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Rumors about a Boeing 757 replacement from Airbus have been swirling for months.  Many industry followers have been discussing the Boeing 757 replacement “gap” – because the aircraft OEMs today tout as replacements, the A321neo and 737MAX9, don’t quite meet the bar.

The Boeing 757 is a special aircraft with unique payload/range capabilities.  The way the aircraft is used today is quite different than what was envisaged at EIS.  The capability to operate long thin routes enables it to develop new markets, connecting secondary cities in the US with the same in Europe or South America.

Airbus shared with us that their design concept and it consists of the following key data points:

  • True transatlantic range (100NM more range than 757-200w)
  • Similar seat count to 757 but with true long range comfort. Lie flat bed business class and 18″ wide economy comfort.
  • 25% lower cost per seat vs 757.
  • MTOW of 97 tonnes and three extra fuel tanks.
  • EIS is currently foreseen around 2019?.

In addition we understand Airbus is not committed to this concept without sufficient orders.

So what we have here is a conversation piece for now.  However, where would Airbus start to make its sales pitch?  Clearly it would aim at any and all 757 operators.  As of today, there 963 Boeing 757s in operation.  The chart shows us where they are located.

Airbus is obviously going to focus on the North American market where 71% of the Boeing 757 fleet is located.  That means focusing on three major customers, American, Delta and United.  The current 757s are likely to retire and if they have a second life, it will be at FedEx and UPS.  To sell a new 757 replacement therefore means pitching the Big Three carriers in the US.


We note that the very first item listed by Airbus in describing the new concept is “true transatlantic range”.   While there is a lot of focus on this market by industry analysts and pundits, the reality is that this market is really quite small.

Take a look at this screen shot from FlightRadar24 of Boeing 757s in flight this morning. There are perhaps only a dozen aircraft – under two percent of the fleet – flying trans Atlantic routes.  A senior Airbus official shared with us that they estimate the trans Atlantic 757 replacement market is perhaps as many as 40 aircraft, or four percent of the fleet. That is clearly not enough volume to launch a program.


So what is Airbus up to here?  While described within Airbus as “project study for a higher maximum take of weight version of the A321neo”,  there has to be more to it. This is a disruptive move and we do not believe the timing on this news is related to the current Boeing reporting period.  Indeed, a number of people we spoke within Airbus were surprised by the news.

Some thoughts on the 757 replacement project:

  • Leveraging an existing aircraft design reduces development costs, and the A320neo, particularly with the additional 2% fuel burn reduction available from Pratt & Whitney in 2019, will provide a significant advantage in operating economics.
  • The A321neo may require a bit more tweaking to become a true 757 replacement – but the additional range is the major difference today. The A321 has similar size, but initially had too short a range to effectively compete with the 757 on trans-continental routes in worst-case conditions. The neo, with improved fuel burn combined with additional fuel tanks solve those problems.
  • This move, tantamount to throwing down the gauntlet to the 737MAX9, is quite clever. The 737MAX9 cannot do what the 757 does, which Icelandair has confirmed to us. The 737MAX9 also suffers from runway performance limitations, like the 737-900ER from which it is derived. Consequently, Boeing will be under some market pressure, and they will certainly not take the potential loss of market share with the Big Three US customers without a fight.
  • In addition, with the MAX9 under market pressure, the MAX7 is seeing slow sales, sparking speculation as to whether Boeing will really build the model for a handful of aircraft. If Airbus can put further pressure on the MAX9 and attracts customers for a longer-range A321, the MAX8 will be the only member of the MAX family selling well.
  • Moreover, the MAX200, derived from the MAX8, accomplishes much of the mission for which the MAX9 was intended.

It would appear that Airbus is making a smart move strategically. A derivative model of the A321 is low cost and low risk, and can easily integrate with any of the Big Three, each of which operate Airbus narrow-bodies. The A320 family airframe, being newer than the 737 with higher ground clearance, is easier to enhance with new engine technology.

Boeing, if pressured by this move, may be forced to accelerate a 737 replacement. That could be bad news for CFM, whose LEAP 1B is exclusive to 737MAX, as any 737 replacement aircraft will likely require more thrust than currently available from the LEAP platform without upward scaling a new engine.

Boeing could always go back to the well and request more tax breaks to keep Renton in operation long-term and fund a 737 replacement.  Money may not be the hurdle it appears.  But of course this could not be accomplished by 2019 in order to compete with a potential enhanced A320 family.

The Bottom Line

If Airbus is able to attract interest from the US Big Three and launch this aircraft, which could even be built in Mobile thereby making it even more attractive (with potential tax breaks from Alabama?), Boeing will be under some pressure to accelerate its planned new narrow-body program by several years.  Given the importance to Boeing of the 737, there should be no doubt how the company will react – they will move quickly to defend this revenue stream.

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