Countering the CSeries

WHEN REPUBLIC AIRWAYS HOLDINGS PLACED A FIRM order for 40 CSeries aircraft in late February, it ensured that Bombardier's narrowbody will be operating in both Europe and the US by 2015 if all remains on schedule and on target, providing airlines with a 15% fuel burn gain over today's 737s and A320s. The bulk of the efficiency improvement, of course, will come from Pratt & Whitney's PW1000G geared turbofan engine (ATW, 11/09, p. 42). Bombardier claims it is in talks with a wide range of potential additional CSeries customers, and carriers that rely on 737s and/or A320s as their workhorses are growing increasingly anxious.

The C-Series "has better economics than our airplane," Southwest Airlines Executive VP and COO Mike Van de Ven tells this magazine. "I don't want to be in a competitive disadvantage with a product."

Boeing and Airbus both gave signals over the last couple of years that launching a next-generation narrowbody likely will be pushed back to the 2020s, noting that engines capable of providing the 20%-plus fuel efficiency improvement that would make the cost of a new aircraft program worthwhile weren't in the pipeline. But Pratt was able to sway Bombardier to put the PW1000G on the CSeries set to enter service in 2013 with Lufthansa (ATW, 9/09, p. 62) and CFM International last year began intensive testing on its LEAP-X engine that it says could be ready by the middle of the decade and offer a similar fuel burn gain as the GTF. It then announced in December that the engine would enter service in 2016 powering Commercial Aircraft Corp. of China's 150-seat C919, meaning development would be carried out fully whether or not Boeing or Airbus launched a new product.

By February's Singapore Airshow, airlines were putting intense pressure on Boeing and Airbus, absent launching a new aircraft, to re-engine 737s/A320s to compete with the CSeries.

"The CSeries has the new engine and has these fuel burn improvements," Van de Ven says. "We want to have a product out there that's as competitive as the next guy. So the choice is a re-engined airplane or a redesigned airplane [that can compete favorably with the CSeries]. I'm very anxious for [Boeing and Airbus] to state what they want to do."

Boeing Chairman and CEO Jim McNerney said in late January that "re-engining the 73[7] is under active consideration," acknowledging that airlines are eager "for us to make a move" on a more efficient narrowbody. He did not put a timeline on a decision but said the manufacturer has a "wedge" factored into its budget to enable it "to quickly move" on a re-engined 737 "as the market requires." ATW understands that an internal timeline likely to be adopted if a program is initiated calls for a launch announcement late this year with engine demonstrator tests in 2012 followed by flight tests in 2014 and EIS in 2015-16.

A week after McNerney's comments, Airbus COO-Customers John Leahy told reporters in Singapore that his company will make a re-engining decision "this year" and "ideally" by the Farnborough Airshow in July for a possible EIS by the end of 2015. He said if it makes a decision to re-engine, it would "like to go forward" with the LEAP-X and "a variation" of the PW1000G that would be offered through International Aero Engines. To date, Pratt and the other IAE members have not agreed on a second engine type beyond the V2500. Re-engining would deliver "15% lower fuel costs" per seat than the equivalent current A320, Leahy claimed. Should Airbus decide in the affirmative, a re-engine will be offered as an option to the existing product line, which will continue to be produced and sold. It would have the effect of delaying the single-aisle family's eventual replacement until 2024, he said.

Design Challenges

While airlines are excited to hear such talk, they question whether the manufacturers can pull off a re-engining by around 2015 that would deliver a large enough fuel burn gain, though Boeing appears to have a more serious engineering hurdle to clear than Airbus.

"I'm just not sure how much work Airbus and Boeing would have to do" to allow the new engines to fit on existing models and how much the promised benefits will be lowered as a result, Van de Ven says, adding, "I wouldn't be excited about a re-engining that lowers fuel burn by 8% . . . The fan diameters of the [LEAP-X and GTF] are such that they're going to have to do some work on the airplane, there's no question about it . . . So then it's a question of whether you get a fuel burn improvement [at least] in the 10%-12%-13% range. [An airline] could probably make that work [economically]."

The airframe manufacturers and engine-makers are not sitting idle while executives mull over the re-engining decision. LEAP-X Program Director Ron Klapproth tells this magazine that CFM is "working with [Boeing and Airbus] on versions of the LEAP-X." He acknowledges that aircraft modifications would have to be made, noting that 737NGs and A320s "are designed around a 61-in. [1.55 m.]-diameter fan." While the LEAP-X's ceramic matrix composite fan blades are 1/3 the density of CFM56 blades, their fans have a 71-in. diameter. "We are bringing larger engines to these applications," he says. "We're working closely with engineers at Airbus and Boeing" on the fan diameter issue. Beyond McNerney's comments, Boeing is mum on what a 737 re-engine program would entail, but a former company engineer contacted by this magazine was forthcoming about the challenges and options the manufacturer faces. "It's quite simple," he says. "They have looked at raising the nose gear by about 15 cm. [5.9 in.] and that will give another 5 cm. of fan diameter." He explains that a 737 based on a 1.6-1.7-m. fan diameter without significant additional modifications "would give the aircraft a 12% improvement in SFC [thrust specific fuel consumption]."

Could CFM make the LEAP-X fan blades slightly smaller? If Boeing wants to re-engine with it, as sources indicate is its preference, it will need to make a decision relatively soon. CFM plans to "freeze the engine configuration and launch the detailed design phase" by the end of 2011, Klapproth says. "If we want a 2015 EIS, we have to certify by 2014 . . . We essentially have between now and the end of next year to mature all of these technologies and in parallel we will work with the aircraft companies to finalize a fan configuration."

Boeing VP-Marketing Randy Tinseth, responding to a question from this magazine, said the PW1000G could be fitted to the 737NG. Classic and NG versions are powered exclusively by the CFM56 family and he declined to say whether exclusivity would be continued in a re-engining program. "We are talking to all engine-makers," he said. Suppliers to the 737 program suggest that fitting the PW1000G will require a lengthened main undercarriage. Pratt Senior VP-Sales Bob Keady, briefing ATW in Singapore, said the PW1000G could be installed on the 737NG and "will achieve a double-digit fuel burn improvement." He added that Boeing has "some very smart engineers" who could figure out how to fit the GTF on the aircraft without needing to modify the main undercarriage.

Lengthening the undercarriage is a major technical and cost issue and also lifts the 737 wing to a point where it would require overwing evacuation slides that would add weight and complexity. The former Boeing engineer suggests that the PW1000G could be fitted "higher and farther forward" on a 737 wing compared to where the CFM56 is placed. The A320 has significantly greater ground clearance, making Airbus's challenge much simpler, though some modifications likely still would be necessary.

Costly Choices

Re-engining would not be a low-cost endeavor for either manufacturer. Teal Group VP-Analysis Richard Aboulafia estimates that it would cost Airbus $1 billion and Boeing up to $2 billion. Speaking at the 24th Annual SpeedNews Commercial Aviation Industry Suppliers Conference in Beverly Hills, Calif., he said he expects Republic's order has forced the airframe OEMs' hands. "Any doubt that I had that a 737/A320 re-engining decision wouldn't take place this year . . . is taken care of by the Republic CSeries order. There are people who say Boeing and Airbus will be happy to give up the 130-seat segment. I doubt it. That's a key part of their volume output. They have no choice but to fight back, to re-engine what they already have."

Morgan Stanley MD Heidi Wood said she believes Airbus will make an announcement regarding Pratt's GTF at Farnborough. "The waters are about to get pretty bloody in the low end of the single-aisle market," she predicted at the SpeedNews conference. At the same meeting, Airbus Head of Marketing Communications Alan Pardoe said the company will defend its presence in the under-150-seat market and noted that a 138-seat CSeries 300 is a direct competitor to the A319. Drawing an analogy between Airbus and the Chinese Year of the Tiger, which began in February, he said, "the Tiger is not going to let anyone steal a part of its business."

But Bernstein Research is skeptical that either OEM will re-engine, stating in a recent report that it would be a "bad idea if [current model 737/A320] backlogs are strong, if there is no serious near-term competitive threat and if there will be an opportunity within the next 10 years to bring out a next-generation airplane."

McNerney has said that a 737 re-engining would cost only 20% of the pricetag of a new program but Bernstein cautions that it would be more complicated than Boeing is letting on, involving "other systems and performance upgrades, which would take cost and effort above the 20% level." The consultancy notes that a 737/A320 re-engining launched in 2010 would devalue massive six-year backlogs for current models while suggesting that "the interim introduction of a re-engined A320 or 737 in 2015 could create operational complexity and higher maintenance costs that would offset some fuel burn advantages." It adds, "Interim aircraft are generally unattractive if they have short production runs."

Perhaps most significantly, Bernstein believes that the CSeries' ability to be a serious competitor to the 737/A320 before 2020 is overstated. The New York-based firm, which often has been prescient regarding 787 and A380 program difficulties, predicts Bombardier will face major development challenges and could experience "significant delays on the CSeries." It suggests Boeing and Airbus would be better served by launching 737/A320 successor programs around 2014-15 for EIS in 2020-21. It asserts that a re-engine launched this year would only make sense if the companies determine that a next-generation 737/A320 absolutely won't be feasible until the mid-2020s.

Timing Matters

New program launch announcements in 2015 would come just as backlogs for existing models would be declining and likely would allow Boeing and Airbus to leapfrog the CSeries in terms of structures, systems and even engines, Bernstein argues. But such a decision, however logical to the manufacturers, may not satisfy airlines facing rising fuel costs and pressure to reduce carbon dioxide emissions, particularly with both the LEAP-X and PW1000G slated to be out on the market within five years.

"The engine manufacturers have an engine they're ready to put on something," Van de Ven says. "They think these engines are going to provide 15%, 16%, 17% fuel burn gains . . . [Considering fuel costs and emissions concerns], if we want to be in a position where we can still offer low fares, we need a better piece of equipment . . . The airline industry is facing an extremely difficult economic environment. If [per-barrel oil] prices are going to be $70, $80, $90 and north of that long-term, we need a better airplane from a fuel burn perspective. We need new airplane technology. So we are waiting to see what choices are out there . . . and we'd like to make that choice sooner rather than later."