Tuesday, December 6, 2011

Airbus A340 Flies off Into the Sunset, was it a Failure?

Airbus announced this week that its was closing the A340 production line after the aircraft family failed to garner any new orders in the last two years.  Hours after the announcement most journalists labeled the A340 a commercial failure, citing its inability to compete with the Boeing 777 and its higher operating costs as the chief reason the aircraft fell out of favor with airlines.  Randy Tinseth, vice president of marketing for Boeing's Commercial Airplane division, stated as much on his blog.  However the truth is probably somewhere in the middle.  While there can be no doubt that the Boeing 777 family's runaway success contributed to the downfall of the A340.  The 777 alone didn't kill the A340, instead a combination of changing market factors, evolving aviation regulations and internal competition from Airbus' own A330-300 left the A340 without a market.

When Airbus designed the A300, the world's first widebody twin jet back in the 1970's it envisioned an entire family of airplanes, 9 models in all designated A300B1 through B9.  The A300B4, A300-600 and A310 were part of this strategy.  With the success of the A300/A310 family Airbus established a toe hold in the cut throat commercial airplane industry as a legitimate competitor to the U.S. behemoths Boeing, Douglas and Lockheed who at the time dominated the industry.

Just as design work began in earnest on the next models of the A300 family, a division within Airbus developed as to whether to enter the narrowbody market and build a challenger to the Boeing 737 and Douglas DC-9 or continue forward with the original plan of constructing the next jet in the long range A300 family.  The German partners favored moving forward with the four engined widebody while the French and Spanish partners preferred to build the all new narrow body.  Eventually the narrow body strategy won out and design work on the A320 proceeded.

As major design work on the A320 wrapped up Airbus began to return its focus to extending the family of long range widebody jets.  Early design studies used the same wing as the A300 and incorporated the largest high bypass engines currently available.  The design team and more importantly perspective customers were split on whether the new aircraft should be a twin or a quad jet.  Most U.S. airlines favored a twin, while the majority of Asian and European airlines favored a quad.  In order to satisfy both airline customer groups and meet their drastically different requirements Airbus decided it would build both a twin and a quad jet.

In order to save money it was decided that the two aircraft would share the same wing and fuselage cross section as the A300 and would incorporate a common flight deck and systems to permit the aircraft to share a single type rating.  The TA9 aircraft was targeted at high-capacity, medium range transcontinental routes that were currently being flown by the domestic DC-10-10 and L-1011-200.  The TA9 was to have a range of about 3,300 nm and carry the same payload as the Douglas and Lockheed airplanes while consuming 25-38% less fuel. The longer range TA11 was to designed to fly up to 6,830 nm and was targeted at the DC-10-30, L-1011-500 and the yet to be built MD-11.  Airbus finalized the design of the aircraft in January of 1986 and re-designated the twin jet TA9 the A330 and the four engine TA11 the A340.

At the time of the A340s development regulations controlling twin-engined jet aircraft were very strict making trans-Atlantic flights inpractical and expensive in such aircraft.  The FAA in particular in the early 80's still maintained very strict regulations on twin jets due to legacy safety concerns about jet engine reliability.  The thinking was that four engines were ideal for long over water flights and 3 engines while suitable were less than ideal and twin engine jets were entirely not suitable for trans-oceanic flights.  Airlines which had an abundent supply of cheap fuel at the time and perhaps with distant memories of the unreliable piston engined days still favored four engines for long haul over water flights, as did most passengers.  So it was in this regulatory climate that the four engined A340 was designed and built by Airbus.

At that same time in Seattle, Boeing was in the midst of its dual certification campaign for the all new 757 and 767 aircraft familes.  The Boeing 767 was the company's first widebody twin jet and was designed to compete with the Airbus A300/A310.  The first 767-200 entered airline service with United in September of 1982 serving on high density domestic trunk routes.

During the next several years of operation the aircraft's performance helped validate the reliability of the 767's widebody twin engine design, enough so that in 1985 the FAA relaxed its 90 minute diversion rule satisfied that aircraft such as the 767 given its operational track record could safely fly trans-oceanic flights.  The FAA was the first aviation agency in the world to specify ETOPS requirements allowing for a twin engine jet to fly up to 120 minutes from a suitable diversion airport, which was sufficient for twin jets to operate almost all existing trans-Atlantic routes.  TWA was the first airline to be awarded ETOPS certification, when in 1985 it was granted approval to operate Boeing 767 services between St. Louis and Frankfurt.

A few years later in 1988 the FAA, now with three years of safe, trouble free trans-Atlantic 767 flight operations on the books made the decision to expand ETOPS to 180 minutes, this change brought 95% of the earth within reach of appropriately certified twin jets like the 767.  The stage was set for the Boeing 777.

PhotobucketMap generated by the Great Circle Mapper - copyright © Karl L. Swartz

In 1988 Boeing began studies on a new aircraft which would replace the aging first generation widebody jets like the DC-10, L-1011 and its own 747SP.  By that time Boeing also had a good idea of the specifications of the new Airbus A340 aircraft who's design and construction was far advanced at this point.  Boeing was essentially playing catch up and it knew it couldn't afford to get the design wrong.

Initial design proposals focused on a stretched version of the popular 767-300ER that incorporated larger wings.  This was later refined to include an expanded fuselage cross section while retaining the 767's existing flight deck, but the proposal dubbed the 767-X received a tepid response from potential customers.  Airlines wanted a larger fuselage cross section with intercontinental range and lower operating costs than the 767.  Boeing soon realized that an entirely new widebody twin jet aircraft family was the only solution that would deliver the operating costs and fuel burn that operators were looking for.  The highly successful track record of the 767 and the reality of 180 minute ETOPS certification helped solidify the case for the 777.

A team of eight airlines came together to define the specifications for the aircraft, United in particular had very stringent performance requirements.  They wanted to ensure it could fly three key routes, Chicago-Hawaii, Chicago to Europe and also handle hot and high operations from Denver to Hawaii.  The Hawaii flights presented the biggest challenge for Boeing as United was pushing for ETOPS certification for the aircraft right out of the gate.  To data the FAA had never granted a brand new aircraft type ETOPS certification at entry into service, let alone a 180 minute certification that would be needed to reach Hawaii.  The FAA usually required aircraft reliability to be validated over the course of a year of service, using a phased in approach which culminated in full 180 minutes ETOPS only after rigorous review and a successful track record with 120 minutes.  Boeing assured United that then new 777 would be approved for 180 minute ETOPS upon service entry which convinced them to sign on as the U.S. launch customer on October 14, 1990.

The First 777-200 was delivered to United on May 15, 1995 and 15 days later the FAA awarded the aircraft 180 minute ETOPS clearance, making it the first ever airplane to receive 180 minute ETOPS certification upon entry into service.  On June 7, 1995 United operated the world's first scheduled 777 service from London Heathrow to Washington Dulles.  The following year the FAA extended the Pratt & Whitney powered 777-200 ETOPS certification to 207 minutes.

The A340 had a two and a half year head start on the the 777, and took clear advantage of this lead.  The airplane hit a sweet spot that exploited a gap in Boeing's existing product line between the 767 and 747.  Airline response to the A340 was very positive and the aircraft amassed a considerable order backlog.  The first A340, a 200 model entered service with Lufthansa in February of 1993 followed by delivery of the first stretched 300 model a month later to Air France.  Airbus had built the aircraft around the concept that airlines would prefer the safety and reliability of a quad jet over a twin jet on trans-oceanic flights, and at least for a while especially with European airlines this strategy held water.

As the 777 gained popularity especially with the introduction of the extended range 777-200ER in 1997 and airlines compiled operational data on the aircraft it became clear that the 777 was outperforming the heavier and less fuel efficient A340 and as a result Airbus's stalwart new quad jet began to loose traction to Boeing's 777.

Both Boeing and Airbus were helped tremendously by McDonnell-Douglas, which experienced a major setback with its brand new MD-11 failed to initially meet its contracted performance guarantees for range and fuel burn.  McDonnell-Douglas worked with NASA for five years to correct this deficiency and eventually through the Performance Improvement Program (PIP) the company was able to recover the lost range and improve fuel burn, but by that point it was too late and many major customers had defected to Boeing's 777 and Airbus's A340.

Airbus, had the foresight in developing the A330/A340 family to realize the need for a new widebody twin jet.  After all the company had created the concept of a widebody twin when it built its revolutionary A300 airliner.  Airbus like Boeing was closely watching the evolution of ETOPS and correctly assessed that their was a lucrative future in large twin jets.  The company took a much more cautious approach to ETOPS than Boeing, prefering not to seek 180 ETOPS certification for the A330-300 out of the box but instead favored building slowly towards that goal through in service validation with airlines.  Aer Lingus and Cathay Pacific assisted in the ETOPS effort with the plan to deliver all three engine models with 90 minute ETOPS, once the in service A330 fleet accumulated 25,000 hours they would seek 120 minutes followed by 180 minutes at 50,000 hours.

The first A330-300 was delivered to Air Inter on January 17, 1994, followed in the second quarter with deliveries to Thai Airways and Malaysia Airlines.  While the A330 was an exceptional aircraft its initial sales were less than stellar due in part to increased market penetration of the Boeing 767-300ER and a desire from airline customers for more range and less seats.  In response to this demand Airbus developed the shortened A330-200 which was a direct competitor to the 767-300ER and delivered 9% lower operating costs.

Incorporating the same wing and fuselage length as its heavier for engine sibling and carrying essentially the same load but with lower operating costs due to half the number of engines Airbus customers began to turn increasingly to the A330, especially as ETOPS restrictions continued to be relaxed due to the operational performance of the 767 and 777.  Despite its slow initial start the A330-300 eventually supplanted the A340-300 in total orders.  The extension of ETOPS to 240 minutes put almost all trans-Pacific routes within  reach of the 777 and A330 further marginalizing the utility of the four engined A340.  The success of the competing 777 also put a major dent in A340 sales as more customers thrilled with the performance and customer acceptance of the aircraft lined up at Boeing's door to purchase the Triple Seven.

1998 proved to be the tipping point for Boeing, in that year the 777 effectively erased the A340s two year head start in the market cumulatively delivering more aircraft in 2.5 years than Airbus had in the previous five years of A340 production.  The pace at which the 777 overtook the A340 came as a shock even to Boeing.  But anyway you sliced it from that point on the A340 was at a decided disadvantage in head to head sales battles with new customers as the 777 was cheaper to operate and burned less fuel.  Airline customers flocked in droves to buy the 777, with the 200ER representing the bulk of the order backlog.  While the 777 continued its meteoric rise by the close of the decade the momentum behind the A340 had begun to fade and sales plateaued.

Almost forgotten in the shuffle was the A330-300, whose underwhelming initial sales led Airbus to develop the A330-200, a shorter, longer range aircraft.  The dash 200 proved to be an extremely popular aircraft with airlines, eclipsing the range and fuel efficiency of the top selling 767-300ER.  In a matter of years the A330-200 clearly established itself as the market leader over the 767-300ER and the 767 slowly began to loose out to the more efficient Airbus aircraft in new sales campaigns.

The success of the A330-200 also had the added benefit of boosting sales for the larger 300, as Airbus could now sell the two aircraft as a family given their cockpit commonality, engine and airframe similarities and their complementary capacity and range.  As a result sales of the 300 model began to pick up especially with existing A340 operators who were very satisfied with the quad jet but desired the fuel efficiency and lower operating costs that the A330-300 brought to the table.  Rising fuel costs also weighed heavily on the minds of airlines, making the economics of the widebody twins from both Airbus and Boeing that much more compelling.  While A340 sales flagged and 777-200ER orders peaked in 2007, the A330-300 continued to sell well.

The longevity of the A330-300 is a result of its exceptional design and performance, but sales have also been helped in recent years by Boeing's much delayed 787 Dreamliner program which left many airlines scrambling to fill holes in their fleet plans where the 787 was supposed to be.  For many 787 operators the 777 was too much airplane and the 767 doesn't offer comparable economics to the A330.

In response to lagging sales of the A340-200/300, Airbus decided to take the existing airframe and tweak it, adding new engines and a fuselage stretch to exploit a gap in capacity and range that was beyond that provided by the 777-200ER and 777-300.  The manufacturer believed that there was sufficient need for a 747 replacement, and at the time Boeing despite slowing sales of the 747-400 had no concrete plans to update the vulnerable design or replace it with an all new aircraft.  The super stretched A340-600 incorporated a 39.4 ft. fuselage stretch over the baseline A340-300, which enabled the aircraft to carry 25% more cargo by volume than the 747 while providing seating for 380 passengers in a three class layout and flying up to 7,900 nm.  The A340-600 power by four Rolls Royce Trent 556 turbofans each producing 56,000 lbs of thrust offered significantly lower operating costs than the 747 and by the time the first A340-600 was introduced into commercial service in 2002 early 747-400s were approaching 13 years of age.

Airbus also felt that there was a market for an ultra long haul aircraft that airlines could deploy on premium routes where business passengers would be willing to pay more to fly nonstop, to save time and avoid the hassles of connecting through another airport.  The aircraft incorporated a 14.1 ft fuselage stretch over the existing A340-300 and four 53,000 lbs Trent 553 jet engines.  The aircraft was designed to fly ultra long haul routes transporting 313 passengers in a 3 class configuration up to 9,000 nm.  Airbus targeted nonstop city pairs like Singapore-Los Angeles and Bangkok-New York with the A340-500.  The first A340-500 was delivered to Singapore Airlines in 2003.

Boeing at the time was still trying to decide what to do with the 747, after producing a few still born design concepts centered around a stretch to the fuselage dubbed the 747-500 and 600 respectively. However airline interest in the stretched 747 was luke warm at best.  Boeing was also working diligently on the next two models of the 777 family which would extend the baseline range and performance of the 777-200ER and 777-300.

From the start Boeing designed the 777-300ER as a 747-400 replacement which due to climbing fuel prices and its age was becoming more of a liability to operators with each passing year.  The 300ER used the 300's existing airframe, incorporating extended raked wingtips, a strengthened landing gear assembly, extra fuel tanks and the new 115,300 lbs thrust GE90-115B as the standard engine.  The 7,930 nm range of the aircraft boosted the 300ER's range by 34% over the baseline 300 model.  The 300ER offered near identical seating and more revenue payload capacity than the 747-400.  Launch customer Air France accepting delivery of its first 777-300ER airplane in April of 2004.

The ultra long range Boeing 777-200LR followed in 2006.  The 200LR nicknamed the "Worldliner" was designed with a maximum range of 9,395 miles.  Developed alongside the 300ER the 200LR incorporated an increased MTOW and up to three optional auxiliary fuel tanks in the rear cargo hold of the aircraft.  In order to carry the extra weight the main landing gear was strengthened, the same 12.8 ft raked wingtip extensions were added to reduce drag and boost performance in addition to structural strengthening of certain elements of the fuselage.  Boeing designed the 200LR for missions that were beyond the existing range of the 200ER with a full revenue payload.  The idea was that the 200LR would complement existing 200ER fleets and offer the ability for airlines to tap into longer range nonstop premium routes such as Sydney-Dallas/Fort Worth or Houston-Dubai.

As with the A340-300 before it initial sales of both the A340-500 and 600 were promising,  with the balance of the order backlog being for the larger 600 model, which was expected by Airbus as the ultra long range 500 model was always seen as a niche aircraft with a limited market.  But just like the A340-300 before it as soon as the longer range 777-200LR and higher capacity 777-300ER hit the marketplace the A340 began to loose momentum.  Boeing was helped tremendously by the fact that jet fuel prices began to skyrocket which further highlighted the 8-9% operating cost advantage of the twin jet 777 over the quad jet A340.  The 777-200LR, a niche airplane that never really took off with customers, still managed to outsell the A340-500 by a small margin.

The real winner for Boeing turned out to be the 777-300ER.  In a few quick years the 300ER's sales overtook the stagnating A340-600.  The Airbus aircraft is heavier, more expensive to operate, less fuel efficient and can't match the Boeing's payload range capabilities.  Many 747-400 operators like Cathay Pacific, ANA, JAL, Air France and British Airways have employed the 777-300ER as a direct replacement for the 747 just as Boeing and Airbus had envisioned.

The 777-300ER continues to be a best seller for Boeing, having recently eclipsed the 200ER to become the most ordered variant of the 777 family.  To date customers have ordered 545 300ERs compared to 97 A340-600's.

Meanwhile Airbus has turned its attention to the all new A350-XWB, which is set to challenge the 777-200ER/LR and 777-300ER.  With the decision to build the A350-XWB Airbus is closing the book on the quad jet widebody A340.  With the exception of the very large jets like the A380 and 747-8 all future widebody jets are likely to be twin jets.  The economics just don't support a case for a four engined jet in the 777 and A340 aircraft class.  Airbus is hoping that the XWB will lead to the same success as Boeing continues to enjoy with the 777 program.

For its part Boeing is hard at work ramping up production on the 787-8 Dreamliner, and laying the foundation for the stretched 9 model, which will challenge both the A350-900 and A330.  Engineers are also quietly working on a 777NG program to update the aircraft, increase its range and reduce fuel burn and improve its operating costs.

The commercial aircraft business is a turbulent, capital intensive industry where timing is everything.  Get it right and reap the rewards, get it wrong and potentially join a long line of distinguished yet ultimately unsuccessful commercial aircraft manufactures like Lockheed, McDonnell-Douglas and Convair.  The Boeing 777 hit the market at just the right time, taking advantage of changing regulations, new engine technology and good planning.  Airbus hedged its bets producing two widebody aircraft families the twin jet A330 and quad-jet A340.  While the A340 never enjoyed the level of success Airbus envisioned the A330 on the other hand has been a runaway success.  But since the A340 shares the same fuselage cross section, wings and major structural components with the A330 the incrimental costs of developing the two aircraft families was minimal as was the risk.

The 777 proved to be a formidable competitor whose staying power in the market place has made it difficult for Airbus to counter especially on the upper capacity end of the spectrum, hence the birth of the A350-XWB.  Add on top of that the cannibalization of the A340 market by Airbus's own best selling A330 and fuel prices that have spiraled out of control in recent years and the deck was stacked against the A340 almost from the start.  So while the low sales figures of the A340 are certainly disappointing to Airbus, they don't represent a failure of the program.  Ultimately the A340 was a successful aircraft for Airbus just not to the same degree as the A330.
Monday, August 29, 2011

The Boeing 757-200 - Can It Ever Be Replaced?

As the 757 reaches the twilight of its service life as a domestic workhorse for U.S. airlines many carriers are wondering what if any aircraft out there can replace its full range of capabilities.  The 757-200 was built to replace the legendary 727-200 and expand upon that aircraft's capability while reducing fuel burn and operating costs for the airlines.  By all measures the 757 exceeded Boeing's wildest expectations, delivering more range and better operating economic than even they expected.  The aircraft's high thrust to weight ratio resulted in exceptional shot field performance, making it an ideal platform for operations into small mountainous, high altitude airports.  But it is just as at home flying long thin transatlantic sectors which take full advantage of its incredible 3,900 nm range.  It is this incredible versatility and performance that has made the aircraft so successful, resulting in a total of 1050 airplanes being sold by Boeing since its introduction into service with Eastern Airlines back in 1983.

The 757-200 is mainly deployed on short and medium haul routes, carrying anywhere between 178 and 208 passengers in a two class arrangement depending on the seat pitch.  Delta Air Lines is currently the world's largest 757 operator with a fleet of 182 aircraft.  Delta's domestic 757-200 fleet is typically configured with 184 seats in a two class layout, which is close to the industry standard.  The 757-200 flies an average stage length of 1,178 nm.

Typical Two Class 757-200 Configuration

The 757 is the one airplane that all major U.S. legacy airlines have in common in their current fleet inventory, with American, Delta, United/Continental and US Airways all operating the aircraft.  In fact of the 938 aircraft currently active world wide as of August 2011, 488 or roughly 52% are being flown by U.S. domestic airlines according to airfleets.net.  With a further 112 being flown by package carriers UPS and FedEx.  Currently the largest foreign operator is the UK's Thomson Airways with 26 airplanes.

The 757-200 is about 33% larger than the 727-200 it replaced and it consumes about 43% less fuel per seat, but the aircraft was designed for a vastly different domestic market in the United States, one in which legacy airlines faced very little competition from LCC's and yields were consistently high.  Now with the U.S. domestic market suffering from over capacity and diluted yields the aircraft is becoming harder to fill at economic levels.  In addition as fuel costs continue to escalate and with the aircraft's age becoming a significant liability both in terms of direct operating and maintenance costs the time has come for the major U.S. legacy carriers to examine the replacement options.

 Chart Courtesy of AirInsight

For US Airways this means finding an airplane that has the performance and range to allow them to fly the 2,196 nm Phoenix-Honolulu route nonstop even in the sweltering summer time heat of Arizona, something the 757 does very well.  CFO Derek Kerr of US Airways put it this way, "The dilemma we have now is that the 757 is a great airplane that is not made anymore.  That leaves a hole in the industry, and we need to figure out what to do to replace it."  Airbus spokesman Clay McConnell states that the A321 NEO as currently designed will be able to cover 90% of the existing 757 missions but that last 10% represents a niche for which there is no plug-in replacement.  But it isn't just the Honolulu route that concerns US Airways they also want to ensure the aircraft can cover the current 757 transatlantic sectors like Charlotte-Dublin (3226 nm) and Philadelphia-Lisbon (3,453 nm).  The airline is currently working with Airbus to see if the manufacturer can squeeze additional power and range out of the A321 NEO to cover the remaining 10% of the 757's mission profile.

Icelandair finds themselves in a similar position of trying to find an airplane that can replace the capabilities of its 757 fleet.  But unlike US Airways who's 757's fill a unique niche for Icelandair the 757 is the backbone of its fleet.  The country of Iceland is situated about 4-5 hours flying time from the United States and just under 3 from Europe.  This geographic position puts the 757 in striking distance of just about every major city on both continents.  Icelandair's 13 strong fleet of 757-200's (176 seats) and one streched 300 series (224 seats) cover every route in the airline's inventory including the new 3,148 nm long haul route from Keflavik to Seattle.  But the airline's 757-200 fleet is becoming long in the tooth averaging 16 years in age.  The time for their replacement is fast approaching with CEO Birkir Gudnason stating the airline will have to begin replacing the fleet in the 2015-2020 time frame.  Gudnason in an interview with Airline Business in July of 2010 summed up the 757 issue by saying,

          "Icelandair is looking at an eventual replacement for its 757s.  As many 757 operators know,
          this is not a straight forward task.  The 757 is the perfect aircraft for our network and location.
          Icelandair is looking at aircraft with 150 or more seats and might even split the order between
          two types as there is no one aircraft that can do the job it wants a present."

So if the 757 must soon be replaced than what do airlines replace it with?  Does an airplane currently exist that has the seating capacity, performance and range to cover the entire existing mission portfolio of the 757.  The short answer is no, there isn't an airplane being produced by either Boeing or Airbus that can fully replace the 757.  Even the newly launched A321 NEO, with its significant improvement in fuel burn over the 757 doesn't have the legs to match the class leading 3,900 nm range of the 757-200.  So it would seem at least on paper that the Boeing 757 occupies a unique niche in the narrowbody market for which a 1:1 replacement does not exist. 

Understanding this reality and accepting that a 757 replacement will come with some compromise in range, payload and performance the question then becomes what aircraft comes closest to filling this gap.  The answer is not universal, but instead is predicated on a variety of factors that are in someways unique to each specific airline.  But objectively there are only two current viable options, the Boeing 737-900ER and the Airbus A321-200.  For airlines that can afford to wait until 2016 the A321 NEO enters the discussion.  But how do these three aircraft match up head to head as compared to the 757-200?

Comparative Aircraft Specifications

 AirInsight 757 Replacement Report

As stated earlier the average 757 stage length is just under 1,200 nm which is well within the range of all three potential replacements which will allow operators to cover the majority of the existing 757 mission profile.  Among the two current aircraft in production the 737-900ER with a maximum range of 3,265 nm holds a very slight edge over the A321-200 at 3,200 nm, but both fall well short of the 757's maximum full payload range of 3,900 nm.  Even the A321 NEO with its new fuel efficient engines and other range boosting improvements comes up 220 nm short of matching the 757-200.  While the 757's maximum range comes into play on only a handful of niche routes, primarily on long thin transatlantic flights between the U.S. and secondary European markets, these missions have become an important component of several U.S. airline's international route portfolios.  These routes allow airlines like Continental to maximize the strengths of the 757-200 in markets like New York/Newark to Oslo, Hamburg and Copenhagen where the current demand can't support widebody aircraft like the 767-300ER or A330-200.  These thin routes because of their strong yields and limited competition mean the 757's higher operating costs are not a significant issue and allow airlines like Continental to turn a profit with the aircraft.  Taking these important niche market into consideration all three of the potential 757 replacements don't have the legs to fly many of these routes to continental Europe.  Even under the best of conditions the 737-900ER and A321-200 would struggle to make the UK nonstop.

Still Air Range Comparison of the 757-200 to the 737-900ER, A321-200 and A321 NEO

Map generated by the Great Circle Mapper - copyright © Karl L. Swartz

The difference in seating capacity is negligible between all four aircraft, with the A321-200 and A321 NEO holding a five seat advantage over the 737-900ER and a one seat deficit to the 757-200 using a consistent seat pitch in a typical two class layout.

Comparative Economics

AirInsight 757 Replacement Report

When comparing the economics of the A321-200 and 737-900ER in terms of seat-mile and aircraft mile costs the 737-900ER holds a small but significant advantage.  The 737-900ER has a cost per available seat mile advantage of 1.9% and a 54 cent edge in cost per aircraft mile over the A321-200 when compared to the baseline 757-200.

However when both the A321-200 and 757-200 are compared to the A321 NEO, the NEO leaves both in the dust.  The difficulty in comparing the NEO to the two existing production airplane, is that the former's economics are based on modeling and not real world operational experience.  While there is little doubt that the re-engined A321 offering from Airbus will realize significant improvements in fuel efficiency and reduce airline operating costs when compared to its contemporaries the actual real world savings are hard to quantify as the aircraft's final configuration hasn't been frozen yet.  As with most aircraft even a derivative such as the A321 NEO, tweaks to engine thrust, weight and the overall configurations are likely before the design is frozen which will undoubtedly change the aircraft's economics, especially when you consider that Airbus is being pressured by operators to increase both the thrust and range of the aircraft to cover the full mission profile of the 757.

In some ways the 737-800 has already supplanted the 757 in the U.S. domestic market.  Continental, American and Delta all have large existing 737-800 fleets, and all of these carriers currently deploy the airplane extensively across their respective domestic networks.  But the 737-800 has not been used by these carriers to replace the 757.  Instead airlines, most specifically Continental have introduced the 737-800 and more recently 900ER into the domestic system on routes previously flown by the 757-200, which has allowed the airline to deploy its 757 fleet on higher yield international routes to South America and Europe.  This successful strategy has allowed airlines to extend the life of this aging airframe, effectively giving the 757 a second lease on life.

For Delta and American the time to act on a 757 replacement is now, with both announcing large narrow-body orders within the last 30 days primarily to replace their 757's.  Delta chose the 737-900ER due largely to the availability of early delivery positions and attractive pricing.  Delta's replacement timetable didn't allow for Boeing to offer the 737RE and likewise Airbus was forced to offer a mixture of A321-200's and A321 NEO's which was not an attractive solution to Delta.  It didn't hurt that the 737-900ER has slightly better economics and the carrier still has a gentlemen's agreement with Boeing that gives it the ability to jump the production line and secure delivery positions that are not available to the average airline customer.

American chose a different path, splitting the order between Airbus and Boeing.  The airline ordered a total of 260 Airbus aircraft, 130 of which are from the current A320 family and the other 130 being A321 NEO's.  The A321's are presumably to replace the 757-200 fleet.  American also ordered 200 aircraft from Boeing, split equally between the existing 737NG, most likely more 737-800's as well as some new 900ER's.  The remaining 100 aircraft will be for the newly announced 737RE.  The biggest concern for American was price and financing arrangements, as the carrier's current debt rating makes securing financing through traditional avenues difficult.

United/Continental has yet to decide how they will replace their 757's but a decision is probably not far away especially considering the combined 137 strong 757 fleet is an average of 17.6 years old.
But unlike American and Delta, Continental's entire 757-200 fleet is dedicated almost exclusively to international flying, primarily on transatlantic sectors from Newark.  Continental pushes their 757's to edge of the performance/range envelope so any potential replacement is going to have to match the 757's full payload range of 3,900 nm to be a serious contender.  United's 757's on the other hand are deployed extensively on its domestic network where the aircraft's top end range doesn't come into play.  This also explains why United has only equipped a handful of their p.s. 757's which operate on trans-continental sectors between JFK-SFO and LAX with the blended winglets.  With the exception of the trans-continental routes the 737-900ER or A321-200 could plug into United's domestic network and cover 99% of the routes without much difficulty.

Continental Airlines 757-200 Trans-Atlantic Routes

Of the two currently available solutions the 737-900ER is slightly more cost effective, but probably not enough to sway an existing Airbus A320 series operator and the same can be said of existing Boeing 737 customers.  At the end of the day while there is no 1:1 replacement, both the 737-900ER and A321-200 come close enough to replacing the 757-200 that it doesn't really make sense for either manufacturer to chase this limited niche market for the handful of operators like Continental and Icelandair that utilize the 757-200's full performance/range capabilities.  Airbus and Boeing will likely both try to squeeze additional range out of their re-engined aircraft families to get as close as possible to covering the full 757 market, but the simple reality is that the market that the 757 was built to cover doesn't exist anymore.  Instead it has fragmented into several sub-markets with the 737-800, 737-900ER, A320-200, and A321 taking over the bulk of the domestic 757 routes and the 787-8 providing the best solution for existing 757 customers like Icelandair and Continental/United that need the extra range but don't want a huge increase in capacity over the 757-200.

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The author is an independent aviaion consultant with 7 years of industry experience and holds a Masters Degree in Aviation Safety from Embry-Riddle Aeronautical University

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