunity to offer an advanced 767-300F freighter, and amortize the development across a larger market. This is similar to how Boeing is leveraging the freighter market to develop both the 747-8F and 747-8I. Likewise, the KC-46A project ensured the 767 line continues for another decade. Finally, by going through the improvement exercise on the 767, Boeing would then be prepared for an advanced version of the 777-300ER needed to remain competitive with the A350.

    Without an aircraft in this size/performance category, many secondary international transatlantic markets will lose their direct flights as the 757-200 and 767-300ER are retired.

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