"Airlines To Boeing: 'Get Moving' On Middle Of The Market Aircraft"

Airlines around the world are eager to buy a new commercial middle-of-the-market (MOM) aircraft that Boeing is considering building, and views in the industry are crystallizing on what it should look like.

Nearly 90% of 507 airlines and air cargo operators responding to an Aviation Week–Bank of America Merrill Lynch survey confirm they would be interested in buying a new MOM jet, and most of those airlines say they would want it before 2023. Boeing’s studies have assumed a service entry of 2024–25.

“There really is demand for this airplane,” says Ronald J. Epstein, Merrill’s senor U.S. aerospace analyst. The message to Boeing, he says, is: “Get moving.”

The survey responses provide clues to what the U.S. airframer is hearing as it talks with customers about an optimal design for the MOM jet. On the question of narrowbody versus widebody aircraft, 60% of respondents said they would consider a twin-aisle widebody jet—which would allow faster boarding and unloading of passengers—as long as it was compatible with existing airport infrastructure. Almost half of respondents would prefer an aircraft sized at 150–199 seats, with another 27% favoring 200–249 seats.

Respondents were more divided on the range they would like to see in a new MOM aircraft, with 23% favoring 4,000–5,000 nm, 25% favoring 3,000–4,000 nm, and 24% favoring 2,000–3,000 nm range. That varied interest “suggests to us that perhaps a multi-product family could be a possible solution,” Epstein and his team wrote in a July 8 research note to clients.

Not surprisingly, 69% of respondents would prefer a composite carbon-fiber fuselage over aluminum, and 74% want composite wings and empennage. But there is also a limit to how much they are willing to spend: Sixty-two percent of airlines say they would not pay more than $72 million for the jet. Epstein estimates that translates into a list price of $140–150 million. “For this kind of airplane, that seems about right,” he says.

Epstein says the need to keep costs under control—particularly if Boeing opts for a widebody jet, which would have higher per-seat costs—might require a mix of old and new technologies, such as an aluminum fuselage paired with carbon fiber wings. “They’re going to have to make trade-offs,” he says. “If you can’t do it affordably, what’s the point?”

Teal Group analyst Richard Aboulafia, who was not involved in the survey but reviewed its results, says the level of interest in a MOM aircraft is impressive, but questions whether it has an expiration date.

“A lot of the enthusiasm comes from people who really want a [Boeing] 757/767 replacement,” he says. “But we’ve looked at the issue closely, and Boeing really can’t get this kind of thing to market much before 2025. It’s still worth doing, but some of this enthusiasm might diminish by then.”

Among other survey results:

•Eighty-three percent of respondents say they would remain interested in a MOM aircraft, even if oil prices stayed below $70 per barrel.
•About three-quarters express a need for cargo capacity similar to the Boeing 757.
•More than 80% say having a dual-sourced engine with a “power-by-the-hour” program was very important or somewhat important.
•Fifteen percent would use a MOM jet for domestic flights, 30% would for international flights, and 55% would use it for a mix of both.

Questions for the survey were developed jointly by Bank of America Merrill Lynch and Aviation Week. Penton Research, the research arm of Penton, Aviation Week’s parent company, conducted the online survey of members of the Aviation Week database June 9–30. Raw data were then independently scrutinized by Bank of America Merrill Lynch analysts.

Boeing officials have indicated they would decide by the first part of 2017 whether to move forward with development of a MOM airliner. Epstein cautions that if the company dithers, rival Airbus—which will see its R&D expenses tail off as the A350 program matures—could pounce.

“As the A350 [program] starts wrapping up, Airbus doesn’t have anything else in the pipeline,” he says. “If there’s a real market out there, why not? They make airplanes, too.”

Courtesy: aviationweek.com