First A321XLR delivery completed. Now what?

This aircraft has been highly anticipated. We are among those excited to see it and its promise to disrupt air travel further. Airbus can rightly make a fuss about this news. This model might also be the last touches left over from John Leahy. Here's our video of Leahy announcing the original A320neo program—all 44 minutes. https://www.youtube.com/watch?v=V61iuZV8Iwk&t=1618s A few short years later came the A321XLR launch. https://www.youtube.com/watch?v=msLBKJ2nzvw&t=268s This is why we like making videos of these events: here, you can see and hear the original thinking. Back to the future of the XLR. We published some thoughts on its potential. Here are our thoughts on operational ideas. Recently, we also reviewed the forthcoming Aer Lingus service to Indianapolis. The XLR is special but comes with a small item that is easily overlooked. The A321neo can have up to 10 containers, but the XLR handles 8. You can read all about it here. Will it be disruptive? Probably yes, there are 500 orders already. But as you consider this, take a look at the following chart. [caption id="attachment_87156" align="aligncenter" width="580"] AirInsight[/caption] The A321neo quickly started to dominate the family deliveries. Airlines want the more capable model. We defined the A321NX models here as LR. This may be an error on our part because there are three types of the A321neo: the early version A321neo non-ACF (Airbus Cabin Flex), then the ‘standard’ A321neo ACF at 89 tonnes, and the A321LR, at 97 tonnes with 2-3 ACTs. Airbus didn’t help either, as they were loose in their definition of an LR. Also, some airlines with just one ACT fitted still call theirs LRs. With that caveat, we can confidently say that A321neo customers are moving to the more capable version every year. Reportedly, Airbus thought the LR would be ~25% of the market. It looks like it's closing in on 60%. Regular readers will know that we are big fans of the MoM airplane. What bears repeating—again and again—is that Boeing identified this market. Boeing gave us the 767-200 and 757-200. The 767 grew to its apex as the -300ER. But the 757, even as a -300 disappointed. The 757-200 remains the benchmark MoM. Countless words have been published, excoriating Boeing for not developing a 757 replacement. The larger MAX models can't do with the 757 can. Airbus A321's success is partly because of their tinkering and aircraft improvement. However, half of that success was due to the absence of a competing product from Boeing. Airbus sits on 500 XLR orders, not even in the chart above. How does Boeing miss this opportunity? Airbus now goes forward and delivers these XLRs as fast as they can. The XLR will do precisely what the 787 did—fracture the air travel market further, connecting secondary cities across the globe that are about ten hours apart in flying time. The 787 has been a success, and the Airbus A380 was not, even though the mega city-to-mega city logic was sound. A380s are coming back, but they will remain a niche. Meanwhile, Boeing is in a quandary. It continues to bleed through its latest labor strife and cannot deliver MAXs, its bread and butter program. But when your back is against the wall, choices become clear. Boeing does not have the funding for a new program, but it needs one. Which program does it need most? An A321-killer. And it has one! Remember the 787-3? [caption id="attachment_87157" align="aligncenter" width="474"] Source: Boeing[/caption] As recently as this past summer at Farnborough, Boeing's VP of marketing, Darren Hulst, was asked about responding to the A321XLR. He replied that Boeing's research showed the market across the Atlantic as too small and unattractive. Of course, we looked at the data and found this to be accurate. But Boeing must respond to how the market is moving and evolving. A new program is cost prohibitive for Boeing now. By our estimate, its time to dust off the old ideas around the 787-3. Such an aircraft would offer airlines much better payload (remember the containers numbers further up the page?). While the XLR will disrupt, that disruption is limited. The limits will come from where the aircraft can be used to its fullest. Any city pair that requires large bagge loads is out. And there are lots of those - any EU city to Africa, for example. Baggage and cargo require a larger airplane. Boeing needs a solution. And guess what, Airbus will benefit from that, too. Duopolies feed off each other, the mutual dependence drives them. Who is the person at Boeing who could throw the switch on this?

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