The MoM continues to be a subject of considerable chatter among aviation and financial pundits and analysts. It is generally focused on replacing the Boeing 757. Today, the consensus is that the Airbus A321 continues to be the 757 replacement because it is the best aircraft in the segment. But Boeing has frequently made the point that when speaking to customers, these customers want something more than what the 757 was. A lack of obvious movement on the market by Boeing has been as odd, both by us and others.
But taking a closer look at this market indicates that Boeing is likely doing the right thing in taking its time. Aircraft programs are very big bets, and an incorrect bet can be disastrous.
A MoM aircraft will be difficult because it will be expected to do many things, and do them well. Aircraft are invariably mis-used because there is no perfect aircraft that can do everything. The consensus definition of the MoM starts at 150 seats and goes to 250. Within this, airlines have range requirements from 2,000 NM to over 5,000 NM. Airlines also want the ability to carry a decent sized cargo load along with passengers. Most importantly, which drives OEMs crazy, airlines also want a price point under $100m per plane.
To build an all-purpose aircraft is very difficult. Nobody has anything like it, and consequently smaller aircraft are forced to fly longer stages than they were thought to do (757).  Or aircraft that can carry traffic over very long thin routes (787) are used in shorter operations than the range for which the aircraft was optimized. This points back to the earlier mis-use comment.
It seems that any aircraft that hits as many checks for MoM might focus on 201-250 seats and have a maximum range of about 4,500-5,000 NM. Airline requirements vary widely. But if one can at least define a few parameters and work from there, where does that take us?  We have decided to define the MoM optimized aircraft to seat 201-250 with a 5,000 NM range. This almost certainly points to a twin aisle. We also think airlines will need such an aircraft around 2022 or sooner.
First, let’s look at the market to get some perspective. The chart below shows a yellow section which represents the 201-250 seat market. We regard this as the MoM sweet spot. The chart shows that this segment was 7% of the overall market in 2000 and has steadily shrunk each year to 4% in 2Q16. This segment has been stable at 4% since 2009. The 201-250 seat segment is equivalent to double the size to the >400 seat (VLA) market in 2Q16. The segments showing the largest growth are between 100 seats and 150 seats.
So right away we see that the MoM sweet spot may not be as large a market as first thought. Below 200 seats, in the former 757 spot, Airbus is doing well with its A321 and beating Boeing handily. This has to be annoying to Boeing. But if the MoM is truly 201-250 seats, let’s focus there. After all, this seems to where Boeing’s customers looking at a 757 replacement seem to be focusing.
The next chart will demonstrate that this segment is a Boeing stronghold.
The 201-250 seat has been Boeing’s preserve for a long time. But it was not the 757 that was the market maker; rather it has been the 767. The 767 has dominated this segment. Note no A321s show up here, as they are typically operating with around 180 seats, and the 757s that show up are the larger 757-300 model, not the most popular -200. The A321LR and the A321neo have the potential to be in the segment with tight cabins. But as yet, none are, as airlines still like premium cabins and won’t configure to the 240 seat maximum capacity.
Boeing’s 787-8 looks to be the new segment dominator. Only it currently has the ability to replace the venerable 767 with similar size.  Airbus brackets the 787-8, with the A330 slightly larger and the A321 slightly lower, each a few seats out of the MoM parameters.
Boeing therefore looks to be doing fine since its 787 easily handles the seat capacity and also offers unique, for this segment, payload/range capabilities. In fact, the 787’s special capabilities are a threat to larger aircraft as hub-busting takes hold. Airlines can effectively serve secondary city markets on a point to point basis, even if they are 7,000 miles apart using the 787-8. But where the 787 fails as a MoM aircraft is its price. Therein lies Boeing’s conundrum.
MoM requires current aircraft mis-use.  The A330neo matches many of the 787 traits – but it is a larger and heavier aircraft. Airbus will discount it accordingly – bringing it closer to a MoM. The A321LR also can serve this segment in terms of moving over 200 passengers 4,000 miles, but it is smaller compared with the 757-200 and is not an ideal replacement. As a result, in the MoM segment the 767 remains the yardstick.
If the MoM sweet spot is between 201-250 seats, Boeing should be well positioned to maintain segment dominance with the 787-8, but can’t because of pricing. Airbus has bracketed the MoM and offers both narrow-body and wide-body offerings that are close, but not quite what the airlines are looking for.
Boeing has challenges to dominate the segment. The 787 has too much performance – its wing, for example, is optimized for long ranges. The current 787-8 may have too much weight for the MoM as we have defined it. The MoM is an aircraft that has to operate broadly within climb, cruise and descent.  Boeing had a MoM model of the 787 on the drawing board, the 787-3. Unfortunately, it became a victim of the development debacles associated with the 787 program technical difficulties. With more capability than is needed, MoM pricing is a challenge for Boeing’s 787-8. The 787-8 for MoM applications cannot sell at what airlines want to pay and still enable Boeing to recover substantially higher than anticipated program development costs.
Airbus’ solutions are easy to offer because they require little technical changes on their aircraft, the A321LR, the A330neo and A330Regional. They bracket, but don’t hit the ideal sweet spot for a MoM aircraft.
The reality is that there is no MoM aircraft that exists today. The closet MoM might have been an updated 767 – but Boeing won’t go there.  So it all comes down to offering a new aircraft. But at 4% of the market, is there enough demand to cover the substantial anticipated development costs for an all-new design? The answer, unfortunately, is that the business case simply isn’t there. People will argue about the market size for MoM – some see it at around 3,000 aircraft. Current market is closer to 1,000.
The MoM is a very tough segment to work with. Its requirements demand an aircraft with tremendous flexibility and aggressive pricing. Whether a new generation equivalent to the DC-8-60 narrow body or a new technology version of an A310 or 767, a MoM airplane will need to be optimized for its mission. Today’s alternatives simply are not. Given the size of the potential market, the big two OEMs don’t look to be rushing ahead with a clean sheet solution, as the business case simply isn’t there today.
Hi Addison,
Can you clarify whether you weighted the market sales of capacity by the aircraft’s in-service layout?
The problem for any MoM aircraft is its inherent inflexibility. It doesn’t have the range to run with the smaller twins on the market today and it will struggle to balance any CASM advantage against risk over a single aisle on shorter runs.
Basically, Boeing could spend $10+ billion bringing to market an MoM, and Airbus spend $2B stretching the A321 and take half the sales. Needless to say, those sums won’t work in Seattle.
Might a slight rework of the existing Boeing 787-3 design, to give it a bit more range than the 3,000nm-3,500nm originally planned, at pretty much the same structural weight, work well? That surely wouldn’t be a major design exercise for Boeing and could be amortized over the increasingly successful 787 program. If holes are appearing in future widebody demand, as evidenced by Boeing’s very sluggish widebody order performance so far this year, as an AW&ST article suggested recently, the existing 787 lines could be bolstered by slotting 4,500nm-5,000nm 787-3 delivery positions into those lines.
Very naïve comment here. For fear of canibalizing the 787, Boeing will not manufacture a 767NG. But Airbus does not have the same problem. A 310neo would fit nicely between the 321LR and the 338. Designing a new wing, putting as much new, lightweight material as possible and fitting new engines and new avionics is not out the real of possibilities. Looking at a market of 700 to 800 aircrafts, it seems to me there is a valid business case to make for an eventual 310neo.
Why not a re-engined 767?
The challenge is cost, after all. In an era of low fuel prices, an in-production aircraft will always compete with one that does not yet exist.
This is by far the best article I have seen so far concerning the MoM. I agree point for point with everything said therein. I just want to add that if no MoM aircraft exists today it is due to the fact that it is overlapping the respective possibilities of the single-aisle and twin-aisle. That segment’s capacity in terms of seat count is a little big for single-aisle and a bit small for a twin-aisle. It is not physically possible to design a family of aircraft that would be centred on that segment. A family of aircraft can only finish with that segment, like the A321 does, or start with that segment, like the 767-200 did; i.e., the larger variant of a single-aisle or the smaller variant of a twin-aisle. That is why it is such a difficult segment.
The cheapest solution is for Airbus to re-wing the A321 family, adding over the wing joints an additional cabin section. That (with more fuel in the wings) gives that 15% increase in capacity while also increasing efficiency. The A321 is good enough already that little else – including engines – needs to be changed.
But of course there is zero reason why Airbus would want to – but the existence of this upgrade approach must seriously qualify Boeing’s ambition. It is already suffering badly from the low profit it can extract from the 787 – it must fear the same of a new MOM.
If you take a look at the graph on page 34 of http://www.iata.org/whatwedo/workgroups/Documents/ACC-2016-GVA/Another_Successful_ACMG_Year_Klemen_Ferjan.pdf , you’ll see that the operating cost (adjusted per seat) of the 767 and 787 are basically the same (with the 767 having the edge).
So if a re-engined 767 can be produced cheaply enough (and I have a hard time imagining a new airplane achieving this), there is a sweet solution right there.
I have said for some time a 767MAX would be the lowest cost option if only the engines are upgraded and perhaps some weight dropped and a few tweaks here and there. The 767 line is running and at 200+ seating and 5000 mile range it would own that size bracket. I still don’t see the A321 doing TATL without numerous fuel stops except for US east coast cities and western most cities in Europe, LIS,DUB,etc
Why not a new family of narrow body airliners? Take a look on A321 and make it a litle wider, for better circulation of passengers? Choose de best engine (PW GTF), high aspect ratio wings, 4-wheel bogie mlg but overall a fairly convencional aircraft.
– The smaller sibling would be a 200 passenger, 4,000 nm range with span of 40-41 meters.
– The big brother would be a 250 passenger TRIJET, 5.000 nm and wings of 45-47 meters.
I bet Embraer could launch competitive products spending not more than the US$ 5,4 billion Bombardier committed with Cseries.
Airbus doesn’t have to do anything. They can just wait and see what Boeing is going to do, and respond accordingly. They have at least two options within the A320 family. First they can come up with an A320.5, which would be a stretch of the A320 that would bring the latter closer to the 737-8 in capacity. Like you suggest they can also stretch the A321 and give it a newer and bigger wing that would satisfy many operators looking for a 757 replacement. Boeing doesn’t have it that easy. First they have to think of a replacement for the 737. When they should do the NSA is not for me to decide, but I would say the sooner the better, because when the 737 sales will start to decline it may already be too late. And this may happen sooner then Boeing would like. We have to keep in mind that nowadays it takes more than seven years to bring an aircraft to market. Boeing already have their hands full with the 787, 777X, KC-46 and the necessity to replace the 737. To launch a MoM at this time would only make things worse then they already are. And I can’t see a proper return for the massive investment required for this new airplane. Why Boeing would want to make a MoM is beyond my understanding.
REMEMBER THE 757 DID NOT HIT ITS FULL POTENTIAL TILL UPS ORDERED A 250 000 LB FRIGHTER THEN SUDENLY A DOMESTIC AIRCRAFT HAD INTERNATIONAL LEGS BEFORE THAT THE 757 FUTURE WAS IN DOUBT AJK
I think looking back and compare apples to oranges in terms of capacity, operating costs and payload-range can kill any business case.
I agree with Boeing’s there is a significant market in between the 737/A320 and the twice as heavy, big, capable, expensive twin aisles. There isn’t any natural gap in air traffic demand.
Another way of looking at it; Airbus and Boeing sold more then 2000 MoM like aircraft in the eighties and since then traffic has more than tripled.
Excellent point
keesje, you agree with Boeing that there is a significant market in that segment, because according to you there is no natural gap in air traffic demand. I agree with you, but that begs the following question: why would there be a “natural gap in air traffic demand” in the 100-150 seat segment, like Boeing, Airbus and Embraer claim? After all Douglas and MD have built the DC-9 and its MD derivatives in great numbers, that is approximately 2000 units.