[UPDATE – Podcast with Scott Hamilton and Jon Ostrower]

We undertook an analysis based on the data available and have to say the Boeing 737MAX looks pretty good.  Indeed, by digging around the 2010 DoT data we were able to establish benchmarks using the 737-800 and A320.  Then we took the improvements promised by the engine makers. The table below illustrates what have been able to derive. A word of caution – the engine OEMs are reviewing our table, and may update our numbers, in which case we will update this post.

Additionally, Boeing and CFM haven’t yet settled on the diameter of the LEAP-1B that will power MAX–66-inches or 68-inches. The difference may be small, but according to Airbus, each inch accounts for about 0.4%  0.5% in fuel burn. (This does not take into account offsetting changes that would be designed into the smaller fan size.)

A key item to consider here is that CFM promises to keep their numbers at least at where they are now on CFM56 but offer better fuel burn and of course a better noise profile.  We see MAX doing over 7% better than the NG.  The is interesting because the LEAP alone drives down costs by nearly 8%, then throw in sharklets and a aerodynamic tweaks and the number should comfortably exceed 10% over the current A320.  The GTF powered A320neo does even better because PW promises that its new engine will offer significantly lower repair costs since it a lot fewer parts.

Which of course only provokes the question – how much better would MAX be with a GTF?  We would estimate 1% better than it looks now, bearing in mind it too would be limited to a ~20% smaller fan.

But of course this all depends on the promises the OEMs are making.  CFM a remarkable record for delivering what it promises and we are confident they will ensure MAX is optimized.  PW is betting its on GTF and from what we hear the engine is beating goals – they are ahead in testing in with the flying testbed by a lot. So there is reason to be confident in that engine, too.  We feel that engine OEM numbers are sound.  We also, at this stage, believe Boeing will stick to “keeping it simple” with MAX in order to avoid program stumbles. Airbus, from what we hear, is hitting its milestones on neo, too.

If everyone’s numbers are sound, based on our estimate, MAX will be about 2% better than neo in cost per hour.

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