Insight: Thursday 22 October 2020: Boeing fights back?

The news reports in the Wall St. Journal that Boeing is planning a new large narrow-body aircraft to combat the A321 is interesting, both from timing and product strategy timeframes.  With the MAX closing in on certification and a return to service, Boeing realizes that it needs a better competitor to the A321 than the MAX, which simply doesn’t compete well at the higher end of the seat range.

But that higher end of the seat range, combined with longer-range capabilities, places the A321 as the natural replacement for the 757 in the middle of the market.  The segment that Boeing initially created with the 757 and 767 has effectively been conceded to Airbus, as Boeing doesn’t offer a truly competitive product.

Market shares in the narrow-body marketplace have been fairly level in recent years, but the future backlog shows Boeing with a 60-40 lead without accounting adjustments, and 65-35 with them.  The panic point at Boeing is a market share lower than 40%, and that number has been reached.  Boeing needs to do something to regain share.

For the last few years, Boeing has shopped a small wide-body, basically a 767 replacement, to airlines as the NMA or New Middle-market Aircraft concept.  Unfortunately, it failed to gain enough traction to make a strong business case for Boeing and has been put on the back burner.  Now, a second NMA or NMA2 is being floated to airlines.  It will be interesting to see if it can attract more interest than its predecessor.

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