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Airline News 10 | Aircraft Manufacturers 11 | Cabin Interiors, Connectivity & IFE 11
Boeing still working NMA business case as airlines indicate
Making a business case for Boeing’s potential new mid-market aircraft (NMA) remains the manufacturer’s biggest challenge, Boeing’s
chief salesman said, even as more airlines are pushing for the aircraft sooner rather than later.
The CEOs of Delta Air Lines and Panama-based Copa Airlines
were among those to express strong interest the NMA in March,
with Delta’s Ed Bastian telling a JP Morgan investor conference that
the Atlanta-based carrier was eager to play a major role in shaping
the aircraft’s design.
“We have 80 [Boeing] 767s that will be coming up on retirement in
the next decade, somewhere in the second half of the next decade, as
well as another 100 757s that will need to be retired over that same
timeframe. So, we are in discussions with Boeing,” Bastian said.
Copa CEO Pedro Heilbron said at the US Chamber of Commerce
Aviation Summit in Washington DC that he was “very, very interested” in learning more. “We could easily be a customer for the
NMA,” he said.
After several iterations, Boeing has provisionally defined two
main NMA versions: a 225-seat model with a 5,000 nm range and a
larger 275-seat model with a range of around 4,500 nm.
“We haven’t seen enough on the aircraft yet as far as specific
operating specs and most importantly costs,” Heilbron said. “But the
aircraft we’re reading about seems to have the perfect range and
capacity that we’re serving. It’s a light widebody. The current wide-
bodies don’t work for us.”
Earlier this year, Qantas CEO Alan Joyce also expressed interest
in the NMA, and some in the industry believe the aircraft program
could be launched this year, possibly during the Farnborough Air
Show in July.
But Boeing, which will deliver the first 737 MAX 9 and first 787-
10 this year, is ramping up 737 production to record highs and has
the 777X in development, is still being cautious. Briefing reporters
in Washington DC in mid-March, Boeing Commercial Airplanes
VP marketing Randy Tinseth said the company thinks the 2024-
2025 timeframe works with airlines for NMA to enter service.
“Customers always want things sooner rather than later. It
works for our resources and for our critical suppliers,” Tinseth
said. “This aircraft will use many of the technologies we have
today; there will be nothing new in terms of technology. I think
this is all doable, and I think we have a little time.
“My job is to understand what the customers want and the size
of the market. I think we have our hands around that. The biggest
challenge is whether we have a business case, and that’s where
the real work is coming together.”
Some leasing companies have cautioned that while there is a
demand for the mission an NMA would be designed to fulfill, the
most important factor will be price. AerCap CEO Aengus Kelly
and Air Lease Corp. CEO John Plueger have both indicated that
Boeing will need to find a way to price the aircraft at a level not far
from aircraft like the Airbus A321 or used Airbus A330 or Boeing
767. That is at the crux of the business case “challenge” referred
to by Tinseth.
Walsh: IAG board favors bigger Level LCC
International Airlines Group’s board is keen
to pursue the more ambitious of two possible plans for long-haul LCC Level, IAG CEO
Willie Walsh said.
Walsh told ATW in March that the team
had put forward two strategic plans to the
IAG board. The first saw Level operating 15
aircraft by 2022, while the second had a
Walsh said the board liked the 30-aircraft
option, even though the management team
was only seeking clearance for 15 aircraft.
“Norwegian has proved that the customer
model works,” Walsh said.
IAG is yet to commit to Level’s future fleet
mix. The Airbus A330 is “working well” for
Level, but Walsh said it is unlikely the 30
aircraft will all be A330s. The group has four
more A330-200s on order, plus three options.
IAG has flexibility, because it could reallocate some of its existing aircraft orders to
Walsh mentioned Airbus A350s and
Boeing 787s as possible alternatives to the
A330ceo, although in the past he has also
talked about Level using A321LRs to open
thinner long-haul routes.
By then, 787s would have “more reasonable” ownership costs, he said, because early
examples of the type will have started to
move between operators.
IAG has three more 787-8s on firm order,
plus 12 options. It has also ordered two more
and 12 787-
fuel costs is
the only way
Level operates as a virtual airline from
sourced on wet lease from IAG’s Spanish airline Iberia. Level does not have its own management team or air operator’s certificate
(AOC), which keeps down costs.
Walsh had previously indicated that a CEO
would be selected for Level by around the
end of 2017. At an A4E summit, Walsh said
the group was in the final stages of interviewing people.
He added that Level’s future AOC has not
been decided yet. Previously, British Airways
CEO Alex Cruz said Level would assume the
AOC of French premium carrier OpenSkies,
when Level starts operating from Paris Orly
in July 2018.
Level started flying in June 2017 with
two A330-200s seating 293 passengers
in economy and 21 in premium economy.
Since launching, Level has added flights
from Barcelona to Buenos Aires, Los
Angeles, Oakland and Punta Cana.
A third A330 will be based in Barcelona
in the summer and an additional two
will be used to open a Paris-Orly base
in July. From Orly, it will open routes to
Guadeloupe and Montreal in July, with
Newark and Martinique to follow in
Level is IAG’s fifth mainline airline brand
alongside Ireland flag carrier Aer Lingus,
the UK's British Airways, and Spain's Iberia