The argument for re-engining narrowbodies
The engines are ready - or nearly so - and the competition is well on their way to service entry in a few short years. The customers are clamoring for increased efficiency. So, the question is what will Airbus and Boeing do about the narrowbody at a time when airlines do not want to wait until well after 2020 to re-equip their fleet with more efficient aircraft.
While this would suggest that the way is clear for such programs as the Bombardier CSeries to break into the mainline market, AirInsight suggests that re-engining current narrowbodies could achieve the efficiencies sought until a new narrowbody finally gets to the market at the end of the 2020 decade. In addition, authors Ernest Arvai, Scott Hamilton & Addison Schonland, said that these re-engining programs for the Boeing 737 and the Airbus A320, could threaten the viability of all the programs now underway and scheduled to enter service between 2013 and 2016.
"New programs from Canada's Bombardier, Brazil's Embraer, China's COMAC and Russia's UAC threaten to leap-frog existing narrowbodies and, for the first time in two decades, represent a viable threat to Boeing or Airbus," the team reported. "The Bombardier CSeries C-300 is exactly the size aircraft Southwest utilizes for its all Boeing 737 fleet, and promises 15% better economics using the PW1000G. The COMAC C-919 has selected the GE LEAP-X engine technology for its program, which promises to take a strong share of the Chinese market and provide better economics than either the A320 or 737NG. Similarly, the MS-21 from United Aircraft in Russia is utilizing the skills of the merged Russian design bureaus to also offer a modern technology trunkliner with next generation engines.
"With new engine technology and more modern systems, the CSeries, MS-21 and C-919 would be 12-17% more fuel efficient than the existing A320 or 737NG models," they said in their report - Single Aisle Airliner Re-Engine Program - The alternative to new aircraft programs. "With new models pushed back, Airbus and Boeing would, for the first time, not have the most efficient models in the marketplace. These new programs could seriously erode the market share for the 737 and the A320."
Not so fast. AirInsights predicts that Airbus will jump in early 2010 with an engine announcement for a re-engined A320 for EIS in 2014/15 with a 14% improvement. This, it said, will force Boeing's hand for doing the same to the 737, a task made more difficult because of the engine ground clearance. However, the team indicated Boeing has already solved that problem. This, said AirInsights, leaves Boeing to focus on a 777 replacement to compete with the A350XWB.
AirInsight said that it is virtually certain Boeing and Airbus will launch re-engining (RE) program for their current narrowbodies, simply because with the problems and growing costs of their widebody programs - the A380, A400M, 787 and 747-8 programs - they can't afford to do anything else.
The team pointed out Airbus has already tested the PW1000G on the A340 and Boeing is talking to Pratt and has already designed a solution to the larger fan diameter compared to the LEAP-X. "It extends the engine pylon out and up to accommodate either the PW or CFM solutions," they said, noting Pratt's advances. "It has run the engine to 40,000 pounds of thrust - double what the first commercial versions on the CSeries and MRJ are going to need. Moreover, wear on the expected Achilles heel, its complex gearbox has apparently been solved through clever lubrication piping. This design is so clever that tests on the A340 testbed at radical angles of attack barely required the lube pumps to activate."
Customers already know that engine advances could get them double digit gains in efficiency by 2015 and are thus anxious to get it since the hosing they took on fuel hedging. "For Airbus, the threat is that, absent a re-engine program, Qatar says it will order Bombardier's CSeries, which while at the smaller end of the A320 family (110-149 seats) nonetheless is a direct threat to the A319 (and 737-700) market segment," said the team. "At Boeing, its largest 737 customer, Southwest Airlines, has been demanding a solution with 15% lower SFC. Southwest says it cannot wait 10-15 years for an entirely new airplane with the goal of 25% or more gains in SFC…The CSeries provides them such an option…Boeing saw United reject 'old technology' with its recent widebody order. Airbus is being strongly encouraged by Qatar Airways to re-engine its A320 family. Air France is also pressuring Airbus to dramatically improve the operating expense of its single-aisle models. All things being equal, a re-engining program is compelling for airlines, assuming the same price for a new aircraft with the new technology engines."
It is equally compelling for the manufacturers, said the team, since a re-engining program would be only a quarter of the costs of a new program. "Economic models that assume a 14% improvement in fuel burn under scenarios of $2, $3, and $4 per gallon fuel prices result in a NPV at 10% of $8 million, $11 million and $14 million, respectively," they said. "And if P&W can achieve the 22% fuel savings they believe possible with the GTF, the NPV increases to $11 million, $15 million and $20 million respectively. Given that most of the costs of the narrow-body programs have already been amortized, the risks of a re-engined model are minimal, the economics are compelling for airlines, and the new models can fend off emerging competitors until investment and technology are available for a yet another leap-frog solution a decade later.
The fleet commonality savings could even outweigh any advantages new programs may bring."
The team also predicted that the A320 will have an advantage owing to the "additional ground clearance and improved efficiency since engines for the Airbus will not require cropped fans." But the two programs will give the two major manufacturers the ability to compete against the new program on economics coupled with fleet commonality.