Airbus takes on MAX

Note: Plane Talking has this detailed story also about NEO v MAX.

Boeing has been engaged in a campaign for months with the media, analysts and appraisers (and airlines, of course) that the 737 Next Generation is 8% more economical than today’s Airbus A320 and that the new 737-8 MAX will be 7% more economical than the A320neo. While Airbus has dismissed both claims (and so have airlines we’ve talked to), for the first time Airbus has struck back by revealing its own analysis of NEO vs the MAX family.

AirInsight received a briefing from Airbus at the ISTAT European conference in Barcelona, Spain, September 20. During this briefing, Airbus provided its analysis by sub-type, in detail—something Boeing has so far declined to do for its 737NG and 737MAX.

Boeing, in media briefings prior to the Paris Air Show, confined its direct comparison to the 737-800 and the A320. Following the roll-out of its MAX, Boeing provided some general data to illustrate its assertions that the 737 family is more economical than the Airbuses.

The issues are detailed and complex. Before getting into the Airbus briefing, it’s necessary to provide context and background.

Assumptions

The assumptions used by an airframe manufacturer in determining economics are critical to the debate. Boeing and Airbus—and AirInsight—use different assumptions to reach their conclusions.

• Stage length: Boeing (and Bombardier) use 500nm stage lengths; Airbus uses 800nm. Airbus uses the longer stage length as more representative of a typical airline mission. AirInsight uses 1,000nm as a distance we believe is even more representative of A320/A321/737-800/737-900 stage lengths; the A319 and 737-700 are more typical around 800nm (all data in US operations). The 737 tends to be more economical on the shorter ranges and the A320/321 tends to be more efficient on longer ranges.
• Seats: The OEMs typically assume typical two-class configuration most commonly promoted on the respective websites. Thus, Boeing and Airbus assume 162 seats for the 737-800 and 150 seats for the A320. The seating for the 737-700 and A319 are 125 seats and for the A321, the companies disagree on the assumptions. Airbus assigns a 12-seat advantage for the A321 and Boeing assigns only a three seat advantage to the Airbus. For the NEO, Airbus is adding three seats to the A320 but Boeing doesn’t assign this addition, arguing it could do the same thing with the -800/-8.
• Winglets and Sharklets: Boeing adds the forthcoming sharklets for the NEO and future A320 family; since the 737 family almost universally has t optional winglets installed at the factory, both OEMs assume the winglets as standard on the 737. When MAX assessment is undertaken, therefore, winglets are assumed and the benefits from MAX are confined to the engine and aerodynamic improvements.
• Performance Improvement Packages: PIPs are routine. Boeing assumes its practice of PIPs periodically that have, to date, shaved 7% off the operating cost of the 737NG. Other than sharklets, Boeing does not assume any other PIPs for the A320 family going forward—a point Airbus disputes. Airbus has undertaken aerodynamic improvements to the family and the engine providers have done technical improvements that reduce fuel burn and maintenance costs. Including sharkets entering service next year, Airbus says fuel efficiency on the family has improved 9% since the 1988 introduction of the A320.
• Fuel burn: Airbus claims, up to now, that the NEO will be “up to” 15% more efficient than today’s A320. Boeing at the Paris Air Show media briefing gave Airbus only 13%. At the MAX briefing, Boeing gives Airbus the 15% when making comparisons.
• Other factors: Airbus, Boeing and AirInsight include a variety of other factors in evaluating economics. Crew, fuel, maintenance and other costs, landing fees and other data as reported to the US Department of Transportation on Form 41 are included. Airbus and Boeing calculate ownership costs, which AirInsight does not do because we don’t know what airlines actually pay for the airplanes. Boeing assumes a 20%-25% advantage for the 737-800 over the A320, based on DOT numbers. Airbus claims Boeing assumes every disadvantage for Airbus, unfairly. For example, Airbus claims that Boeing uses the least efficient engine on the A320 in making its calculations rather than the most efficient.

Airbus challenges Boeing assumptions

Airbus asserts that Boeing takes the worst-case scenario for in-service A320 family products and compares them with the best-case 737NG or MAX. For example, Airbus says that Boeing uses the oldest CFM-powered A320 vs. the latest technology V2500-poowered A320. (The V2500 has somewhat better fuel economy than the latest CFM56-5B, Airbus says, and the -5B is better than earlier versions of the CFM56 used on the A320.)

Boeing also uses publicly available Department of Transportation (DOT) Form 41 data for its analysis, which Airbus says can be somewhat misleading (AirInsight agrees and will discuss this below).

The chart below illustrates Airbus’ view of the errors in Boeing’s view of the comparisons.

Source: Airbus. Click on the chart for enlarged, sharper image.

One point in the chart above: Boeing says it does include the sharklets in its analysis.

The Claims

Airbus claimed:

• The A320neo was up to 15% more efficient than today’s A320, with sharklets accounting for 3.5%-4% of the gain and the engines accounting for the balance;
• The NEO- and sharklet-equipped A321 is more efficient than the 737-900 and a better 757 replacement than the 737-900; and
• Little was focused on the A319neo other than the general claim it was more efficient than the 737-700.

Airbus , up to now, has been largely general in its public statements.

At the Paris Air Show briefings, Boeing claimed:

• The 737-800 is 8% more economical, all-in (operating and ownership costs), than today’s A320;
• The 737-800 would still be 2% more efficient than the A320neo;
• A re-engined 737-800 would restore the 8% advantage;
• A New Small Airplane would be twice as economical over the A320neo than the 737RE would be; and
• The 737-700 and 737-900 were not as good as the -800 over their respective Airbus competitors but still had an advantage.

Following the launch of the 737 MAX, Boeing claimed:

• The 737-8 is 4% more fuel efficient than the A320neo and 7% more economical on an all-in operating cost basis (including ownership costs, maintenance, landing fees, etc.); and
• The 737-9 is 5% more economical all-in.

Because so much about the MAX remained undefined at the MAX concept roll-out, Boeing didn’t have—and still doesn’t—have more detail that it is willing to share with journalists or analysts. We have made repeated requests for a detailed briefing and to date all have been declined because Boeing has not completed its design of the MAX.

One key element in the NEO vs MAX debate is fan size. Airbus says that each half-inch change in the fan diameter equals 0.5%, exclusive of other factors. The LEAP on the A320neo is 78 inches; the MAX is expected to be 68 inches. By this standard, this puts the 737 at a 5% disadvantage before any other factors are calculated.

What the Customers Say

Customers we have talked to are skeptical of the Boeing claims of MAX vs NEO, largely because many details the airplane and its LEAP engine remain undefined. One potential customer, in what may be a bit of hyperbole, terms the MAX a “paper airplane” and the LEAP “A paper engine.”

One airline that operates A320s and 737s assesses the MAX as simply returning to the “status quo,” with a 2% all-in advantage over the A320neo. This characterization means that the 737-800 is only 2% better than the A320, contrary to Boeing’s claim of 8%.

What the Engine Makers Say

CFM and Pratt & Whitney provide the LEAP and the Geared Turbo Fan for the NEO and CFM has the sole source engine for the MAX. CFM stresses its heritage of reliability and promises maintenance costs equal to the CFM 56 and fuel burn reduction of 15% vs the CFM 56 in pitching its NEO market. This includes a 78 inch fan for the NEO.

PW claims a 25% maintenance reduction over the International Aero Engines V2500 (a consortium of which PW is a partner) and 16% fuel burn reduction for its NEO-GTF with a 78 inch fan.

PW’s early success in winning the engine orders on the NEO prompted CFM to revamp its design with a larger engine fan and revised internal components. The initial LEAP design was 2%-4% less efficient than the GTF, airline and Airbus sources told us. The larger fan and other changes have nearly, but not entirely, levels the fuel burn, we are now told. CFM claims its NEO LEAP will have equal SFC to the GTF, while others tell us that GTF will have a 1% advantage. Airbus is staying out of this argument, having to maintain neutrality between the two engine makers.

 

Click on the chart for enlarged, sharper image.

The NEO GTF has an 81 inch fan and the NEO LEAP has a 78 inch fan. Based on the 0.5%-per-one-inch theory, this means that all else being equal the LEAP starts with a 1.5% disadvantage that has to be made up in a hotter running engine and more “sporty” technology. Only time will tell who is correct.

CFM, at the ISTAT Barcelona meeting, claimed that the 66-68 inch fan under consideration for the MAX won’t materially adversely affect fuel burn because internal design changes will regain this efficiency.  (Since ISTAT, we have learned that Boeing has decided to use the 68 inch fan, a decision Boeing has not announced.) This is achieved through running at hotter temperatures while maintaining cooler components through the addition of cooling components. PW claims these additional vanes will increase maintenance costs.

Airbus says that the smaller fan means Boeing at best will be able to net only an 8% fuel efficiency vs the 10%-12% Boeing claims. Trade factors of larger fans include increased drag, a heavier engine and heavier structures to support the larger engine. Trades to support an efficient, reduced fan engine are different materials and hotter temperatures, increasing maintenance costs. A 66 inch fan limited growth potential, we are told, while a 68 inch fan is more conducive to potentially growing the engine to a later size of 71 inches. A 66 inch fan means Boeing doesn’t have to change the landing gear. A 68 inch fan may not require a change but we are told Boeing will “slightly” increase the length of the nose gear but not the main gear. A 71 inch fan will require more extensive changes.

PW and CFM are making aggressive claims. Steven Udvar-Hazy, CEO of Air Lease Corp., said at ISTAT that the proof of the claims will only emerge after six-eight years of operation.

PW says that with the GTF technology chosen for the Mitsubishi MRJ, the Bombardier CSeries and the early NEOs, the GTF will have 4m hours of operation before the first NEO-LEAP enters service in late 2016.

The controversy might be summed it with this question: If CFM had to upsize the fan on the LEAP to be competitive with the GTF on the neo, how can it now downsize the fan for the MAX and achieve the same result? While the MAX LEAP engine will be seven inches larger in fan diameter than the CFM56 it replaces, the fan is still dramatically smaller than the LEAP on the NEO and even smaller than the NEO’s GTF.

AirInsight has asked CFM for briefings, which for the moment have been declined because there remains too much to be done on the engine design. We look forward to the briefings when CFM is ready.

NEO v MAX

It took a long time to get here, but now let’s talk about the Airbus briefing we received at ISTAT. The following three charts illustrate the current airplanes vs the competitor and the re-engined aircraft vs the competitor. A key element to keep in mind is that Boeing talks about total costs: ownership and direct operating costs. Below, Airbus is only talking about block fuel comparison. Thus, we’re talking about apples and oranges, regardless of the benchmark that is being used. Boeing doesn’t talk about block fuel comparison and Airbus doesn’t talk about total costs.

A319 v 737-700

Current Status: According to Airbus, the 737-700 is at a fractional disadvantage (less than 1%) in  block fuel per trip on segments of 500nm to 2,500nm to the 737-700W (winglet). With the 737 PIPs that are just entering service, Boeing would gain an advantage over the A319 of less than 2%. The MAX, according to the Airbus assessment, will be not quite 10% better than today’s 737; 8% better than the 737 with the PIP; and slightly less than 10% better than today’s A319.

Click on photo for an enlarged, sharper image.

Future Status: Airbus , which has up to now claimed the NEO is “up to” 15% better than today’s A320 family, revealed for the first time that this is “conservative,” said Mark Pearman-Wright, head if leasing and … for Airbus. According to the chart below, the A319neo will be slightly  more than 15% better than today’s A319 at 500nm and about 17% better at 2,500nm. Airbus concludes that the A319neo will be 7% better than the 737-7 on a per-seat and a per trip basis.

A320 v 737-800

Current Status: Boeing claims an 8% advantage over the A320, which is disputed by Airbus and which one airline says is only 2% all-in (including ownership). Airbus’ briefing with AirInsight, Airbus displayed a chart that on block fuel presents an opposite picture.

Click on photo for an enlarged, sharper image.

Future Status: According to Airbus, the NEO has far and away better fuel consumption than the 737NG or the 737’s enhancements now entering service; and about 12 percentage points better consumption than the MAX.

A321 v 737-900ER

Current Status: Airbus acknowledges that the A321, as a slightly larger aircraft than the 737-900ER, burns more fuel and the 737’s 2% improvements now entering service widens this gap. Indeed, in the recently concluded Delta Air Lines competition, we are told that “economics” for the 737 won Boeing the deal. There had been market information that Boeing came in with a price that was 10%-15% lower than Airbus, but we since have learned that the price of the airplanes were very close. The Airbus chart below may tell the story on the Delta analysis.

Click on the chart for enlarged, sharper image.

Future Status: Airbus concludes that the neo not only gains an advantage over the 737-900ER but will retain an advantage over the new 737-9.

Who is right?

Who is right, Airbus or Boeing? It’s impossible to know. While the NEO is defined, it still is in development and flight tests followed by operations will be the proof, as Steve Hazy said in relation to the engines. Boeing’s MAX is, at this writing, still undefined. Boeing hasn’t settled on the weights and a number of other technical factors but we are told by one Boeing insider that the company is confident enough within small parameters to make its claims.

Boeing hasn’t discussed model-by-model data with journalists nor will it make only a block fuel comparison, turning down our requests for both data points. Airbus provided a model-by-model block fuel comparison but declined a cash operating cost analysis.

“With the NEO we are common with today’s A320 operation,” an Airbus spokesman wrote us in response to our COC comparison request. “The A320neo is an A320. So the costs of this aircraft are well known by the airlines which have chosen it — and have been known for many years. For the NEO, the only thing which changes is the powerplant (plus Sharklets), and the overall large reduction in fuel-burn which these bring.

“Boeing, on the other hand, is making extensive changes throughout the whole aircraft to enable it to take the larger engines, whose fan diameter is being dictated not by installed cruise efficiency, but crucially, by the geometrical constraints of ground clearance. It is fair to say that if the 737 had more ground clearance available, then they would make its fan bigger than they are currently talking about.

“With our aircraft, we are not only adding an engine option with an optimised fan diameter which will result in the best possible SFC and installed efficiency, but also when we add in our Sharklets, we get additional fuelburn savings, over and above what we already gain with the engines. And, importantly, over and above whatever Boeing can do with their MAX.”

One area that Boeing emphasized in Paris Air Show and MAX briefings where it says the 737 has a significant advantage over the A320 is maintenance costs. Boeing claims a 20%-25% advantage and cites US Department of Transportation Form 41 data as its source. Airbus disputes the conclusions, saying Form 41 data isn’t entirely reliable. Indeed, for those of us who track this data, we are well aware that airlines often report their numbers differently, skewing the data and presenting the prospect of “garbage in, garbage out” when trying to analyze something. But it is the only publicly available information available and it is what we, and others, have to rely on.

“A word about neo maintenance costs,” the Airbus spokesman wrote us. “For airframe and systems, these will be same or better than today’s A320. (I say ‘better’ because the maintenance programme is constantly evolving.) Re engine maintenance, you need to talk to the engine manufacturers. However, it is safe to say that the engine maintenance costs will be as good as or better than today’s A320 Family engines.”

For Airbus, its analysis of the 737 MAX is sort of like shadow-boxing: it doesn’t really know what its opponent truly is. This is our problem in trying to make an independent assessment at this time, and it is the problem of airlines and lessors as well. But we took a stab at it anyway.

We asked one of our resources to use the analytical tool, PIANO, to assess the airplanes based on the sketchy information known today. The results:

737-7 vs A319neo

Fuel burn per seat: NEO is better by 3%

COC per seat mile: NEO is better by 4%

COC per trip: NEO is better by 1%

737-8 vs A320neo

Fuel burn per passenger: MAX is better by 4% (with 12 more passengers)

COC per seat mile: MAX is better by 4%

COC per trip: NEO is better by 3%

737-9 vs A321neo

Fuel burn per passenger: NEO better by 2%

COC per seat mile: NEO better by 1%

COC per trip: MAX better by 4% (at 5% less capacity)

However, it must be noted that PIANO analysis requires inputs for weights and costs—which Boeing hasn’t revealed and may not yet have settled upon. Thus, the PIANO data—while good with the inputs used—remain guesses as well.

Our conclusion

If this were political polling, the results at this time would be within the margin of error.

There is still too much that is unknown about the MAX and LEAP designs for either manufacture to make claims that can be reliable when comparing the planes with each other.