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The two big OEMs tell us they have a ”natural” replacement for the 757 — the A321neo and 737-9MAX. Unfortunately, neither option appears optimal, as both fall short on range, payload, and runway performance.  Is there a market for a true 757 replacement, and should this be the next airplane developed by Boeing or Airbus?  Let’s take a look at the 757 market, operators and outlook.

The current status of 757 fleet is that 1,049 were delivered, and 986 are still flying. The following table lists the active fleet by the largest 757 operators. A total of 63 aircraft, or 6.4% of the fleet is parked and more than half of those aircraft are currently parked by the largest operators.

The typical ranges flown by these aircraft are displayed below.  The 757-200 has a range of 3,900 miles without winglets and 4,100 miles with winglets. The 757-300 numbers are 3,395 and 3,595 respectively.  While most operators utilize the 757 domestically, quite a few operators utilize the 757 on transatlantic services.  The benefit of the extended range for this aircraft is the capability to utilize the aircraft on long-thin routes.  Transatlantic operations with the A321 and 737-900, and A321neo and 737-9MAX will remain difficult, but are easy for the 757.

As a result, airlines would keep the 757 in service if costs were not rising for the aging fleet. The 757-200 passenger fleet is on average 19 years old, the 757F fleet averages at about 21 years and the 757-300 passenger fleet averages at 11.5 years old.  There are only 55 757-300s in service.

Operating costs for the 757 continue to rise as the aircraft ages.  The following chart shows hourly operating costs from US DOT Form 41 for operations by US airlines.

The 757 operating costs are rising and we expect, all things being equal, that in five years’ time the typical 757 will start to reach operating costs at the level of current 777-200s, clearly becoming uneconomical.

We can say with some confidence that the 757 is aging and that decisions on replacement need to be made, especially given the lead times on new aircraft such as the A321neo and 737-900MAX.  Buying an A321ceo or a 737-900ER would not be an optimal replacement decision given the availability of more efficient aircraft. Unfortunately, the 757-200 does not have a natural replacement among the current options.  Moreover, there are nearly 1,000 757s needing replacement.  That is not an insignificant market.

With both major airframers focusing on derivatives, can Airbus add more fuel capacity and range to the A321?  Should Boeing rethink its 787-3 option as a potential replacement for the 757, as it had planned similar capacity?   Or is this an opportunity for somebody else?  We think this could be an opportunity for the Yak 242-400 (formerly known as the MC-21).  The prototype is supposed to be unveiled in 2015.  Although the Russian aerospace industry is not transparent enough to know the true status of the program, it will use the Pratt & Whitney GTF engine that should deliver excellent economics, and Sukhoi is responsible for a superb looking and highly aerodynamic wing.  If UAC, the new Russian national aerospace company, could get through red tape faster, we might be more confident that an airplane could be indeed be unveiled in 2015.

The market is clearly looking for a 757 replacement and neither the A321neo nor 737-9MAX achieve the combination of capacity and range that the 757 offers.  UAC could do well in this segment, if it can deliver with the Yak-242.  But this will require a substantial cultural change, including program transparency and better marketing and support for airline customers. Could a new player develop the solution the airlines are looking for?  Stay tuned, as on paper, the Yak242-400 is closer to a 757 replacement than either the A321neo or 737-9MAX. Of course that requires many hurdles to be crossed, not the least being FAA certification. The delay in the SSJ being put through FAA certification is noteworthy.

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