Calhoun’s new jet delays threaten Boeing’s future in airliner business

CEO Dave Calhoun announced at last week’s investor day that Boeing would not launch new jetliners until the mid-2030s, marking a game changer for the civil aviation industry​​​ time for the rules.This could be the beginning of the end for Boeing
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The announcement was a sharp departure from comments he made at an investor conference in June last year that the launch of the new jetliner was “years away”. The new time frame means that Boeing’s new jetliners will be launched more than 25 years apart, assuming the new jets are launched in 2030.

As a result, very little “tribal knowledge” will be transferred between the design teams involved in the last clean sheet procedure and the next. According to Calhoun, “Then there will be a time when we’ll take the rabbit out of the hat and roll out a new plane sometime in the next decade.” Who’s going to make this rabbit at Boeing Reality? Overall, talent retention will be a major challenge, as young engineers have just been told that there will be nothing new this decade.

The new time frame also calls into question his reasoning that it’s not worth it until the new jet can incorporate significant efficiency-enhancing technology. Disruptive technologies may emerge in the future. But the most promising are actually “platform neutral”; greater autonomy and sustainable aviation fuel (SAF) would be useful for any new jet. Propfans may or may not prove disruptive, but they were flight-tested on jetliners in the 1980s, and while they may finally be ready for use in the 2030s, the slow road means their arrival Doesn’t make everything else obsolete.

Everything else, like hybrid/electric or hydrogen propulsion, won’t be available for jumbo jets in the 2030s or even the 2040s. In short, Calhoun’s reason for not having a new jet looks like an excuse for not spending money on new products. This decision may be related to plans to simply break up the company, a possibility I outline here.

Either way, the justification for the delay is based on a misunderstanding of aviation history. In June, Calhoun said: “If you look back at the history of the new aircraft, they don’t really start until the propulsion scheme is about 10%, 15%, 20% better than the last one.”

Well, no, not really. Maybe some correct history will be used here. What usually happens is that Boeing does a great job of defining and designing new products to meet market needs, and the resulting new jets either go on sale at the same time as, or even before, the number of competitors’ jets. years later. Typically, Boeing does so well that it beats the competition.

The process began with the 707 defeating Douglas’ DC-8. Next, 727 defeated Hawksidley’s Trident. The 737 beat the DC-9, BAC 1-11, Sud Aviation Caravelle, and more. The 757/767 beat the A300/A310. The 777 beat the A330/340 and the MD-11. The 777-300ER/200LR beat the A340-500/600. This has nothing to do with the new engine; the new engine benefits everyone. It’s about beating the competition.

The only new Boeing jet that vaguely matches Calhoun’s claims is the 787, which used new engines and other technology to beat the A330-200 (and splinter international routes and make the A380 look stupid). But even so, the 787’s propulsion technology was inevitably exploited by Airbus. This resulted in the A330neo and A350XWB. They might be competitive, but they don’t make the 787 a bad idea. As with the 737MAX, Boeing’s problems with the 787 are related to program execution and have nothing to do with product definition and launch.

This brings us to today. For the reasons I’ve outlined here, airlines want the biggest, most powerful single-aisle they can buy, and Airbus’ A321neo is in the right place. With a staggering 4,525 orders, the order backlog of 3,689 jets exceeds the order book for the entire 737 MAX family of 3,500 jets.

However, the A321neo is long overdue for this hit by a new Boeing jet. The A321 airframe is 35 years old and easily beaten by something more powerful. Many of these “firm” orders are likely to be flawed, and new orders will all go to Boeing. Boeing, however, only has the 737 MAX 10 in this class, the last stop on the 737 line. It received less than one-fifth of the orders for the A321neo. There isn’t even a clear path to certification for the MAX 10, and Calhoun has threatened to cancel this variant if the US government doesn’t grant it a certification extension to keep it in common with the rest of the MAX lineup.

Calhoun’s latest announcement dramatically simplifies Airbus’ future, which seems oddly ignoring any possible rival moves. All Airbus needs to do is keep improving the A321neo and dominate a very strong middle market. They will then build the stretched A220-500, which will severely damage Boeing’s best-selling jet, the 737 MAX 8. On this path, Airbus could capture 70% to 75% of the entire jetliner market by the early 2030s.

Airbus could also retrofit the A320 family with new wings and engines; this would give them 80 percent of the market. With a shrinking revenue base and possibly not having the necessary talent, Boeing Commercial will not be able to build new jets and will only fade away.

The only option for this situation is if Boeing has a new CEO. Or, if Boeing Commercial were to be spun off as its own company, or as part of another company, would actually be able to create a future for itself.

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