Airframers in No Rush To Re-engine

 - October 22, 2010, 7:16 AM
Airbus CEO Thomas Enders (left) and COO for customers John Leahy continue their appraisal of the A320NEO’s industrial risks and market appeal. Copyright Airbus

Airbus, Boeing and Embraer seem willing to wait longer than expected to decide whether or not to re-engine their respective single-aisle offerings, as limited engineering resources and market ambivalence create a less-than-ideal environment for bold action. Boeing, in fact, has signaled that it might not reach a final decision on how to approach a successor to the 737NG until next year, while Embraer has given itself another six to nine months to reach a conclusion. Airbus, meanwhile, now says it likely won’t decide on whether or not to proceed with the A320NEO until the end of this year, after two separate anticipated launch dates passed without an announcement.

While the European airframe maker still appears the most likely candidate to launch a re-engined narrowbody, widely held expectations that it would announce a decision at the Farnborough airshow went unfulfilled, as did the more recent prospect of an imminent launch following this month’s meeting of Airbus top management.

Airbus’s hesitancy appears to center on concerns over stretching its engineering personnel too thinly over multiple new programs. Now in the early stages of parts production for the A350 XWB, it continues to dedicate an inordinate amount of its resources to the A380 and A400M military airlifter. CEO Thomas Enders has expressed wariness about repeating his company’s own mistakes as well as those of its U.S. competitor. Launching the A320NEO no doubt presents a level of risk Enders and the rest of the Airbus brain trust want to appraise precisely before committing to the $1 billion project.   

Boeing, meanwhile, has expressed a distinct lack of enthusiasm over the size of the market for a re-engined 737. Both CEO Jim McNerney and CFO James Bell have said that Boeing’s customers haven’t shown particularly keen interest in the idea, and Boeing remains unconvinced that the performance improvements promised by the various engine makers will prove sufficient to warrant such a step.

For Embraer, the fact that new engines carry the potential to cut operating costs in the E-Jets by no more than 6 percent perhaps renders the case for re-engining even less favorable. Furthermore, re-engining the E-Jets would require more than a replacement of the current GE CF34s and associated redesign of nacelles, pylons and integration. Any new engine would use a larger fan to facilitate the higher bypass ratio needed to deliver the advertised fuel burn improvements. Embraer would therefore have to raise the airframe, requiring a redesign of the wings and landing gear.

Given those drawbacks, Embraer CEO Fred Curado seems content to allow Airbus and Boeing to reach their respective conclusions before he commits his company’s resources to any new project. “The point is we’re in a relatively good position to spend more time analyzing, understanding and seeing everybody else’s moves to make the right decision,” said Curado.