Boeing and GE drip fed a draft outline of what it plans to do with the NMA – new mid-market aircraft dubbed the 797-X, the nomenclature of which still hasn’t been made official.
In the past, Boeing introduced a new aircraft starting with the smaller of the two, progressing to the larger variant later. The new 225 seat base version, stated as the NMA-6X and the 275-seat NMA-7X configuration, will instead be launched in reverse, with the possible 797-7 launched first.
The reason for this is that Airbus have in effect stolen the advanced market with the A321neoLR/XLR, and there won’t likely be enough orders for a new market product to launch it on the scale the company would want.
So, by aiming at the larger 797-7 in a seating configuration Airbus doesn’t have in the A321 and never will, it’s slicing right in the gap between the A321 and the A338.
Airbus is confident that between the two it can carry off as much of the market as Boeing, but that strategy is filled with risks.
For one the A338 has been a really hard sell, with orders totalling just 10 aircraft, the first being delivered to Kuwait in 2020. It seats 257 passengers and has more than enough range to compete. The problem is it seems like older tech and will already be eight design years old by the time 797-7 reaches customers in 2025-26. It’s also unlikely to have the residuals that leasing companies will want to make it attractive longer term, even it is sold on price at the start. Leasing is way more important now than it was and it’s still gaining in market share. Some forecasts put leasing as high as 70% of all aircraft sold by 2030.
Many airlines will order aircraft and then find a leasing company to pick up the tab before delivery, or buy them outright and then sell them to a leasing company and rent them back. Across the board, the 797 will appeal far more to these crucial leasing companies because it has a future of probably 20 sales years and thirty operational ones.
The A321neoXL/XLR is quite a different pattern. It’s only just entering the market in XLR form in 2023, with a projected sales run of around 7 years, that should by then see a replacement for the A320 family across the board.
By the time A321neo family aircraft are starting to reach peak deliveries and sales are dropping off, it will face the 797-6, its direct competition and it will look distinctly like a better prospect for airlines and the leasing companies.
Boeing’s plan keeps it in tune with the model cycles, delivering viable competition to the A338, which will never see the sales Airbus hope for it, without challenging the A321neoXL/XLR directly. By the time they do with the 797-6, the A321 family will be old news and looking like yesterday’s option.
GE let the cat out of the bag, almost certainly on purpose, consolidating the view the 797-7 will come first. GE Aviation are bidding to provide a new 50,000lb+thrust turbofan through the CFM International joint venture with Safran. GE wants to be sole supplier but is up against Pratt & Whitney. They’re offering a variant of the PW1000G geared turbofan. Rolls-Royce decided to withdraw its UltraFan geared turbine engine earlier this year. There isn’t the market or profit to be made in even offering two engines, so the winner sweeps the board, just as Rolls-Royce did with the A330neo and the A350, and GE with the 777-8/9.
Boeing’s plan for the 797 is to offer 25% more seats and greater range than the 757. It simply wants to get all likely customers on board and work to produce an aircraft that all the likely buyers will want straightaway. As a result the Boeing board is likely to sign off development in the last quarter of 2019 with a product launch in early 2020 – and buyers lined up.