It’s a story that won’t die, and the buzz around ISTAT 2012 was that Boeing continues to consider offering the Pratt & Whitney GTF on the 737 MAX.Wall Street analysts were talking about it and FlightGlobal sat down with Steven Udvar-Hazy, considered the Godfather of leasing, at the ISTAT AGM in Arizona last month to talk about the MAX. Hazy urges Boeing to put the GTF on the 737, but doesn’t think it will happen.
We’re not so sure.
We continue to hear that Boeing is seriously evaluating adding the GTF as an offering on the MAX, a move that would likely result in a battle royale between Boeing and GE/CFM, which has been the sole source engine provided since introduction of the 737 Classic in November 1984. The current model, the Next Gen, entered service in 1998.
It’s well known that GE/CFM has an exclusive supplier contract to power the 737, but it’s not as ironclad as one might think. In March 2011, Boeing’s Mike Bair, vice president of Advanced 737 Product Development for Boeing Commercial Airplanes, told AirInsight’s colleague Scott Hamilton that Boeing has the flexibility in the contract to put a competing engine on the 737 if the engine and commercial terms are superior to any engine offered by CFM. The CFM engine has to be “competitive,” and Boeing gets to define the term, Bair said then.
What does this mean? Neither Bair nor a spokeswoman will say, but those familiar with the situation believe that the GTF would have to provide an installed advantage over the CFM LEAP engine proposed for the MAX of somewhere between 3% and 5% in fuel burn.
It’s entirely possible that CFM could make up for any shortfall through economic support. Airbus’s John Leahy told a Credit Suisse conference on November 30 last year that the GTF on the A320neo provided about 1.5% better fuel economy than the LEAP.
It’s well known that CFM is much more aggressive than P&W in providing guarantees and economic concessions in GTF-LEAP competitions. It’s also well known within the industry that the International Aero Engines V2500 (of which P&W is now the dominate partner) is 1%-2% more fuel efficient than the CFM56 on the A320 family, particularly on the A321, and that CFM often makes up for this in commercial terms.
But would CFM be able to overcome a 3%-5% disadvantage to a MAX equipped with the GTF? To maintain a 45%-50% market share vis-à-vis the A320neo, this would be a very expensive proposition.
Boeing’s Bair, at the ISTAT conference, said the CFM LEAP (picture) will have a 68.4 inch diameter fan, which is within an optimal range of 3-4 inches of a “bucket”-like curve for optimization of the engine. CFM is designing a smaller core for the engine, essentially downsizing the one developed for the COMAC C919 and for the A320neo family. But the LEAP’s Low Pressure Turbine’s length and diameter remains a challenge for the low-slung 737 and weight is also said to be an issue.
Boeing has promised increased fuel efficiency of 10%-12% for the MAX vs the NextGen, but many sources inside Boeing say they are not there just yet. A combination of airframe and LEAP designs remain slightly short of this target today, though all believe Boeing and CFM will achieve this goal by the projected EIS in 2017—five long years away.
In the meantime, Boeing has converted fewer than 500 commitments to firm orders, with about 600 commitments remaining that have been announced by Boeing but not identified. Only Southwest Airlines, Lion Air and Norwegian Air Shuttle have announced conversion of their commitments to orders.
Aviation Capital Group announced it has committed to the airplane but so far has not converted to orders. American Airlines announced its plans to order the MAX, but the bankruptcy stalled any conversion (as is also true with American’s announcement to order the A320neo family).
Boeing and CFM will only say they have a contract with each other to provide power for the MAX. But we don’t think this story is over just yet.