AFA - Aerospace Forum Asia

Sign of the times  ...recommends industry activists to review this abridged/highlighted clip from The Economist...it discusses the external pressures facing Airbus and Boeing such as new developments by engine manufacturers and potential competitors to the A320 and the 737 which make use of these new engines....(Posted 19 Mar,2010)

New competition for Airbus and Boeing- The Economist 18 Mar, 2010
Start your engines
External pressures force the giants of aviation to spruce up their bestselling planes

ARE Boeing and Airbus the fierce competitors they claim to be, or have they become a cosy duopoly? The answer is probably a bit of both. Most of the time the rivalry between the two firms that dominate the commercial aviation industry is intense and has been of huge benefit to their customers. But over the past few years, airlines have become increasingly frustrated by the ever-receding time horizon

for the replacement of the two workhorses of the world’s fleets, the Boeing 737 and Airbus A320 families, now not expected until the middle of the next decade. With a backlog of around 4,500 orders for these 110-180 seat single-aisle jets, split more or less equally between the two aircraft and stretching to 2015 at current production rates, neither Boeing nor Airbus has had much interest in offering anything new. But developments beyond their control are now forcing them to rethink.

John Leahy, Airbus’s vice-president for customers, has promised to provide “an update” on the firm’s thinking in July, at the time of the Farnborough air show. It is widely believed within the industry that Airbus will use the occasion to launch a enhanced version of the A320 (and its derivatives) with a new generation of efficient engines that will reduce emissions and cut fuel consumption by up to 15%. But a decision could come sooner. If it does, staff at Boeing admit they will have little choice but to follow suit. The spruced-up planes would enter service in about five years’ time, extending the models’ lives until around 2025. By then, Airbus and Boeing believe that radical new designs and technologies will have matured sufficiently to improve efficiency by 40% from today’s levels. That should provide a platform for new aircraft that will last 40 years or so—an age already exceeded by the 737.

Although the cost of “re-engining” is far less than developing an all-new plane (albeit rather more for Boeing than Airbus because the low wing of the 737 is unsuitable for the big new engines), it is an expense and effort that both planemakers would prefer to avoid just now. Boeing has had a torrid time bringing its chronically delayed 787 Dreamliner to market (the first deliveries are now expected by the end of this year). It wants to conserve cash and engineers to respond to the threat to the 777 from the larger versions of the new Airbus A350. Upgrading the 777 with a new wing is one possibility, but a similar exercise with the 747-8 proved fraught, convincing some within the company that it may as well go the extra mile and develop an all-new plane. As for Airbus, keeping the A350 on schedule—it is due to make its first flight in 2012—is its priority. The firm is also still suffering from continuing production difficulties with the A380 superjumbo and losses on the A400m military transport.

But two factors have made it hard for Airbus and Boeing to continue sitting on their hands. First and most important are the strides made by engine manufacturers of late, led by Pratt & Whitney. These have made it increasingly difficult for the pair to argue that airlines should be satisfied with the incremental improvements in efficiency of 1-2% a year that they eke out of their existing designs. Last year P&W’s engines powered just 1% of mainstream commercial airliners compared with around 9% a decade ago. In an attempt to force its way back into the market, it is betting everything on its revolutionary “geared turbofan” (GTF) engine (pictured above), which it claims is 10-15% more efficient than conventional jet engines. Airbus conducted a successful trial of the GTF 18 months ago. Meanwhile, CFM International, a joint venture between GE and SNECMA which provides engines for more than 60% of Boeing’s and Airbus’s planes, is promoting a rival design called Leap-X. Rolls-Royce, too, is developing a new offering.

The second factor is that potential competitors to the A320 and the 737 which make use of these new engines are emerging. The GTF will power Mitsubishi’s new regional jet, as well as Bombardier’s new CSeries, a 110-130 seat (and potentially 150 seat) medium-range aircraft that has 90 firm orders, the latest coming from Republic Airways last month. The CSeries has had a long and difficult birth, but should enter service in 2014. It has been designed to win a chunk of the smaller end of the narrow-body market by offering 20% greater efficiency than the A320 or 737.

Two new single-aisle jets from China and Russia, both expected to enter service in 2016, are aimed even more directly at the two aviation giants. The Commercial Aircraft Corporation of China’s 170-190 seat C919 has opted for CFM’s Leap-X, which will be assembled locally; United Aircraft Corporation, the agglomeration of all Russia’s state-owned planemakers, is backing the GTF for its 150-212 seat Irkut MS-21. There are big uncertainties about both projects—in particular about the two companies’ ability to deliver the service and backup customers expect. But both claim their planes will consume at least 15% less fuel than the current A320 and 737. They will also be much cheaper. If the Chinese government pressures the country’s big airlines, which are state-owned, to buy the C919, it will be especially bad news for Airbus, which is pinning more of its hopes for future growth on Asia than Boeing is, and has established a production line for the A320 in Tianjin.

Which engines will Airbus and Boeing pick to ensure they stay ahead of the new competition? Boeing’s instinct will be to stay in lock-step with CFM, which is currently the only engine supplier for the 737. However, Richard Aboulafia of the Teal Group, an aviation consultancy, thinks there is more technological risk with the Leap-X than with the GTF and greater uncertainty about whether it will deliver the same cost savings. Airbus has said that it wants to stick with its established engine partners, CFM and International Aero Engines, a consortium that includes P&W and Rolls-Royce. Given that the latter pair are on divergent technological paths, compromising on a design could prove tricky. Getting it right is crucial for Boeing and Airbus: last year the 737 and the A320 represented respectively 77% and 81% of their deliveries—nearly 1,000 aircraft. The competition is watching, but not waiting.