A320 (AirlineEconomics)

www. av i at i o nne ws - o nl i ne .
c o m
2012
A320 GUIDE
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CONTENTS
2 The A320 Family:
The facts
Airline Economics has produced
this brief aircraft guide for the A320
as this aircraft type is likely, in the
near future, to begin to stem the tide
of rapidly-declining values.
20 The A320 New
Engine Option
Alan Pardoe, marketing
communications director at Airbus
spoke to Airline Economics about
why the A320neo is a good buy.
eo fuel burn savings rationa
ctor
tandard profile and weights
sus CFM56-5B
Thanks to Sharklets A320neo delive
Engine
SFC
-15.3 %
Reference
A320 CFM
rn
s %
roved
ore
~7%
% more area* ~7%
werplant integration ~1%
Sharklets -2.4%
A320neo LEAP-1A versus A320 CFM56
1 Airline Economics: A320 Guide 2012 www.airlineeconomics.co
24 The next step
Which engine should you choose
for your A320neo?
30 A question of
confidence
David Cook pulled engines out of
fighter jets in his RAF days and sold
engines to airlines when he worked
for a major engine manufacturer.
Now as president of independent
ASM Consulting he offers his views
on the new engines being offered
for the A320neo.
36 A question of
circumstance
The 737max v the A320neo the
definitive guide to both aircraft.
42 737-800 Vs A320-
200
For those shopping in the
160-aircraft, Airline Economics has
gathered the relevant information on
the main contenders.
56 Data
2012 ISSUE
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INTRODUCTION
A
irline Economics has
produced this brief aircraft
guide for the A320 as this
aircraft type is likely, in
the near future, to begin to
stem the tide of rapidly-declining values.
The majority of A320 Family members
are amongst the most liquid commercial
jets in the current market. The A319, the
A320 and the A321 are amongst the most
attractive aircraft types on the market.
After the launch of the Boeing 737NGs
to match the Airbus A320 Family, the
150 seat narrow body market enjoyed a
balanced duopoly with neither of the two
types able to claim a decisive technological
advantage over the other. For investors
and nance houses this was critical in
the success of the aircraft types as this
stable situation is as a strong stimulus for
The A320 Family: The facts
them to commit funds. This duopoly will
now continue with the A320Neo and the
737Max with the margins between the two
aircraft remaining static for the most part.
The story so far
For the European Airbus consortium, the
A320 was its rst product in the short-to-
medium haul single aisle jet market. While
Europe had tried its hand in this market
before with products like the Mercure, the
Caravelle, the Trident and the BAC 1-11,
the US had been dominating the segment
with the JT8D powered Douglas DC-9 and
Boeing 727 and 737 families. In the early
1980s McDonnell Douglas was the rst
to adapt the DC-9 to the higher fuel cost
environment and the upcoming Stage III
noise-regulations by stretching the DC-9
and re-engining this DC-9 Super 80
(later renamed MD-80) with an improved
version of the good old JT8D engine; the
Series -200. Boeing responded with a
stretched and modernized version of the
old 737-200 , called the 737-300.
The 737-300 was the rst of the 737
generation now known as the Classics
(-300, -400 and -500). One of the major
contributing factors to the success of the
737 Classic turned out to be its new, clean,
quiet and fuel efficient GE/SNECMA
CFM56-3 engine. While the 737 Classic
was slowly gaining the upper-hand
over the MD-80, the Airbus planned an
attack on the dominating position of the
American manufacturers in the single aisle
market. These plans eventually took the
form of a truly high-tech aircraft, featuring
amongst others the revolutionary y-by-
wire technology, side-stick controllers and
www.airlineeconomics.co Airline Economics: A320 Guide 2012 3
INTRODUCTION
containerized belly cargo space.
Initially only powered by the -5A
derivative of the CFM56 engine, the rst
Airbus narrow-body, designated A320,
made its rst ight in early 1987. While
some of the European ag carriers where
natural launch customers for the A320,
it took a bit more efort to nd customers
outside of Europe and with the bankruptcies
of early North American A320 customers
(incl. Pan American and Branif) a number
of early A320s even ended up in the
Arizona desert. Eventually North America
and the rest of the world warmed up to the
A320andBoeing was forcedto modernize
its own ofering in the narrow body market
to match the European newcomer.
Sticking to the familiar 737 designation
and other typical Boeing narrow body
characteristics, in 1997 the Boeing 737 NG
(Next Generation) was introduced, once
more powered by a CFM56 derivative,
this one designated the -7. Although both
manufacturers had their victories in the
battle for market share, Airbus triumphed
with an order from JetBlue in 1999, which
opened up the low-cost carrier market
to the A320. Traditionally this lucrative
market segment had been dominated by
Boeings 737, largely based on the fact that
the father of the low-cost model Southwest
Airlines was a dedicated 737 operator.
Today, A320 family aircraft can be found
on all continents ying for operators with
all kinds of business models, from low-cost
airlines and leisure charter operators to
scheduled network carriers. Just before
the global nancial crisis hit, Airbus was
struggling to keep production rates up to
cope with demand and opened up a new
nal assembly facility for the A320 family
in Tianjin, China.
The basic 150-seater A320-100 made its
rst ight in February 1987 but this version
was quickly superseded by the more capable
high MTOW -200 version. In 1993, a 185
seat, 6.93 m. stretched version called the
A321-100 made its rst ight. In 1997, in its
turn, the-100was efectivelysupersededby
the more capable A321-200.
In June 1995 the A320 and A321 were
joinedby the 124 seat A319-100 featuring a
shorter fuselage (just under 4m) compared
to the A320. In 2002, the fourth family
member made its rst ight, the 107 seat
A318-100 at 2.4 m. shorter than the A319
was verging on the regional jet market.
The A318 was aimed at operators with a
requirement for 100-seat aircraft but a
desire to maintain eet commonality but
INTRODUCTION
A320Neo Family aircraft are the better
asset in the long term. For now we have to
wait and see.
Historically, it was the IAE V2500-A1
powered A320 aircraft that were considered
to be inferior against all others. IAE was
quicktoimprovetheperformanceofthe-A1
via the Phoenix kit. While IAE had its A1,
CFMI had its Double Annular Combustor
(designation: /2P) as its problem engine.
The DAC was CFMIs answer to the request
from some Northwestern and Central
European carriers for an ultra-clean
engine to reduce environmental charges
imposed by the local governments. While
the DAC clearly met that requirement,
it came at the expense of slightly higher
operational cost. Bankruptcies of the
original operators released a number of
DACs to the market and nanciers were
confronted with negative reactions from
potential new operators, either for real
reasons or as leverage in the negotiations.
the International Aero Engines (P&W/
RR/MTU/JAEC) V2500-A1/A5 series and
the CFMI CFM56-5A/5B series, both also
at diferent thrust levels. From a nance
perspective the 50/50 split of the A320 eet
in V2500 and CFM56 powered aircraft is
a negative factor. Whereas the competition
between the two engine consortia may
result in a little more initial discounting,
for remarketing purposes, the A320 eet
is efectively split in two major segments.
Fortunately both engines each enjoy a
substantial market base, hencethenegative
impact of the split is not major, but should
this not remain the case with the A320neo
family then Boeing with its single engine
Max could nd itself in a strong position
when considering remarketing. The
diferences between the P&W and CFM
engine oferings on the Neo aircraft are so
huge that there is bound to be a diference
in performance and maintenance costs
this, not the airframe, will decide which
the economics did not stack-up, the aircraft
was too heavy to compete economically
with larger turboprops and with 100 seat
turboprops now coming to market this
aircraft seems to be more or less dead in the
water.
Efectively, neither Airbus nor Boeing
can claim complete superiority in the
narrow-body market. Most asset based
nanciers are equally happy to nance the
leading Boeing and Airbus aircraft, but the
less suitable variants of both families are
becoming ever more difcult to nance.
The short range A320-100 is perhaps
the worst mistake to date for the A320
Family. The aircraft featured a low MTOW,
wing fuel tanks only and no wingtip fences.
Only 21 A320-100s were built and all were
equipped with CFM56-5A1 engines and all
ended up with Air France which has been
phasing them out of its eet ever since.
Airbus will state that the biggest plus
point of an A320-200 is that it has an engine
choice, while Boeing argues the opposite
stating that its 737 NGs sole engine choice
makes it easier to remarket. (An argument
that has carried forward to today with the
new engine options the Airbus A320neo
with its dual engine choice and Boeings
single-sourced 737Max).
While Boeing elected to offer only
CFM56-7B engines (at different thrust
levels), Airbus ofered a choice between
A320 FAMILY COMPETITION
100-120 seats A318-100 vs. B737-600, Embraer 190/195 and Bombardier C-Series
120-140 seats
A319-100 vs. B737-700, C-Series, the Chinese C919 and the Russian
MS21
140 -170 seats
A320-200 vs. B737-800 and in the future potentially the C919 and Rus-
sian MS21
170-200 seats
A321-100/-200 vs. B737-900/-900ER, and in the future potentially the
Chinese
INTRODUCTION
easyJet in the UK.
Spirit is able to half the breakeven fare
per passenger from that of its competitor
JetBlue and its cost per seat mile is better
than any other airline in its class. Therefore
it is the case that the A320 and the A319,
if configured correctly, can beat the
economics of their Boeing rivals, and that
is before purchase price, pilot training
and maintenance costs are taken into
consideration.
Spirit Airlines is not alone in benetting
from this airline model. Easyjet is currently
looking very strong indeed with its A320
Family aircraft congured in such a way
that will allow it to go head to head with
foremost competitor Ryanair and its eet
of 737-800s and come out on top.
EasyJet is the rst of a new type of
airline it is a low-cost model but does not
act like one. It is moving away from the
traditional low-cost poor passenger service
as it aims to provide the best of both worlds
a new airline model that targets business
travellers, which allows passengers book
extra bags without fuss and choose their
seats at a small premium. All of this has
been made possible by the A320 family
aircraft it operates as the airline was able to
recongure its Airbus aircraft so that it has,
in efect, erased the seat cost advantage of
the 737-800.
Easyjet is at the vanguard of A320 family
conguration at this time and when other
airlines are able to copy this conguration
they too will be in a position to trump the
economics of the 737-800, after that it is a
question of strong airline management and
a robust business plan.
The A320 single-aisle jetliner family
(composed of the A318, A319, A320 and
A321 and neo derivatives) is the undisputed
best-selling aircraft product line of all time.
It is used in a full range of services from
short-haul airline routes to intercontinental
segments, on operations from challenging
city central airports to high-altitude
airelds and even an Antarctic ice runway.
The aircraft family really has seen and done
it all.
A320 Family
Total orders 8418
Total deliveries 5125
In operation 4979
(as of May 2012)
number of signicant eet concentrations,
both for the individual types as for the
family as a whole and these, which include
India and central Europe may yet see
another round of distressed pricing.
The A320 Family has a clear run with
the Neo variants through to 2035 at the
top of the market. After that who knows.
For the A320 Family aircraft in the air
today there is a range of things happening.
From reconguration that makes the A320
better per passenger mile than the 737-
800 afecting current prices to conversion,
there is much movement still to come.
The latter, conversion is the next step. The
EADS EFW conversion programfor A320
passenger to freighter was halted due to
lack of demand in 2010 but that was due to
market conditions.
It is highly likely that this program will
start once again soon and head towards
certication. The availability of a cargo
conversion project in a way can be seen as
an insurance policy for any investor in early
A320s.
A320 operators today
At this time, two of the best-performing,
publicly-listed airlines are flying A320
Family eets. Spirit Airlines in the US and
This experience created a bad name for the
DAC which remains to this day. The DAC
engine can be converted to a Single Annular
Combustor by swapping the enginecore but
this is too costly to be seen as economical.
Historically, used A320 values have
fluctuated slightly more compared to
737NG values. While Airbus is accused of
a more aggressive pricing policy, allegedly
resulting in significant discounts, this
most likely is not the whole explanation
for the higher volatility. Because the A320
was launched long before the 737NG, the
A320 has lived through more downturns.
In addition, as a coincidence, a number of
A320 operators defaulted during the post
9/11 crisis, while practically all of the 737NG
operators survived. As a consequence, a
higher number of A320s faced distressed
market circumstances, compared to the
rival 737NG. There seemto be no specic
structural reasons as to why the A320
should be more vulnerable during a
downturn, maybe apart from the size and
composition of the operator base. The
quality and diversication of the operator
base does play a role. As history has proven,
a high eet concentration with one or more
weaker airlines increases vulnerability of
the type. Within the A320 Family, there is a
SPIRIT AIRLINES THE BEST BREAKEVEN POINT INTHE MARKET
Spirit Airlines Southwest JetBlue
Breakeven fare per pax $62.96 $96.98 $133.00
Cost per seat mile (CASM) $9.73 $10.43 $12.13
Aircraft utilization 12.8 hrs/day 10.9 hrs/day 11.7 hrs/day
INHERENT COST ADVANTAGE IN EASYJETS MODEL
Legacy A319 easyjet A319 easyjet A320
124 seats 156 seats 180 seats
70.1% load factor 87% load factor 87% load factor
84 passengers 136 passengers 156 passengers
Fewer passengers with
higher costs
56% more passengers than
Legacy A319
15% more passengers than
easyjet A319
FLEET AS AT 1/1/2012
Owned Leased Total
A319 111 56 167
A320 29 6 35
Total Fleet 140 62 202
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INTRODUCTION
This represents an important percentage
of the 8,400-plus rm orders booked for all
A320 aircraft types.
A318
Total orders 81
Total deliveries 77
In operation 70
(as of May 2012)
The A318 seats 107 passengers in a
typical two-class cabin layout over a range
of up to 3,250 nm/6,000 km, powered by
CFM56-5 or PW6000 engines.
The A318 brings all the benefits of
Airbus commonality and comfort to the
100-seat market segment but as a regional
jet the aircraft was found to be too heavy
to be able to be competitive. In the end
this version of the A320 Family could not
A319 and A321; while Tianjin assembles
A319s and A320s.
Tianjin is Airbus rst assembly facility
located outside of Europe, resulting from
a joint venture involving Airbus with a
Chinese consortium comprising the Tianjin
Free Trade Zone (TJFTZ) and China
Aviation Industry Corporation (AVIC).
To ensure the type keeps its competitive
edge, Airbus has continued to invest in
improvements across the product line,
including the development of the A320 new
engine option (A320neo) enhancements to
the aircrafts aerodynamics, upgrades to be
the widest passenger cabin in its class, and
extended service intervals for the airframe.
Since Airbus launch of the A320neo
in December 2010, more than 1,320 rm
orders have been logged from 24 customers
as of June 6, 2012 setting a sales record
of its own with bookings from airlines and
leasing companies alike.
Since the A320 entered service in 1988,
the various family types have transported
approximately 90% of the worlds
population in total numbers, carrying some
six billion passengers.
The A320 Familys numbers speak for
themselves: An A320 takes of or lands
somewhere in the world every 2.5 seconds
of every day, more than 50 million operating
cycles logged since entry-in-service, and a
best-in-its-class dispatch reliability of over
99%. The A320 Family has won a majority
market share in segments that range from
mainline network carriers and low-cost
airlines to charter operators and leasing
companies.
Continued development
To regularly enhance the A320 Familys
capabilities and performance, Airbus
invests more than 100m annually in
keeping the aircraft competitive and
efficient. Airbus has continuously
improved payload and range since the
A320 Familys service entry, while various
aerodynamic renements have brought
additional reductions in drag for better fuel
efciency and lower emissions.
Improvements in the two jet engine types
currently available on the A320 Family
CFM Internationals CFM56 and the
International Aero Engines V2500 have
resulted in fuel consumption reductions,
lower emissions, longer on-wing lifetimes
and more cost-efcient maintenance.
An enhanced cabin configuration
developed by Airbus for new production
aircraft as well as for retrot on existing
aircraft provides additional shoulder-
level room for passengers, 10% greater
stowage volume for overhead baggage,
and a modern ambience using LED
lighting, all while making best use of latest
technologies, materials and design. As an
added bonus, the new cabin also brings a
reduction in weight.
Output increase
Airbus will increase its output rate to 42
aircraft per month in the fourth quarter of
2012.
The A320 Family is produced on two
Airbus assembly lines in Europe: Toulouse,
France and Hamburg, Germany; which
have been complemented by an additional
facility in China. Toulouse is home to the
initial assembly line, building A320s;
Hamburg has responsibility for the A318,
DIMENSIONS
Overall length 31.44 m
Cabin length 21.38 m
Fuselage width 3.95 m
Max cabin width 3.70 m
Wing span (geometric) 34.10 m
Height 12.51 m
Track 7.59 m
Wheelbase 10.25 m
CAPACITY
PAX Typical seating 107 (2-class) Max 132
Bulk hold volume 21.21 m
PERFORMANCE
Range 5 950 km
Mmo M0.82
Max ramp weight 59.4 (68.4) tonnes
Max take-of weight 59.0 (68.0) tonnes
Max landing weight 56.0 (57.5) tonnes
Max zero fuel weight 53.0 (54.5) tonnes
Max fuel capacity up to 24 210 litres
ENGINES
PW6000A
CFM56-5B
Thrust range 96 to 106 kN
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INTRODUCTION
PW6000 delayed introduction of that
engine substantially and the CFM56
became the preferred engine by far for
the A318. Currently, the PW6000 is only
operated by one airline, which makes the
combination rather unique but at the same
time unsuitable for asset-based nancing.
Market experience has proven that even a
relatively young, CFM56 powered A318
could not be sold for prices that exceed the
break-up value of the aircraft, or rather the
value of its engines. Fromthat perspective
the CFM powered planes at least have
another edge over the PW6000 planes.
The conclusion has to be that the A318 does
not make a popular asset from a nanciers
point of view or indeed from an owners
The A318-100s MTOW ranges from
56.000 to 68.000 kg. While the engines
powering the larger members of the
family obviously are too heavy for the little
A318, ofering a more optimized engine
type would jeopardize the important
commonality benet, which is why Airbus
decided to offer both options. Airlines
that already operated CFM-powered
aircraft and preferred the commonality
element could select a CFM56-5B8/9
powered A318, while airlines preferring
an optimized power-plant could select the
uniquely for the A318 developed Pratt &
Whitney PW6000 engine.
With the A318 already a slow seller
as such, development problems for the
compete efectively against the Embraer
and Bombardier oferings.
Family Relationship
As the smallest A320 Family member,
the A318s fuselage is 2.39 metres shorter
than the A319. Take-of weight choices
of up to 66 metric tonnes provide airlines
with greater operating flexibility and
higher loads in operating the A318, with a
maximum ight range of 2,800 km.
Designed to serve markets with frequent
services on low-density routes, the A318
accommodates 107 passengers in a typical
two-class cabin conguration. Airlines
enjoy the benets of Airbus technology,
including one of the newest wing designs
in its size category and the application of
advanced materials in the airframe.
The main selling point of the A318 has
become its wide cabin, which ensures an
edge with large overhead bins for carry-on
luggage. The cabin cross-section also ofers
unrivalled cabin exibility, ranging from
four-abreast rst class and ve-abreast
business seating to comfortable ve- and
six-abreast economy class arrangements.
Unlike certain competitors, the A318 has
large passenger and service doors at both
the front and rear of the aircraft, allowing
galley servicing and cabin cleaning to be
carried out simultaneously. These larger
doors speed passenger ow as well as the
servicing.
The cockpit is shared with all of the other
A320 Family aircraft. This enables A318
pilots to y any other A320 Family aircraft
with a single-type rating, allowing airlines
to schedule the aircraft best matched to
passenger bookings on a per-ight basis.
The other selling point of the A318 is
the steep approach capability of the type.
The A318 is the largest commercial aircraft
certified to land at steeper-than-usual
gradients, making it ideal for operations
at such constrained locations as city centre
airports translating to signicant cost and
time savings for business travellers.
Since 2009, British Airways has been
operating A318s with steep approach
capability from London City Airport (LCY)
to New Yorks JFK International Airport.
These aircraft are equipped for premium
service with seats that convert into full lie-
at beds, along with OnAir connectivity
for passengers and this has proved that the
A318 can carve out a market segment if well
targeted.
DIMENSIONS
Height 11.76 m
Track 7.59 m
Wheelbase 11.04 m
CAPACITY
FREIGHT
LD3 capacity underfoor 5LD3-46W
Max pallet number underfoor 5
Total volume 17.0/24.2 m (LD3/LD3+bulk)
PERFORMANCE
Range 6 850 km with sharklets
Mmo M0.82
Max landing weight 61 (62.5) tonnes
Max fuel capacity up to 24 210 (30 190) litres
ENGINES
CFM56-5B
V2500-A5
Thrust range 98 (120) kN
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INTRODUCTION
Below the main deck, an unmatched
cargo capability results from the A320
Familys wider fuselage enhanced by
its containerised cargo loading system
that is unique in its aircraft category and
is compatible with the airline industrys
freight system for widebody jetliners.
Advanced navigation technology
developed for the A320 Family is available
ontheA319. Theuseof RNP-AR(Required
Navigation Precision Authorisation
Required) procedures combined with RTA
(Required Time of Arrival) operations
eliminates the need for holds during a
ight, and enables a continuous descent
approach. The net benets are lower noise
and reduced fuel burn, as less engine thrust
and value projections are assumed. The
A319-100 is available with MTOWs
ranging from 64.000 to 75.500 kg and up
to two ACTs are optional.
The A319 has the same optimised cabin
cross-section as the other A320 Family
members which is the widest single-
aisle fuselage on the market and sets the
standards for passenger cabin adaptability
in this segment. This allows for top-of-the-
range comfort with generous seat width, or
an extra-wide aisle for fast turnarounds. A
new cabin interior introduced by Airbus
provides a fresh new look, significant
increase in overhead stowage, a noticeable
reduction in noise, and options for
ambience lighting all with lower weight.
perspective.
Steep approach capability
Airbus A318 is the largest commercial
aircraft certied to land at steeper than
usual gradients, with the potential to
transform long-haul operations between
city centres and reduce precious time and
costs for business travellers.
The A318 was approved for steep
approach landing capability by the
European Aviation Safety Agency (EASA)
in 2007, with this modern jetliner certied
for a 5.5-degree approach slope. This
compares to a nominal 3-degree slope for
standard operations.
The A319 seats 124 passengers in a
typical two-class cabin layout over a range
of up to 3,700 nm/6,850 km, powered by
V2500-A5 or CFM56-5B engines.
The second most popular member of the
family is a simple shrink from the baseline
A320. As a slightly smaller version of
Airbus A320, the A319 continues to prove
its versatility enabling carriers around the
world to benet from the aircrafts range
options and seat layout exibility.
A319
Total orders 1519
In operation 1331
(as of May 2012)
In addition to the standard 124-seat
conguration with a range of up to 3,740
nautical miles, Airbus ofers an option with
a seating capacity of up to 156 passengers
a version that is being ordered by an
increasing number of low-cost airlines.
The operator base is split between
CFM56 and V2500-A5 operators. Apart
from some DAC powered planes, the A319
has relatively few problem variants. The
type is used by a wide range of operators
ranging from traditional network carriers
to LCCs and even corporate/private jet
operators. The A319 is suitable for asset
based transactions, albeit some of the older
-5A powered aircraft may be popular with
some second or third-tier airlines as result
of current market prices. For transactions
involving well maintained, standard spec
A319s there seem to be very few things that
can go wrong from an asset based point of
view that is, as long as realistic valuations
DIMENSIONS
Height 11 m
Track 7.59 m
Wheelbase 12.64 m
CAPACITY
FREIGHT
LD3 capacity underfoor 7 LD3-46W
Total volume 25.8/31.7 m (LD3 / LD3+ bulk)
PERFORMANCE
Mmo M0.82
Max fuel capacity up to 24 210 (30 190) litres
ENGINES
CFM56-5B
V2500-A5
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INTRODUCTION INTRODUCTION
enables choices of four-, ve-, and six-
abreast layouts with wider seats, along with
opportunities for wider aisles and increased
overhead storage bins. Rapid turnaround
times on the ground are further facilitated
by the A320s bigger passenger and service
doors.
Following the Boeing lead, Airbus has
developed a new interior for the A320
and its other family members that brings a
fresh new look to the cabin. Improvements
include a signicant increase in overhead
stowage, a noticeable reduction in noise,
and new options for ambience lighting. An
added advantage is this updated interiors
lower weight.
Advanced navigation technology
rated pilot can transition to any other
Airbus aircraft with reduced training
(known as Cross-crew Qualication), and is
able to operate another Airbus aircraft type
while still actively ying the A320 Family (a
capability called Mixed Fleet Flying).
The A320 now also benefits from
blended winglets, or sharklets as Airbus
calls them. As with the A319 these are
expected to result in at least a 3.5% reduced
fuel burn over longer sectors, corresponding
to an annual reduction in CO2 emissions of
around 700 tonnes per aircraft.
The A320s fuselage is seven inches
wider than its competitors, enhancing
comfort for passengers and increasing
revenue opportunities for airlines. It
is required.
A signicant enhancement in play at
this time is the introduction of Sharklets
which are in efect blended winglets and
will act to provide a 3.5% saving in overall
fuel consumption on long route sectors.
A320
Total orders 5672
In operation 2867
(as of May 2012)
The A320 accommodates 150
passengers in a typical two-class cabin
layout, and has a 3,300 nm/6,150 km
range. It can be powered by CFM56-5 or
IAE V2500-A5 engines.
Airbus launched its best-selling single-
aisle product line with the A320. Typically
seating 150 passengers in a two-class cabin
or up to 180 in a high-density layout for
low-cost and charter ights the A320 is
in widespread service around the globe on
services that vary from short commuter
sectors in Europe, Asia and elsewhere to
trans-continental ights across the United
States.
The A320s includes the extensive use
of weight-saving composites, an optimised
wing that is 20% is more efcient than
previous designs, a centralised fault display
for easier troubleshooting and lower
maintenance costs, along with Airbus
usual y-by-wire ight controls.
The A320 pioneered fly-by-wire
controls and the impact of the same
cannot be overstated. They provide total
ight envelope and airframe structural
protection for improved safety and
reduced pilot workload, along improved
ight smoothness and stability, and fewer
mechanical parts.
In addition, fly-by-wire and cockpit
standardization across the A320 Family
are at the heart of Airbus commonality,
which allows a pilot qualified on one
Family member to y them all, using the
same type rating. Over 80% of operators
with 10 or more A320 Family jetliners in
their eets y more than one model of the
Airbus single-aisle product line enabling
them to benet fully from the commonality
concept through more efective scheduling
of aircraft and crews. Taking the Airbus
commonality one step further, an A320-
DIMENSIONS
Height 11.76 m
Track 7.59 m
Wheelbase 16.91 m
CAPACITY
FREIGHT
LD3 capacity underfoor 10 LD3-46W
Total volume 36.8 / 42.7 m (LD3 / LD3+bulk)
PERFORMANCE
Mmo M0.82
Max fuel capacity 24 050 (30 030) litres
ENGINES
CFM56-5B
V2500-A5
INTRODUCTION
it is clear that aircraft and engines or indeed
aircraft with engines that can be considered
niche are to be avoided. He worst case of
this to date for the A320 family aircraft
is with a eet of A320s in India which,
to lower the runway loads, are equipped
with four-wheeled main landing gears, as
opposed to the standard two-wheel main
gear bogies. These aircraft are more or less
only t for parting out outside of India.
A321
Total orders 1146
In operation 711
(as of May 2012)
The A321 accommodates 185 passengers
in a two-class conguration over a range of
up to 3,200nm/5,950km, and up to 220
passengers in a high-density conguration.
It can be powered by CFM56-5 or IAE
V2500-A5 engines.
The A321 is the A320 Familys largest
type. This aircraft has a stretched fuselage
with an overall length of 44.51 metres,
along with an extended operating range of
up to 3,000 nautical miles while carrying
a maximum passenger payload. The A321
typically accommodates 185 passengers in
a two-class conguration (16 in rst class
and 169 in economy) or in a high-density
seatinglayout cangoupto220passengers.
(/3) upgrade which includes changes
in the high-pressure (HP) compressor,
combustor, HP turbine and low-pressure
(LP) turbine nozzle. Together these have
been designed to increase time on wing,
improve fuel burn, give the engine more
margin over CAEP 6 emissions levels
and improve durability. New Tech-Insert
components can be installed at engine
overhaul except for the combustor. Tech
insertion has now become the production
standard. The CFM-56-5B../P is available
at various thrust settings, ranging from 21.6
Klb (B8) to 33 Klb (B3), all essentially
being the same engine. A bump version
for hot and high airports is available also.
In response, IAE introduced an engine
upgrade for their V2500-A5, called
SelectOne. The upgrade includes high
and low-pressure turbine improvements,
an upgraded compressor, a new variable
stator vane systemand newengine control
software. IAE claims up to 1% lower fuel
burn and 20% longer time on wing from
the upgrade. The A5 is available at various
thrust settings as well, ranging from the 22.0
Klb V2522-A5 to the 33 Klb. V2533-A5. A
bump version for hot and high airports is
ofered on specic V2500 versions.
On the main nanciers prefer aircraft
with higher thrust engines as this helps
with remarketing by widening the pool
of potential customers and avoids the
additional cost of a thrust upgrade, which
is not cheap. So for nancing and investing
contributes to the A320s operational
flexibility. This includes the Required
Navigation Performance (RNP) capability,
which reduces approach distances for
landing while reducing fuel consumption
and CO2 emissions; and the Global
Position (GPS) landing system, allowing
instrument-type approaches where ground
stations are not available.
Also ofered are the Microwave Landing
System (MLS) for increased approach
capability in low visibility conditions; and
the Future Air Navigation System (FANS)
for optimised flight path and reduced
aircraft spacing.
AstheA320-200srstightisnowover
twenty years ago, it is obvious that engine
technology has evolved in the meantime.
While there is a clear diference between
the 737 Classic and the 737 NG, there is no
such sharp distinction between early and
late A320s. One diferentiator that is used
by nanciers is to call CFM56-5Apowered
aircraft A320 Classics, contrasting them
from the more modern -5B powered
aircraft. A trend can be detected that
increasingly discriminates the older -5A
powered aircraft as becoming less desirable
for nancing.
Both CFMI and IAE continue to
improve their products. The rst generation
CFM56-5A was succeeded by the -5B and
later the -5B was improved with a new 3D
Aero package (designation /P). In mid-
2007, CFMI introduced a Tech Insert
INTRODUCTION
payload, up to 500 nautical miles of more
range, lower operating costs, along with
reductions in engine noise and emissions.
A320neos fuel savings translate into some
3,600 tonnes less CO2 per aircraft per year.
Additionally, the A320neo will provide a
double-digit reduction in NOx emissions
and reduced engine noise.
The new A320 versions will have over
95% airframe commonality with the
existing models, enabling it to t seamlessly
into existing A320 Family eets a key
factor for Airbus customers and operators.
In the first year after its launch in
December 2010, some 1,420 orders and
commitments had been booked for the
A320Neo, making it the fastest-selling
commercial aircraft ever.
The importance of Sharklets
The Airbus Sharklets featured on the
A320neo also will be available for A320
Family jetliners beginning in late 2012.
These devices cut down on aerodynamic
drag by helping reduce the spiral-shaped
vortices that are formed at the wingtips of
aircraft during ight.
The Sharklets should bring more than
3.5% savings in overall fuel consumption
on long route sectors to A320 aircraft, while
also improving take-of performance and
increasing payload by 500 kg. allowing
for additional range or more passengers to
be carried.
These devices also should allow for less
thrust to be used during take-of when
runway performance is not limiting,
thereby decreasing airport noise. In
addition to their environmental benets,
the Sharklets aerodynamic improvements
provide multiple advantages for operators
including increased range and payload,
better take-of performance and rate-of-
climb, higher optimum altitude, reduced
engine maintenance costs and higher
residual aircraft value.
Airbus rolled out its A320 development
aircraft equipped with Sharklets in
November 2011, for a ight test campaign to
validate the benets ofered by the devices,
which was joined in April 2012 by the rst
new-build A320 with Sharklets. With the
popularity of its Sharklets, Airbus also is
pursuing a large winglet retrot option
for the in-service eet of A320 Family
jetliners, which will further enhance the
fuel efciency and residual value of these
aircraft operated around the world.
base and from that point of view can still
claim superiority over its far more recent
opponent, the Boeing 737-900/900ER.
The A321-200 is available with MTOWs
ranging from 78.000 to 93.500 kg., with
the basic MTOW 78.000 kg. Up to two
ACTs are optional. There is also a small
number of DAC-powered A321s.
A320neo
Total orders 1320
The A320neo was initially poorly
received by aircraft lessors, but with fuel
prices dangerously high in the late 2000s
airlines wanted a stopgap aircraft, which
resulted in the A320neo family. The
A320neo is in efect an upgraded aircraft
that will have a market-leading life of
around 15 years. It is very important to
note that the manufacturers and airlines
are fully aware that by the mid-2030s
there is likely to be new game changing
aircraft brought to market with technology
hitherto only seen in the realms of science
ction. So given this fact, there seemed to
be little gain in developing a whole new
aircraft that will not see service until 2020
at the earliest that would come with a very
high price tag to cover R&D expenditure by
the manufacturer only for it to be obsolete
within 15 years, the economics just didnt
stack-up. So it was that Airbus rst spotted
the way that the market was moving and
it took the brave and correct decision to
launch an upgraded aircraft and not an all-
new aircraft.
Boeing was somewhat backed into
a corner by the launch of the A320neo
and its ensuring success, which forced
its competitor to introduce the 737Max.
So it is that the A320Neo has dened the
narrowbody aircraft market over the past
12months and it will continue to do so well
into the next decade and beyond.
The A320neo provides the minimum
change with maximum benefit for the
best-selling A319, A320 and A321 through
the availability of two new jet engine
choices CFM Internationals LEAP and
the PW1100G PurePower from Pratt &
Whitney along with the use of Airbus
large Sharklets.
Improvements with the A320neo
include a 15% reduction in fuel
consumption, two tonnes of additional
The twin-engine A321 can be powered
by either of two engine options: the CFM
International CFM56 or International
Aero Engines V2500. This will be changed
from 2015 as deliveries of the A321neo
begin with engine options coming from
theimpressiveP&WPW1100GPurepower
and CFM Leap X. The new engines, along
with weight savings and Sharklet wing
tips should, Airbus hopes, give a 15% fuel
savingwhile increasing the range up to 500
nautical miles/900 km or 2 tonnes of extra
payload.
The A321, as with the other A320
Family members, benetsfromoperational
commonality with other Airbus aircraft,
which provides carriers with tremendous
exibility in matching aircraft to specic
route requirements. All A320 Family
aircraft share a single-type rating allowing
pilots to y any member of the Family after
attending only one training course and
enabling the same team of mechanics to
maintain an aircraft.
The A321 has proved itself to have
rst class operational exibility - with the
option to provide wider seats and enhanced
comfort; a markedly wider aisle for faster
boarding and easier cabin movement; and
even a hybrid layout.
The A320 Familys wide fuselage also
offers unmatched cargo capability for
operators. Its four members are the only
single-aisle aircraft ofering containerised
cargo, with the A321 capable of carrying
up to 10 standard LD3-46W containers in
the lower deck holds enabling interlining
without special ground handling
equipment. A distinct advantage in the
coming years as cargo conversion becomes
a more popular option post remarketing
and/or end of lease.
Like the A320, asset based nanciers
prefer the more range capable A321-
200 over the -100, of which only 81 were
produced. The -200 features structural
reinforcements, a higher weight schedule
and provisions for additional centre tanks.
While initially there was a structural
diference between the -100 and the -200,
it is clear that as of msn633, all -100s
are efectively low MTOW -200s and a
(paper) upgrade to -200 levels is possible.
The original -100s lacked the range for US
coast-to-coast operations. While the A321-
100hasall characteristicsofanicheaircraft,
the -200 although not as re-marketable
as the A320-200 enjoys a sizeable market
Insight
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and the largest teamof aviation
experts equipped to handle
any transaction.
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and a member firm of the KPMG
network of independent member
firms affiliated with KPMG
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kpmg.ie/aviation
A320NEO
In an industry survey of over ten thousand executives we asked a number of questions regarding the A320neo, the votes were qualified so that only those
from investors, appraisers, banks, airlines, lessors and maintenance firms remained. Here are the results:
I lhink lhis wiII Iock Airbus inlo an
inferior roducl or require a subslan-
liaI Ioss when aII-new narrowbody
roducls are announced soon afler lhe
NEO varianls begin deIiveries in lhe
2u1,-18 lime frame."
Airbus shouId conlinue lo markel lhe
exisling A32u famiIy al an allraclive"
rice."
I beIieve lhal lhis is more of a cIever
markeling Ioy inlended lo ul Boeing
under even grealer ressure al a lime
when lhey can do very IillIe lo resond.
The downside is lhal il aIso oses ur-
chasers and oeralors wilh a greal many
more variabIes lo answer wilh onIy lheo-
relicaI gains (I know lhere are guaranlees,
bul lhese don`l reaIIy heI overaII if lhe
aircrafl does nol come fuIIy u lo snu).
There are aIso an unknown number of
variabIes in lerms of inleroerabiIily,
lraining, sares, elc. Al a lime when il has
become obvious lhal lhe besl form of cosl
saving is wilhin lhe minimum number of
lyes of equimenl, I grealIy doubl lhe
overaII benel being loo greal."
The Iaunch seemed very remalure
wilh lhe Iarge backIog of A32us on order,
unIess Airbus beIieves mosl cuslomers
wiII converl lheir currenl orders. Il wiII
creale furlher segmenlalion in lhe mar-
kel lhal does nol heI vaIues - dierenl
engine lyes, Chinese A32us, Euroean
A32us and now lhe A32uneo."
The A32uneo is a good laclicaI deci-
sion for Airbus bul il does a disservice lo
lheir currenl cuslomer base by inlroduc-
ing a derivalive lhal wiII have a negalive
eecl on lhe residuaI vaIues of lhe Iasl
ve-Ius roduclion years of lhe currenl
A32u ileralion."
There wiII be an inevilabIe negalive
imacl on residuaI vaIues of exisling
A32u famiIy and aIso lo a Iesser exlenl
on ,3,NGs."
The A32uneo is good for lhe induslry.
This wiII ush Boeing inlo roducing
a carbon ber singIe aisIe aircrafl once
lheir resources aIIow causing furlher
advances."
The A32uneo is a slo ga measure
lhal doesn`l rovide lhe romised
economics lo lhe oeralor. The cosl
imrovemenl is eroded by lhe sleed
u ricing."
The A32uneo is a shorl-running
rogram in lhe resecl of new Iane
evoIulion excel Airbus wiII kee il in
roduclion even afler lhey have Iaunched
lhe nexl singIe-aisIe generalion in 2u28-
2u3u or lhe new singIe-aiseI rogram
wiII be osloned afler 2u3u. OnIy lhe
reaI big comanies may reIace lhe cur-
renl versions of A32u. A new engine is
aIways a chaIIenge and couId resuIl in a
much higher oeralionaI cosls."
Il is odd lo announce a re-engine eorl
wilhoul a naceIIe rovider."
I don`l lhink il was lhe righl decision,
I wouId have wailed for new varianl and
2u% fueI burn saving."
Yes: 43%
No: 43%
Undecided: 14%
Do you think the economics of
the A320 NEO justifies the higher
price tag?
Do you think Airbus was right in its
decision to launch the A320 NEO?
Yes: 56%
No: 36%
Undecided: 8%
The Airline Economics
A320neoSurvey
Yes: 12%
No: 10%
Undecided: 78%
If you have A320 aircraft on order
that have not yet been delivered,
will you be switching to the NEO?
A SELECTION OF COMMENTS FROM THE SURVEY
It's not just
about access to
a new airplane.
Its about a exible,
customised soluon
that gains access
to the right aircraft
to support your
fleet needs.
Its about the experse
of an integrated sta
listening to your
unique business
plan and goals
To deliver a soluon
for your growth
and success.
Talk to us.
Talk to AWAS.
Ascending.
www.awas. com
AIRBUS INTERVIEW
desire for more fuel efficiency and
lower emissions. Both of the two
engine options for the aircraft the
CFM International LEAP X engine
and Pratt & Whitneys PurePower
PW1100G engine in addition to the
Sharklet wing tip devices, contribute
to the 15% fuel burn reduction as well
as a double-digit reduction in NOx
emissions, reduced engine noise, lower
operating costs and up to 500 nautical
miles more range or two metric tonnes
T
The launch of the
A320neo has to be
considered a highlight
of the a highlight of
the past few years for
Airbus. for Airbus.
After months of speculation the
aircraft manufacturer finally took the
decision to re-engine its narrowbody
workhorse.
Launched in late 2010, the A320neo
was a direct response to the airlines
"whan Wa saa a brand naW
ang|na IhaI prasanIs a 16%
|mprovad Iua| burn Wa Ia|a
noI|ca buI Whan Wa gaI IWo
brand naW ang|nas W|Ih a 16%
|mprovamanI |n Iua| burn IhaI
sar|ous|y gaIs avaryona`s
aIIanI|on"
The A320 New
Engine Option
Alan Pardoe, marketing communications
director at Airbus spoke to Airline Economics
about why the A320neo is a good bet.
AIRBUS INTERVIEW
two brand new engines with a 15%
improvement in fuel burn that seriously
gets everyones attention, he says. As
fuel costs continue to go up, it is a very
straight-forward decision to take to
re-engine an existing aircraft.
There have been some doubts
over whether Airbus and the engine
manufacturers will be able to deliver
on the promised 15% increase in fuel
burn efficiency for the A320neo-family
aircraft. Taking into account the
more payload, according to the Airbus
literature.
In response to some of the more
harsh criticism that the manufacturer
couldnt afford the R&D spend to
develop an all-new A320 replacement,
Pardoe says that the re-engine route
makes the most economic sense for
airlines.
When we see a brand new engine
that presents a 15% improved fuel
burn we take notice but when we get
"Tha 8har||aIs on Iha a|rcraII
a|ong W|Ih Iha naW ang|nas on
Iha W|ng, |ass Iha |ncramanIa|
Wa|ghI oI Iha haav|ar ang|nas
g|va a 16% naI banaI|I |n Iarms
oI Iua| burn."
increased weight of both new engines
and the airframe, the efficiency of
the new Sharklet wing tips, some
AIRBUS INTERVIEW
companies as the benchmark or bell
weather of the aviation industry. We
always look to the lessors to get the seal
of approval for an aircraft program, he
says. The 100 aircraft order for A320
and A320neo from ILFC was a strong
seal of approval. Lessors dont buy
aircraft if they have doubts. However,
he is keen to stress that the A380 is
probably too big for most lessors to
handle.
Airbus is not fazed by the new
competition entering the narrowbody
market from Bombardiers CSeries
or the new offering from Chinese
manufacturer COMACs C919.
We all serve the same marketplace
and have the same broad understanding
of the market needs, says Pardoe, it
is just our interpretation that differs.
Clearly Bombardier has decided that
the market needs more 110-130 seat
aircraft. But our research has shown
that although airlines want more
fuel efficient aircraft, they also want
larger aircraft and more widespread
aircraft family types. The A320 sits
nicely in that space. The sales figures
for the CSeries speak for themselves.
They have sold less than 100 aircraft,
while Neo sales and commitments are
heading for 500.
He adds: Meanwhile, the COMAC
C919 aircraft is a little further out
and could become a competitor.
That aircraft is arguably the best
that Chinese manufacturers have
launched. We innovate all of the time.
We spend $100 million each year on
regular R&D for the A320, not including
Pardoe says, It doesnt make economic
sense to develop an all-new aircraft
every ten years because fuel prices
increase that has to be tempered
against the cost of development.
The A320neo progam has cost just
over $1 billion but we expect to sell
thousands of Neos. An all new aircraft
launch would have cost ten times that
amount it would be a brave board that
approved that decision.
In the meantime, for Airbus the
launch of the A320neo has not affected
orders of the standard A320-type
aircraft that, like Boeings 737NG,
remains sold out for the next five years.
The challenge we have is clearing
the backlog of well over 2,000 existing
orders for the A320, says Pardoe. At
current production rates, that takes us
up to 2015-16 when the Neo becomes
available. The challenge for us is to
find production slots for new airline
orders of the A320 as airlines will not
want to miss out on five years of profits
waiting for a new aircraft to arrive.
They would rather opt for the standard
type to get flying more quickly. In short,
we continue to see strong sales of both
aircraft types.
Pardoe regards aircraft leasing
estimates have suggested the amount
saved will be much lower, in single
digits. However Pardoe confidently
states that the 15% stated reduction
in fuel burn is a net benefit of all those
factors. The improved fuel burn of the
new engines before they are installed
on the airplane is higher than 15%.
The Sharklets on the aircraft along
with the new engines on the wing, less
the incremental weight of the heavier
engines give a 15% net benefit in terms
of fuel burn.
There have been some doubts
over whether Airbus and the engine
manufacturers will be able to deliver
on the promised 15% increase in fuel
burn efficiency for the A320neo-family
aircraft. Taking into account the
increased weight of both new engines
and the airframe, the efficiency of the
new Sharklet wing tips, some estimates
have suggested the amount saved
will be much lower, in single digits.
However Pardoe confidently states
that the 15% stated reduction in fuel
burn is a net benefit of all those factors.
The 15% fuel improvement is 15% net
benefit of engines on the airframe, he
says. The improved fuel burn of the
new engines before they are installed
on the airplane is higher than 15%.
The Sharklets on the aircraft along
with the new engines on the wing, less
the incremental weight of the heavier
engines give a 15% net benefit in terms
of fuel burn.
As fuel prices continue to rise
and airlines struggle to operate in
challenging economic conditions, the
decision to launch a re-engined version
of the A320 was an easy one for Airbus.
ORDER HISTORY
1971 First order (6 A300)
1989 1,000th aircraft sold
Orders by region
Leasing: 24%
Middle East: 7%
North America: 14%
Rest of World: 15%
Asia-Pacific: 25%
Europe: 15%
"Tha 100 a|rcraII ordar Ior
A320 and A320nao Irom ILF0
Was a sIrong saa| oI approva|.
Lassors don`I buy a|rcraII |I
Ihay hava doubIs."
AIRBUS INTERVIEW
modest but growing demand for the
A330-200F.
The A330 production rate is also
being increased from eight aircraft per
month to nine and to 10 by 2013.
For the immediate future, Airbus
is intending to deliver on its promises
with the A350 XWB and continue to
win orders for the A320neo, A330 and
"wa hava craaIad an axc|I|ng
p|aIIorm and Wa W||| ba
aIIracIad Io oIhar |||a m|ndad
carr|ars IhaI ba||ava |n
conso||daI|on"
the Neo program. We are confident in
our ability to innovate enough to stay
ahead of our competitors.
The latest innovation has been the
A350 XWB project to compete with
Boeings 787 Dreamliner. Pardoe is
confident the first deliveries will be
made in 2013. The A350 XWB program
is only a few months adrift of where we
said it would be four or five years ago,
he says. Some industry observers
seem to want it to be late but we are
on target to make the final assembly of
the first aircraft at the end of 2011 and
the first flight next year for deliveries
to begin in the second quarter of 2013.
In the interim between making
headlines with the Neo and its
superjumbos, Airbus workhorse the
A330 family has been quietly satisfying
customers across the world, but
specifically in Asia.
Korean Airlines has placed a firm
order for five more A330-200s, says
Pardoe. The airline, like many others,
took a number of the aircraft type
years before and was very happy with
its performance and so came back for
more. Cathay Pacific has ordered 15
more A330-300s because it works so
well for them. It does an honest job and
continues to hold favour with many
airlines and we dont expect that to
change any time soon. There is also
AIRBUS 2010 HIGHLIGHTS
Airbus key facts
Headquarters: Toulouse, France
Shareholder: 100% EADS company
Employees: 52,500 around the world
Subsidiaries: United States, China, Japan and Middle East
Spare parts centres: Hamburg, Frankfurt, Washington, Beijing and Singapore
Training centres: Toulouse, Miami, Hamburg and Beijing
Field service ofces: More than 150 around the world
Supplier network: Some 1,800 suppliers in 30 countries
Industrial sites: 15 sites in France, Germany, Spain and the UK
Final Assembly Lines: Toulouse, Hamburg and Tianjin
Engineering Centers: 11 throughout Europe, US, China, India and Russia
2010 Financial results
Revenue: 29.9 billion (+7% compared to 2009)
R&D self fnanced: 2.3 billion (7.7% of revenue)
Capitalised R&D: 31 million in FY 2010 and 15 million in FY 2009
EBIT: 305 million (Pre-goodwill impairment and exceptionals)
the A380 as the industry continues to
grow strongly and robustly. Pardoe is
reluctant to look much further into the
future but is adamant on one thing in
particular: In my view, there will be no
return to supersonic travel for anybody
unless somebody develops a miracle
engine and there is no evidence that is
about to happen.
A320NEO
C
FM International has
launched into service this
year the CFM56-7BE Evo-
lution, which will give
carriers around a 1% slightly
better fuel burn. When this is added to
the aerodynamic improvements on the
737NGs the manufacturers reckon the air-
craft will use 2% less fuel. However, when
the A320neo comes into service analysts
have calculated that the 737-800 will be
at a 3%-4% DOC disadvantage. The gap,
says Boeingwill needtocomefrom further
engine improvements. The CFM Leap X
engine was launched to be used on Comacs
C919 aircraft and now for the A320neo.
The engine maker assures operators that
the maintenance costs will be the same for
the Leap X as for the CFM56.
Pratt & Whitneys PW1000G has been
earmarked for use on four aircraft: the
Mitsubishi MRJ, the Bomardier CSeries,
the Irkut MS-21 and now the A320neo.
Although Boeing has stated it is a fan of
the engine, it is restricted by its exclusiv-
ity contract with CFM for any re-engined
737 aircraft type. However an all-new air-
craft would not be similarly restricted and
so could in theory carry the P&W ofering.
But which engine should A320neo
customers opt for? CFM has a long his-
tory and loyal customer base and its
reliability means low maintenance costs.
As a geared engine, the long-term
maintenance costs and reliability of the
PW1000G over the Leap X are being ques-
tioned by many despite P&Ws claims it
will lower maintenance costs by 20%.
CFM was probably ahead in the
order stakes as the safer engine choice
before ILFC opted for the Pratt & Whit-
ney PW1100G for at least 60 of its
100-strong order for the neo type aircraft.
However, because most of the market the
A320neo is aimed at includes airlines that
already operate CFM56 engines and have
maintenance contracts in place for the
same, which will be favourably extended
for Leap X customers, CFM should not be
unduly worried that ILFC has opted for
P&W. AirAsiais expectedtoleantowards
CFM, if it opts for the P&W engine that
will be a real eye opener. P&W is ofering
a totally new engine; it cannot ofer many
assurances until testing has been com-
pleted and the engine is in service.
GTFtechnology is lookinglike the bet-
ter option, and an option that CFM could
have gone for. Instead, CFM choose to use
existing technology to create a derivative
engine that is in essence a scaled down
version of the GEnX, which is already
in ight test operations on the wing of
the 787 and 747-8. Airline Economics
believes this could be a mistake.
The argument thus far has come down
to reliability. CFM has successfully put this
factor into the spotlight, but if P&W can
answer the reliability question(s) posed, it
could have the edge on its competitor.
For many, the PW1000G engine range
has the edge in both performance and in
forecast maintenance costs. Some third
party maintenance providers, of the record
at least, are absolute in their support for the
engine range and say it is the option that
airlines and lessors should move forward
with. Other analysts have suggested that
some lessors that buy the A320neo could
hedge their bets with the Leap X and half
with the PW1000G range. ILFC still has
40 aircraft without an engine choice at the
time Airline Economics went to press so
this could prove to be correct.
The PW1000G range put simply
is not an updated engine; it is a new
design for a new era. This should show
The next step
After the aircraft order comes the engine order: So which engine should you buy? The
PW1000G Vs CFMi Leap X
A320NEO
"whaIhar 8oa|ng dac|das Io
ra-ang|na Iha 737 or |aunch a
naW rap|acamanI a|rp|ana, Iha
LEAP-X W||| ba Iha ang|na 0FN
oIIars." 0FN InIarnaI|ona|
through in the long term and lead to
improved residual values for A320neo
owners that choose the PW1000G over
the CFM Leap X. Many have argued
that reliability is the key driver that
should lead people to opt for the CFM
engine, however the results from the
PW1000G testing program so far conrm
that this engine type is far better than any-
one could have hoped and thus to question
reliability at this point is unwarranted.
The PW1000G range is also avail-
able for so many new next-generation
aircraft that the type will have critical
mass within many eets of the future,
especially within North America,
before 2025. This makes the PW1000G
a real winner for Pratt & Whitney but
moreover it will mean that airlines
across the globe will have options for
improved synergies across a range of air-
craft from diferent manufacturers. CFM
can lay claim to having the synergy advan-
tage at the moment, which is a valid point.
But with the A320neo being viewed as a
stopgap aircraft with a shortened lifespan,
is it also true that the CFMLeap Xengine
has a shortened life too, or is this engine a
templateforotherfutureaircraftoferings?
CFMconrms the Leap X was a commit-
ted program when it was selected for the
Comac C919, which has an anticipated
market in excess of 2,000 airplanes. Being
selected for the A320neo has solidied
their business case for the engine. Whether
Boeing decides to re-engine the 737 or
launch a new replacement airplane, the
Leap X will be the engine CFM ofers. The
Leap Xengine incorporates cutting-edge
technology that is laying the foundation
for the next 30 years, and the Leap X core
could potentially be used in an open rotor
engine in the 2030 timeframe but with
the EU this month telling governments
that they may ne airlines that out noise
restrictions the going for open rotor design
does not look smooth.
To date, Pratt & Whitney holds rm
commitments to supply GTF engines for 60
of ILFCs A320neo order, and also for the
Bombardier CSeries (24,000 lb. thrust),
Mitsubishi MRJ (17,000 lb. thrust) and
Russian MC-21 (30,000 lb. thrust). Both
Boeing and Airbus engineers have been
impressed by the test results thus far.
P&W expect a 16% fuel burn advan-
tage for the 30,000-lb.-thrust engine on
the A320neo after including efects of
drag and weight caused by the larger fan.
Noise is expected to be 20 dB better than
Stage 4, mainly due to the fan blade tips
remaining subsonic in a geared engine.
Long term, P&W believes that it can
reduce fuel burn by 25% by introducing
new materials, going to higher tempera-
tures and taking the gear ratio above
4:1. Given these statements it is clear
that P&W has a long-term vision for the
engine. Maybe CFM would have been
better off bringing a completely new
engine to market? Airbus ensured that
the PW1000G was on the A320neo as a
hedge against the Bombardier CSeries,
although the Aircraft Economics team
cannot help but feel upset for all those
airlines and lessors out there with A320s
being delivered that are now worth that
little less but Airbus was right inits think-
ing that something had to be done now.
A320NEO
In an industry survey of over ten thousand
executives Airline Economics asked a num-
ber of questions regarding the engine choices
for the A320neo.
The votes were qualified so that only inves-
tors, appraisers, banks, airlines, lessors and
maintenance firms remained.
Everyone who voted left a comment. It is very
interesting to note that all comments for votes
coming in support of CFM were backward look-
ing, while all votes for Pratt & Whitney were
forward looking.
The majority of MRO firms supported the CFM
Leap X, with many stating that the CFM engine is
easier to work on and the company has a better
track record and better after sales support. How-
ever many also said that CFM should develop a
new engine and not rehash an existing model.
Many comments in Pratt & Whitneys favour
stated that the GTF is a far better option and
testing has shown this to be the case. On the
down side however, many people, even those
who voted for the PW1000G as their preferred
engine choice, who stated that the manu-
facturer has a poor track record of bringing
new engines to market and the variables
for the GTF technology are off putting, espe-
cially reliability.
Demographic vote split by company type in final vote
Airline Lessor Appraiser MRO Financial
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Undecided CFM Leap X PW1000G
PW1000G: 51%
CFM Leap X: 48%
Undecided: 1%
A320 Neo Engine choice results
(percentage)
The Airline Economics
A320neoEngine Survey
So here it is:
Aircraft Economics puts its stake in the
sand and in this battle conrms that
basedonall facts tohandthePW1000Gis
the better choice for the A320neo at this
time. For airlines ordering this aircraft
type, an engine deal, based on the current
projections being met, made with P&W
during the st half of 2011, will leave you
secure in the knowledge that you have
made the right choice. It is round one
to P&W. While there has been concerns
about the reliability of the geared turbo
fan (GTF), P&Ws testing work appears
to have reduced those concerns signi-
100%
80%
60%
40%
20%
0%
APAC Americas Europe Middle East/Africa
Undecided CFM Leap X PW1000G
Regional split as percentage of total vote cast
cantly. The simplicity of the GTF with
only seven moving parts that are not life-
limited is also a factor to note.
Of course this is a battle that is not yet
fully joined as the engines in question are
under testing and development but order-
ing early means heavy discounts and again
it is the PW1000G that gives solid cause for
cheer and therefore it is that team which
has the edge in a battle that they may just
win and in the process drive P&W back to
the very top in the global aero engine mar-
ket. CFM with their Leap X will be looking
to the C919 to provide such price savings
over western manufacturers that they will
A320NEO
the A320neo, will be able to achieve
improved prices for these new prod-
ucts. The 737NG proved that that a new
aircraft, although far superior, does not
guarantee the market will fork out the
extra cash. Airbus, CFM and P&W will
be hoping that the market is ready. 2011
will tell if the A320neo is the must have
stopgap aircraft with the shortest lifes-
pan of all time. n
have an unbeatable combination in their
partnership with the Chinese come 2018.
CFM, when asked if the Leap X would be
used on any 737 replacement or if a whole
new engine will be designed, gave the clear
answer that the Leap X would be ofered
for a 737 replacement and a new engine
will not be designed.
It remains to be seen if the manufac-
turers of both engine types, and indeed
A SELECTION OF COMMENTS FROMTHE VOTE:
Pratt & Whitney 1000G Geared fan should produce better overall component efciency (low speed fan, high speed
turbine) than Leap-X changes
Pratt & Whitney 1000G Overall better technical platform with more headroom for efciency growth.
CFM Leap-X Pratt & Whitney 1000G Both are equally good
CFM Leap-X Quality, reliability
Pratt & Whitney 1000G Newer technological baseline most likely presents the best option for future efciency improve-
ments.
CFM Leap-X Development of existing CFN56 engine (CFM56-5B6...)
CFM Leap-X More proven technology. The GTF is brand new, unproven in service
Pratt & Whitney 1000G Better reputation
CFM Leap-X High risk of maintenance cost of PW1000G gear. Poor experience of bringing new engines to
market - PW6000.
CFM Leap-X Track record of performance, reliability and meeting commitments all favor CFM.
CFM Leap-X CFM RELIABILITY
Pratt & Whitney 1000G Lower fuel burn & maintenance costs
Pratt & Whitney 1000G Newer technology
Pratt & Whitney 1000G The gearing of the fan allows more optimal rotational speeds for diferent engine sections there-
fore increasing efciency. Gearbox should not give operational issues.
Pratt & Whitney 1000G The P&W engine looks to have better economics
Pratt & Whitney 1000G Theoretically the Geared Fan can provide a better fuel consumption therefore it seems to be a
bit more economical and cleaner.
Pratt & Whitney 1000G It actually exists while the GE/CFM engine is only a concept in beat testing.
CFM Leap-X GTF is unproven technology
CFM Leap-X GEs track record on delivering performance is far superior to PW
CFM Leap-X Higher industrial reliability
CFM Leap-X CFMs design direction seems to have a better chance of achieving the results.
CFM Leap-X Commonality with existing choices
Pratt & Whitney 1000G More mature and efcient
Pratt & Whitney 1000G PW1000G is a comprehensive solution that provides improved fuel burn, reduced noise and
emissions lowering cost of ownership to the airline customer. Validated by demonstrator and
engine core test programs, the PW1000G engine is running validation and certifcation tests
now and will have over a million hours of service on the MRJ and CSeries applications before the
A320neo enters service .... providing the lowest risk engine choice.
CFM Leap-X Because of the success the CFM56-5B has had on this airframe
CFM Leap-X Commonality and development history
Pratt & Whitney 1000G I think it is too early to know which will prove superior in service. Pratt has better claims now.
wh||a Ihara has baan concarns abouI Iha ra||ab|||Iy oI Iha
gaarad Iurbo Ian (TF), P&w`s IasI|ng Wor| appaars Io hava
raducad Ihosa concarns s|gn|I|canI|y.
A320NEO
Materials:
Fan: composite. 3-D woven, resin
transfer molding (RTM) to be exact.
We have been running a demonstrator
engine for about two years (a LEAP-X
fan mounted to the front of a -5C engine
called MASCOT) anddone cross wind,
acoustics, and performance testing.
CFM has also completed blade out
and bird ingestion rig tests that mir-
ror certication requirements and are
really happy with the results. The fan
demo engine is currently undergoing a
5,000-cycle endurance test.
0omprassor: Third-generation 3-D aero
designs.
Turb|na: the HPT will use the same
materials and have the same temper-
ature profile as the current CFM56
product line, but CFM is using new
coatings and advanced cooling tech-
nology to allow the core to operate at
much higher temperatures. It is also
testing composite matrix ceramic
HPT turbine shrouds, which have
been used in military engines for
quite some time.
Lasl year, CIM comIeled lesling on
eCore Demonstrator 1, which was a sin-
gle-stage turbine core that let it test blade
aerodynamics in the compressor and the
interaction between the combustor and
the HPT, among other things.
CIM is currenlIy buiIding u eCore
Demo 2 and plan to be on test by mid-
year. This particular core is very close
to the nal LEAP-X conguration (10-
stage compressor, two-stage turbine).
CIM has a lhird core in lhe lesl Ian
that will run in 2012, and that test will
be used to tweak anything that needs
more work before they take the rst full
engine to test in early 2013. CFM will
ight test on its own ying testbed in
2014 before it begins ight testing with
the airframers.
CIM is on largel lo achieve engine
design freeze by year-end 2011. n
CFM LEAP X engine development pro-
gram update:
Performance: u lo 1% Iower fueI
consumption vs. todays best CFM56
(Tech Insertion)
Emissions: NOx emissions reduced
by 50% compared to current CAEP/6
requirements
Noise: 1u - 1% beIow Chaler 4 regu-
lations (depending on the application)
Mainlenance cosls: comarabIe lo
todays CFM56
ReIiabiIily: same as loday`s CIM6 famiIy
Thrusl range: same as lhe currenl
CFM56 product line - roughly between
20,000 and 30,000 pounds
AIicalions: COMAC C1 (soIe wesl-
ern powerplant) ; Airbus A320neo.
Both are scheduled for commercial
service in 2016.
Ian diameler: aroximaleIy ,-inches,
depending on the application
By way of comarison: LEAP-X has
18 blades vs. 24 on the CFM56-7B; the
CFM56-5C for the Airbus A340-200/-
300, which is roughly the same size fan,
has 36 blades
Byass ralio: 1u:1 cIass vs. loday`s :1
OveraII ressure ralio: grealer lhan
20:1 (at levels comparable to the GE90
and the GEnx)
Comressor: 1u slages
Combuslor: Twin-AnnuIar, Pre-SwirI
(TAPS) 2
HPT: lwo slages vs. currenl singIe- slage
LPT: CIM have nol made lhis number
public
A|r||na Econom|cs: Why should a customer
choose the CFM ofering over the P&W
engine?
0FN InIarnaI|ona|: When airlines choose
CFM, they are choosing the company that
has produced the most reliable engine
family in the history of the single-aisle
market. Beyond the hardware, though,
they are choosing the company with a
reputation for under committing and
over delivering; we simply dont make
promises we cant keep.
Leap X will benefit from more than
520 million flight hours of CFM56
experience and from the lessons
learned from supporting the industrys
largest commercial fleet a fleet that
averages a departure every 2.5 sec-
onds. CFM customers log an average
of eight cycles a day, and many of them
have turn times of 30 minutes or less.
A lot of airline business models simply
wouldnt work without the inherent
reliability CFM56 engines provide. We
understand that, and thats why every
technology decision we have made
on Leap X first went through a filter
of how it could impact reliability and
maintenance costs.
As a result, we have an engine that
represents a quantum leap in fuel con-
sumption and environmental impact, yet
still maintains the reliability and main-
tenance cost levels our customers have
come to rely on. We expect the Leap X
to deliver the best performance and reli-
ability for the A320neo.
CFM: The company line
A320NEO
that a programs rst engine to test
typically runs approximately 75 hours.
They are at 175 hours and plan to
accumulate over 200 hours before con-
cluding the initial test program on this
rst engine.
Tesling on lhis rsl engine conrmed
the results of P&Ws GTF Demon-
strator Program, which ran in 2008,
and more importantly conrmed the
technology readiness of the Geared
Turbofan design.
The rsl lwo PurePower deveIomenl
engines for the Mitsubishi Regional
Jet are undergoing assembly. Engine
testing will initiate early this year with
engine certication in 2012. (The rst
engine will go to test in March.)
Core lesling was comIeled in 2u1u
with more than 260 hours of testing.
Results validated performance goals. n
A|r||na Econom|cs: Why should a customer
choose the P&W ofering over the CFM
engine?
PraII & wh|Inay: Airlines flying the
PW1100G powered A320neo can expect
20% cash operating cost benets at the
engine level compared to todays engines.
This is achieved through reduced fuel and
maintenance costs as well as lower envi-
ronmental fees with signicantly reduced
noise and emissions.
The geared architecture gives the
PW1000G a fundamental advantage in
fuel burn, environmental performance
and operating cost. We estimate this
benet translates into potentially $3M
per aircraft relative to competing prod-
ucts and $1.5 million per aircraft per year
compared to todays engines.
We expect the PurePower engine fam-
ily will accumulate more than one million
hours of revenue service performance
prior to entry into service with the Airbus
A320neo.
Less parts = less cost: When you
compare a typical conventional two spool
turbofan and the PW1000G geared tur-
bofan engine, there are up to seven more
stages of life-limited parts (LLPs) in a
conventional architecture as compared to
the GTF that means the GTF has 20%
less life limited parts than the competi-
tion. The nal conguration of the GTF
will have a third fewer blades and vanes
than current CFM56 engines and poten-
tially around half that of the Leap X.
Pratt & Whitney PW1000G engine devel-
opment program update:
The Iirsl Engine lo Tesl for lhe CSeries
is currently at P&Ws West Palm Beach
facility and has completed more than
175 hours of testing since its test pro-
gram began in Sept. 2010:
P&W has veried overaII engine char-
acteristics with the game-changing
Geared Turbofan technologies, and
has conrmed the projected fuel con-
sumption efciency of the PurePower
PW1000G engine family.
To date, the test program included:
A fuII slrucluraI evaIualion of lhe
engine up to rotor speeds 5% above the
red line speed of the low spool turbine
and fan drive gear system to clear certi-
cation requirements
Noise and emissions lesling as weII as
verication of the engine fuel and lubri-
cation systems
WhiIe lhe engine, as lesled, does nol
have the production nacelle with all
the nacelle acoustic treatment, we con-
rmed the overall engine design will
achieve 50% noise reduction compared
to todays engines.
IniliaI emissions lesling aIso conrmed
the planned reductions in nitrogen
oxide and carbon dioxide.
The engine conlinues lo exceed P&W`s
initial expectations with testing of
the rst engine planned to continue
through March.
P&W`s Iegacy rogram exerience is
P&W: The company line
A320NEO ENGINE SELECTION
T
he 2011 Paris Air Show saw
a torrent of orders for the
Airbus A320 new engine
option (A320neo) with 380
firm and 284 option aircraft
booked. But for each air-
craft order announced there was also
good news in the engine manufacturers
chalets, with engine selections being con-
firmed at the same time. Under normal
circumstances there would be nothing
unusual in that. However, the A320neo
offers a choice of two significantly dif-
ferent engines, engines that might well
change the aviation landscape in the
years to come. What are these engines?
How are they different and why are they
potentially so important?
To begin our analysis, a bit of basic
physics. Newtons second law of motion
explains that the force acting on a body
is equal to the mass of the body multi-
plied by the acceleration imparted on
that body, and this is a fundamental of
jet propulsion. Military engines gener-
ate thrust by accelerating a mass of air
rearwards at very high velocities. Com-
mercial engines generate thrust by
accelerating a significantly larger mass
of air rearwards at a relatively slower
velocity. The part of the engine responsi-
ble for producing this accelerating force
thrust is thefanthat generates around
75% of the engines thrust, the remainder
coming from the exhaust jet. The ratio of
the amount of air that passes through
the fan compared with the amount of
air passing through the central part
of the engine the core is called the
bypass ratio (BPR) and most commer-
cial engines today are considered to be
high bypass ratio engines, with BPRs in
the order of 5 or 6 to 1.
Over the years commercial engine
manufacturers have faced challenges
to improve their products in response
to the demands of their airline custom-
ers. The biggest challenges they have
A question of confidence
David Cook pulled engines out of fighter jets in his RAF days and sold engines to airlines
when he worked for a major engine manufacturer. Now as president of independent ASM
Consulting he offers his views on the new engines being offered for the A320neo.
aircraft, as will the increased surface area
of the nacelle surrounding the engine.
While such things can be estimated
using the sophisticated modelling tools
available to the design engineer today,
the net benefit brought by these new
engines will only be realised once they
have flown on the airframe and their per-
formance has been measured in flight.
But to understand these engines
better, lets lift the hood on the Pratt &
Whitney (P&W) Purepower PW1100G
and the CFM International Leap-X
engines to figure out how they work and
what is so different about them, starting
first with the PW1100G. Note that neither
of these engines exists yet and so these
virtual guided tours are based on infor-
mation already in the public domain as
well as individual briefings given to me
by the respective engine manufacturers.
Approaching the PW1100G from the
front, the 81 diameter fan is impressive
but what is most noticeable is just how
much daylight we can see through the fan
blades, dramatically illustrating the 12:1
bypass ratio. The blades are wide-chord,
metallic and, while P&W remains coy
about their actual structure, I would imag-
ine they are similar to the hollow titanium
blades found on the V2500 family. This is
in itself a surprise as most engine manu-
facturers are turning to carbon composite
for their fan blades. Evidently P&W hopes
to demonstrate good damage tolerance
and performance while designing a fan
that is still light enough to allow the use
of a carbon composite fan case capable
of withstanding a blade failure scenario.
Opening up the casings displays
a three-stage low-pressure compres-
sor and short, compact eight-stage
high-pressure compressor. Each high-
pressure compressor stage is a blisk,
where the compressor blades are an
a major issue, the debate regarding cli-
mate change has increased attention on
fuel burn, not just from the point of view
of airline economics but also in terms of
the sustainability of oil reserves and the
generation of greenhouse gases such
as carbon dioxide. A step change in
fuel consumption was required from the
engine designers, large enough to sat-
isfy the operators but also large enough
to justify launching a new aircraft or re-
engining existing aircraft families.
Aircraft engine design is a fine bal-
ance of compromises. The engine
must be safe, reliable and efficient, at
ground level as well as at altitude, in
fine weather or foul, and produce low
levels of noise and harmful emissions
while costing nothing to maintain. In
general terms (and my engine designer
friends will be quick to point out this is
a very broad statement) the simplest
way to improve the fuel consumption
of a high BPR engine is to increase the
BPR even more and make better use
of the air that flows through the core to
generate the mechanical power neces-
sary to turn a larger fan producing more
thrust. The two engines offered on the
A320neo have much higher BPRs than
their current equivalent engines, and
are elegant examples of how the various
design compromises can be resolved to
achieve similar results while using two
radically different concepts.
The engines proposed for the
A320neo have fan diameters consider-
ably larger than the current A320 family
engines, and this shows there are also
considerations with regards to the
engines installation on the aircraft. Its
all very well for the engine designer to
improve fuel burn by increasing BPR, but
the increased frontal area of the larger
fanwill impose anincreaseindrag on the
faced in recent years have been to
reduce fuel consumption while also
reducing engine noise. The high bypass
ratio engine responded well to this chal-
lenge: the slower fan airflow reduced
noise while improved engine thermo-
dynamics associated with the high BPR
concept have contributed to an average
improvement in fuel consumption of 1%
per year over the past 50 years. How-
ever, in more recent times the industry
focus has changed. While noise is still
A320 ENGINE CHARACTERISTICS
Current Airbus family Airbus Neo family
Engine manufacturer IAE CFM P&W CFM
Aircraft model A319 A320 A321 A319 A320 A321 A319 A320 A321 A319 A320 A321
Engine model V2500-A5 Series CFM56-5B Series PW1100G Series CFM Leap-X Series
Thrust range 22,000 to 33,000 lbs 22,000 to 33,000 lbs 23,500 to 32,100 lbs 22,000 to 33,000 lbs?
Fan diameter 63,5 68,3 81 78
BPR 4.9 4.8 4.5 6 5.7 5.5 12 10+
Cruise sfc (lbs/lb/hr) 0.543 0.545 V2500-A5 minus 15% CFM56-5B minus 16%
Noise (epndB margin to stage 4) 19-20 19-20 15-16 16-21 14-17 8-16 Stage 4 minus 16dB Stage 4 minus 10-15dB
Nox (margin to CAEP 6 limits) 8% 7% 1% 32% 28% 20% CAEP 6 minus 50% CAEP 6 minus 50%
gearbox is not expected to be a source
of problems for the airlines.
Turning now to the CFM Leap-X
engine. The fan diameter is slightly
smaller than the PW1100G, 78, and
the wide-chord fan blades are black,
suggesting they are made from carbon
fibre. The Leap-X fan blade is a very
sophisticated design, using the latest in
composite materials technology to pro-
duce a blade that is both light, strong and
damage-tolerant. While the three-dimen-
sional weave structure of the blade fibres
is hidden beneath an aerodynamically
smooth coating, the same weave pattern
of interlocking strands is clear to see in
the structure of the fan casing, giving the
engine a modern, jazzy look.
Viewed from the side, the engine gives
the impression it is noticeably longer than
the PW1100G and, on opening the cas-
ings, it is clear why. Behind the fan is a
three-stage low-pressure compressor
followed by a 10-stage high-pressure
compressor, the first nine stages of which
are blisks. The combustor is an updated
TAPS low-emissions design, offering
NOx levels 50% below CAEP 6. However,
it is in the turbines that the real difference
between the Leap-X concept and its
predecessors in the CFM stable can be
found. There are two stages of high-pres-
sure turbine rather than a single stage in
the CFM56-5B and seven stages of low-
pressure turbine rather than four. The
original CFM56 design was optimised
towards low maintenance costs, hence
nine stages of high-pressure compressor
and a single-stage high-pressure turbine.
To achieve the levels of fuel economy
demanded by the market today, consid-
erably more attention has been focused
the gearbox is rather large and heavy,
but P&W would argue the weight pen-
alty of the gearbox is offset by the use of
ashorter, lightweight, high-speedengine
core. Some might also question the effect
of sucha key component on the engines
reliability and cost of maintenance. P&W
would respond by pointing out there
are no expensive life-limited parts in the
gearbox, that the shorter core has fewer
rotating parts and aerofoils, and that the
concept has been extensively tested to
demonstrate its reliability.
Although the Purepower series of
engines has been described as being
a new engine concept, there is in fact
nothing new about geared turbofans.
Both the Garrett TFE731 and the Lycom-
ing ALF 502 engines use gearboxes and
have clocked up many hours of business
jet and airline operation. While these
engines have had reliability issues, few
of the known problems have been asso-
ciated with the gearbox. Although the
engineindustry pretty much turnedaway
from geared fan technology back in the
1980s, P&W has been quietly working
away, refining the concept through more
than 30 years of testing and develop-
ment. The proof will, of course, come
once the engine enters service but the
integral part of the disk. The combustion
chamber looks familiar, a trademark P&W
Talon design but using state-of-the-
art technology to obtain NOx emission
levels 50% below the latest Committee
on Aviation Environmental Protection
(CAEP) 6 standards. Behindthe combus-
tor is a two-stage high-pressure turbine
driving the high-pressure compressor
and a three-stage low-pressure turbine
using what looks like rather conven-
tional materials. So far so good a short,
simple engine using recognisable tech-
nology with low parts count contributing
to low maintenance costs. But going
back to the front of the engine, there is
a large steel casing sitting between the
fan and the low-pressure turbine shaft.
It is a planetary gearbox, transmitting
power from the low-pressure drive shaft
to the fan via a number of smaller planet
gears, and it is this unit that makes the
Purepower series of engines so different.
As previously mentioned, there is
a need to increase BPR while improv-
ing core efficiency. As fans get larger
they must rotate more slowly, to avoid
the blade tips going supersonic, but
to improve core efficiency one would
normally look to increase combustion
temperatures and have the turbines
spinning faster a classic engine design
conundrum. The Purepower engines are
what are called geared turbofan (GTF)
engines: instead of the low-pressure
turbine driving the fan directly through
the low-pressure shaft, the fan is driven
through a gearbox, thus allowing both
the low-pressure turbine and the fan to
rotate at their most optimal speeds. The
use of a gearbox does, however, bring
with it some issues. As a component,
"Tha PurapoWar ang|nas
ara WhaI ara ca||ad gaarad
IurboIan ang|nas: |nsIaad
oI Iha |oW-prassura Iurb|na
dr|v|ng Iha Ian d|racI|y Ihrough
Iha |oW-prassura shaII, Iha Ian
|s dr|van Ihrough a gaarbox"
ENGINE DEVELOPMENT PROGRAMME TIMELINES
Programme 2010 2011 2012 2013 2014 2015 2016
Bombardier C Series /
PW1500G Series
FETT Flight test Certifcation EIS
Mitsubishi Regional Jet /
PW1200G Series
FETT Certifcation? EIS
Airbus NEO /
PW1100G Series
EIS?
COMAC C919 /
Leap-X1C Series
EIS?
Airbus NEO /
CFM Leap-X Series
EIS?
FETT = First engine to test EIS = Entry into Service
P&W would now have customers believe
the engine is stuffed full of new technol-
ogy. Conversely, it was initially believed
the Leap-X engine was to be a jewel of
all the latest technology available to the
industry today, but CFM now insists it
is not such a leap (no pun intended) in
the dark and that all the new technology
incorporated into the engine has been
tested and proven to bring measurable
benefit. What is clear is that all this new
technology, whether from P&W or CFM,
has a price. It has long been a tradition in
the engine industry that engines are sold
by thrust, not hardware, which is why a
customer would pay significantly more for
a high-thrust engine on an A321 than for
a lower-thrust model, built using exactly
the same hardware, on an A319. Analysis
of recent media reports suggests airlines
are going to be paying more than $1 mil-
lion an engine extra, in terms of list price,
for these newmodels compared with the
previous models at equivalent thrusts.
So, which engine do you choose for
your brand new A320neo? So far this
article has focused on the technical
characteristics of the engines and, if you
were a technical vice-president of an
airline there would be plenty for you to
discuss and debate. However, readers
from a financial background might be
more interested in analysing these two
engines from a risk perspective.
While these two engines are often
described as being new engines, there
is, in reality, no such thing. All engines
on the aerodynamic efficiency of the
core, hence the additional high-pressure
turbine stages in the Leap-X. Similarly,
to drive the fan slowly, at optimum effi-
ciency, three additional stages have
been added to the Leap-Xs low-pressure
turbinetosqueezethelast dropof energy
out of the exhaust gases. One final point
for the more discerning the N4 bear-
ing, the Achilles heel of previous CFM56
models, has been redesigned, which
should further enhance reliability.
Something not present in this engine
is the telltale grey of ceramic compos-
ite material, which is a surprise. When
the Leap-X programme was originally
launched, at the Farnborough Air Show
in 2008, extravagant claims were made
about the use of exotic materials to
achieve performance improvements.
While these materials will eventually find
their way into the engine in time, CFM
emphasises that, as the Leap-X engine
intended for the A320neo will oper-
ate at temperatures similar to todays
engines, it will be built using relatively
traditional base materials. Some new
heat-resistant coatings will be used, and
blade cooling will be improved, but the
only ceramic material will be found in
the high-pressure turbine shrouds. This
choice of materials is important because
while some would argue more stages
and more rotating parts contribute to
increasedmaintenancecosts, this would
be an over-simplification. Cost of spare
parts, availability of repair techniques
and competition in the parts-repair mar-
ket are also important factors in driving
repair costs down, and these criteria are
facilitated by using materials that are
known to the industry and repairable in
an airlines workshop.
There are the two engines presented
in a virtual head-to-head comparison.
On the one hand is the PW1100G: a
GTF engine, short and compact, and
with fewer rotating parts so maintenance
costs should be low. Its gearbox is, in
some peoples minds, a major unknown.
On the other hand is the Leap-X: longer,
but with a smaller fan diameter and more
rotating parts. It is relatively conserva-
tive in its choice of materials. But here is
a contradiction in the engine manufac-
turers marketing strategy: initially the
Purepower engine series was presented
as a fairly low-tech, rugged design but
areproducedfollowingextensive design
and test programmes and these two
engines are no exception. P&W has
been working on the geared turbofan
concept for more than 30 years, ever
since its abortive attempt to secure an
International Aero Engines GTF applica-
tion on the Airbus A340 in the mid-1980s.
The Leap-X engine is the offspring of a
technology acquisition programme
launched in the latter years of the 20th
century aimed at equipping CFM with
the technology it felt it would need to
support a new Boeing aircraft that, as
everyone believed at the time, would
enter service around 2013. And so, as
such, neither engine should present a
big risk in terms of technical maturity.
But the aviation world is full of surprises,
as CFM found out when it introduced
the CFM56-7B, a low-risk derivative of a
well-established engine family. While the
engine has settled down and is now pro-
viding excellent service, it did experience
"Thasa IWo ang|nas ara oIIan
dascr|bad as ba|ng 'naW`
ang|nas buI Ihara |s, |n raa||Iy,
no such Ih|ng. A|| ang|nas ara
producad Io||oW|ng axIans|va
das|gn and IasI programmas
and Ihasa IWo ang|nas ara no
axcapI|on"
some quite unusual, and unforeseen,
problems in the beginning.
Many airlines that have ordered the
A320neo have justified their choice of
engine based on their appreciation of the
respective manufacturers track record.
P&W has extensive experience on the
A320 family through its IAE joint venture
and, as stated before, it has been work-
ing on the GTF concept for a long time.
P&Wis also further into its engine devel-
opment programme than CFM, and can
probably back up sales pitches with
more hard data.
The Purepower series of engines has
also been selected for other aircraft,
such as the Mitsubishi Regional Jet, the
Bombardier C Series and the Irkut MC21.
Pre-production engines are flying, hard-
ware is being tested, components are
being torn down and examined in micro-
scopic detail. P&W claims that by the
time the PW1100G enters service on the
A320, the Purepower GTF engine con-
cept would have already accumulated
more than one million operating hours on
other aircraft programmes. CFM is also
into a heavy programme of component
testing but its engine will not enter service
until several months after the PW1100G.
In justifying the choice of the Leap-X
engine, customers such as SAS and Air
Asia refer to their previous experience
with CFM products. It is one thing to be
able to relate to previous product experi-
ence, but this is the crucial issue with both
of these engine programmes not only
are they revolutionary concepts in their
own right but they are also completely dif-
ferent from their manufacturers previous
product lines. P&W has never put a GTF
into service before and the Leap-X prob-
ably has more in comparison with GEs
GenX engine than with other engines in
the CFM product line. This suggests that,
in these cases, previous experience has
rather limited value as an engine selection
criterion. So how do you choose? In the
end it comes down to a question of confi-
dence. Who do you believe will be better
able to respect programme milestones?
Who is better able to accommodate the
head-spinning ramp-up required to intro-
duce several programmes to the market
at the same time? Who is better able to
manage their supply chain to avoid prob-
lems that could ground the whole fleet?
Who is better able to sort out technical
problems quickly if things do go wrong?
Both manufacturers have valid arguments
to answer these questions but only time,
and experience, will tell.
The choice of an engine is difficult
enough for an airline but how does
an aircraft leasing company make its
choice? If a lessor is looking to acquire
a large number of A320neos for leasing
to the airline community, which engine
model should it select? The answer is
simple both. Both engines offer step
changes in fuel economy backed up
by comprehensive OEM fleet hour
maintenance agreements. Both engine
manufacturers are committed to mak-
ing these programmes work to ensure
their future in the civil aero-engine busi-
ness. Both engines are available on a
number of different aircraft applications
(the American Airlines order has signi-
fied the launch of the 737 re-engined
with the Leap-X). The market (with a
little help from Airbus) will, in the long
term, ensure a more or less 50/50 split in
market share with regards to A320neo
engine selections.
But the market should not get over-
excited about re-engining programmes.
Engine manufacturers are used to play-
ing the long game and we should not
forget what this is really all about the
engine selection for the next generation
of single aisle airliners (NGSA). With
Airbus, and now Boeing, committed to
re-engining programmes, the timescale
for an NGSA has certainly been pushed
out to the right, but both engine suppli-
ers have their sights firmly fixed on this
longer-term objective. And they are not
alone Rolls Royce, although margin-
alised for the moment in this particular
market segment due to its unwillingness
to join P&W in a new IAE-type joint ven-
ture, is quietly pursuing its own mid-thrust
engine development programmes. And
whos to say that, in the meantime, there
might not also be new entrants into this
market the Chinese, for example? In 10
years time the fight to secure a place on
one of these re-engining programmes
might, in hindsight, seem just a minor
skirmish compared with the battle to
equip the next generation of completely
new single aisle aircraft.
"II a |assor |s |oo||ng Io
acqu|ra a |arga numbar oI
A320naos Ior |aas|ng Io Iha
a|r||na commun|Iy, Wh|ch
ang|na moda| shou|d |I sa|acI?
Tha ansWar |s s|mp|a - boIh "
GUIDING
YOUR END
OF LIFE ASSET
STRATEGIES
lnAvC lnAvC
INVENTORY NAVIGATORS
TM
INAVGROUP, LLC
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MAX V NEO
I
n one corner there is the
A320neo, an aircraft conceived
in a hurry but with an impres-
sive sales record. In the other
corner is the 737max; conceived
in a far greater hurry and playing catch-
up. So which aircraft is better and what
are their chances in the race for market
share? As with all aircraft purchases, it
depends on the operators circumstances
and considerations in purchasing the
aircraft type, for example, eet com-
monality, reliability, cost and trust in
an original equipment manufacturers
(OEMs) product.
The reasoning
The A320neo was designed in a hurry,
and though this was not a reaction-
ary measure from Airbus, it was John
Leahy, its chief operating ofcer, who
forced the programme through. Leahy
already knew that a new technological
leap in aircraft design and power being
developed by Nasa was not going to be
available for commercial service before
2030-35. Armed with this knowledge,
and the fact that airline customers
demanded more fuel savings, Leahy
concluded that there was a window to
push through an aircraft programme
that would both answer the need for fuel
savings and create additional revenue at
little R&D cost to Airbus a rare win-
win scenario. This is a stopgap strategy,
but the reasoning from the point of view
of both the seller and the buyer is sound.
Although most aircraft lessors dislike
the idea of the Neo due to its efect on
residual values and A320 lease rates, they
have little choice but to order the aircraft
to serve the needs of their customers. If
the 203035 timeframe is correct, the
new aircraft types have a market leading
life of around 15 to 20 years, slightly less
than today. Yet this might well become
the new standard while the industry
passes through a period of technological
change with age caps on imported air-
craft becoming commonplace.
Behind the scenes, CFM Interna-
tional (CFMi) was encouraging both
Airbus and Boeing to re-engine the A320
and the 737NG in order to sell its own
new engine the Leap X. CFMi realised
that if Airbus launched the Neo, Boeing
would have no choice but to re-engine
the 737, which would most likely be sole-
sourced with CFMi engines. CFMi was
desperate that there should be no all-
new aircraft at this time and appears to
have been pulling the strings of the two-
airframe manufacturers (see issue three
of Airline Economics). When presented
with the Pratt & Whitney (P&W) GTF
engine, Leahy asked for the engine to be
sent to Toulouse to be scrutinised before
being put onto an A340 for a full series of
tests. Impressed with the results, Leahy
began working on a way to use the new
engine option on Airbus aircraft.
At this point, Airbus had a problem.
P&W was delighted that Airbus was
impressed with the new engine but there
was Rolls Royce to consider; it also had
a new engine t for a re-engineered nar-
rowbody aircraft. Airbus insisted on going
through International Aero Engines
(IAE) to get the GTF engine, thinking
that IAE shareholder Rolls-Royce would
come to the table under the banner of
IAE (Rolls-Royce has since sold its stake
in IAE). It did not, however, and no con-
sensus was reached between the engine
manufacturers, leaving Airbus, which
was absolutely convinced it did not want
its aircraft to be sole-sourced, no choice
but to go it alone with P&W.
At this point, the board was set and
the pieces were in motion. The A320neo
was launched leaving Boeing worried
that it did not have the time to launch
the 737 replacement all-new aircraft it
preferred. It is assumed that Boeing was
hoping the Neo would fail to win orders,
which is understandable considering the
markets negative reaction to the Neo.
Meanwhile, in Toulouse, Airbus
realised good sales gures for the Neo
could force Boeing to make a snap deci-
sion to re-engine. But it became clear
that if Boeing went down the single CFMi
engine route, which seemed likely, the
A320neo could open up a serious mar-
ket lead. It was at this stage that senior
industry leaders began to assess the
merits of the Leap X and the P&W GTF.
The trouble with the Leap X engines is
that they dont look as good on the Neo
as the GTF does, one source told Airline
Economics. The CFMi Leap-X1A has a
78-inch fan its all the same technol-
ogy but if you can take a fan down by
10inches in this industry, everything else
being equal, youve just added 5% [to the
performance margin]. CFMi will argue
that it has made the engine smaller to
compensate and so have saved 1% on
weight and drag; but thats still a 4% dis-
advantage [on the GTF]. The end result
is that youve got a really big gap between
a P&W Neo and a CFMi Neo.
As it turned out, Leahy was not blufng
about his prediction for the success of the
Neo. He did have airlines lined up ready
to pay a premium for an A320neo, which
ew of the shelves. The 2011 Paris Air
A question of circumstance
The 737max vs the A320neo Airline Economics provides a definitive guide to both
aircraft programmes and which aircraft to buy now.
Before you read this article:
In the course of its research Airline Economics
has gained direct input from the signatories on
both sides of agreements for the aircraft and
engines in question, from airlines, original
equipment manufacturers and lessors. We also
have had input from people involved in deals and
engineeringinput fromthoseworkingonthepro-
grammes. Airline Economics is now aware how
much was paid for what, what mistakes were
made, and knows who is worried. See Airline
Economics, issues one, two and three, 2011, for
background on these aircraft and their engines.
Thank you to those that helped with this article.
MAX V NEO
ity ticket with CFMi and the Leap X, and
this seems to be its greatest weakness. A
Boeing source argues that the manufac-
turer has more engine specialists than
GE and P&W combined and so is sure
of its advantage, claiming it would not
have brought anything to market that
could not win. However, this contradicts
Airbuss ndings. Somebody has to be
wrong. So who is it?
Since the launch of the 737max, Boeing
been engaged in promoting the 737NG as
8% more economical than todays Airbus
A320 and that the new 737-8max will be
7% more economical than the A320neo.
Airbus has dismissed these claims as
The AA order essentially forced Boe-
ings decision. When Leahy obtained a
commitment in Boeings core home mar-
ket at a premium, the Boeing reaction
was immediate. Boeing went into nego-
tiations with only the 737-800NG on
the table it came out with the 737max.
CFMi controlled much of the proceed-
ings with its drawing-board solution to
the 737NG engine clearance problem.
CFMi said it could make the fan diam-
eter of its Leap X engine smaller while
at the same time improving the new
aircrafts performance over the exist-
ing 737-800NG. However, Boeing has
taken this performance gain and applied
it directly against the A320neo to dem-
onstrate that the Max is in many ways
superior. The gures are hotly disputed.
Both Airbus and Boeing take their
aircraft specications and apply them
in a way that makes them best in class.
They also produce equally convinc-
ing sales pitches, and both Airbus and
Boeing defend their respective aircraft
admirably. The important issue is that
Boeing is wedded to the engine-exclusiv-
Show morphed into the A320neo show,
which was disappointing for Boeing, as it
was still holding out hope it would have
time to launch an all-new 737NG replace-
ment. Time was running out.
Meanwhile, it was all-out war for engine
orders where the A320neo was concerned.
Airline Economics learned early last year
that CFMi made it a priority in 2011 to
capture market share at all costs, which
led to slashed prices and virtually free
engines. One airline was ofered such a low
price that it was suspicious of its claimed
performance and promptly ordered P&W
GTF engines saying: If they are free they
are obviously no good.
Boeing was scrambling during the
rst half of 2011 trying to nd an answer
to the Neo challenge, and was investigat-
ing whether it could launch an all-new
aircraft in the same timeframe as the
Neo to meet customers demands. But
then came the American Airlines (AA)
tender for new narrowbody aircraft. The
AA deal had echoes of the split deal in
the 1980s when AA ordered both A300-
600Rs and 767-300s.
Although most aircraft lessors
dislike the idea of the Neo due
to its effect on residual values
and A320 lease rates, they
have little choice but to order
the aircraft to serve the needs
of their customers
800nm sector
Nominal performance Standard profile and weights
*fan area LEAP-1A versus CFM56-5B
Drawings not made to scale
Thanks to Sharklets A320neo delivers full SFC benefit
Engine
SFC
-15.3 %
+1%
Reference
A320 CFM
Fuel Burn
savings %
Improved
core
~7%
+32%more area* ~7%
Powerplant integration
~1%
Sharklets -2.4%
Example of A320neo LEAP-1A versus A320 CFM56
- Extra MWE < 2t
- Drag
+2.7%
-15.0%
A320neo
versus
A320
FIGURE 1: A320NEO FUEL BURN SAVINGS RATIONALE (800NM SECTOR)
MAX V NEO
have airlines and lessors and has sought
to keep its message clear based upon
facts. Boeing has revealed its comparison
chart (see gure 2) but have the facts been
checked? Airline Economics contends
that airlines have but the media has not,
so seeks to put the record straight here.
Boeing says that the Max will have a
similar seat-mile and trip-cost advan-
tage relative to Neo as the 737NG did
against the A320. The A320neo will
be 12 seats smaller than the 737max-8
and weigh more. Aircraft size selection
is always a trade between trip cost and
seat-mile cost. Trip cost is known as risk
(it has to be paid no matter how high the
load factor is) while the seat-mile cost
is the reward (as the airplane is lled,
unit costs decline, increasing margins).
Choosing to buy an airplane with lower
trip and seat-mile costs is a no-brainer.
This is why the 737-800 does so well rel-
ative to the A320 and this is why the Max
is going to do just ne against the Neo.
When asked about the fan diameter
Boeing says that, if a bigger fan is better,
why not just hang a GE90 on the Neo?
Bigger fan equals more drag and more
weight, it says, and the fan is optimised
for each airframe. Our aircraft weighs
less (and carries more) and therefore
needs less thrust (less maintenance and
better fuel burn) and therefore needs a
smaller fan (lighter and less drag). Every
lessor and aircraft investor will tell you
that one of the big reasons why NG is
a better investment than an A320 is
because A320s multiple engine choices
fragment the market of potential cus-
tomers. The bottom line is that the NG
did just ne against multiple engine
choices on A320 and there is nothing
that changes that dynamic for Max vs
Neo, says a Boeing source.
This is the argument from Boeing that
forms the core of its sales strategy. Logi-
cal, but it all depends on what you mean
by better.
The OEMs are experts in dening the
parameters that will show their product
in the best light (see gure 2). Airline
Economics would tend to agree with
Boeing that fuel burn per seat is probably
a sensible gauge, as it allows for a com-
parison of the diferent sizes of the two
aircraft. But what of fuel burn? Per hour,
and at what speed or altitude? Per trip?
If so, what sector length? Is it specic
This is where we should raise some
questions about the engine installa-
tion. The A320s engines are hung low
under the wing, minimising interference
between the nacelle and the wing. The
Maxs installation will push the engine
even further forwards and upwards than
on the 737NG, creating the potential for
more interference between the nacelle
and the wing.
(See issues one and three, 2011, of
Airline Economics for the full engine
comparison, company lines, investor
polls and inside information on the P&W
GTF and the CFMi Leap X. Available at
www.aviationnews-online.com/airline-
economics).
The problem for Boeing is what was
the 737NGs past strength the sole-
source engine is now a disadvantage.
The 737max has an exclusive agree-
ment with an engine that the majority
of sources claim cannot compete with
the P&W GTF, even before taking into
account the implications of making the
Leap X smaller for the 737max. This
attitude appears to be playing out in the
marketplace, where operators, when
they have compared the aircraft with the
Max, are switching to the Neo even Boe-
ings previously exclusive customers. To
make that switch to the Neo, it has to be
blatantly obvious the aircraft is believed
to be better than the Boeing ofering, or
it wouldnt be worth the change.
So what now for Boeing?
If Boeing has got a sub-optimum re-
engined aircraft, it cant do much about it
unless the airframe is changedcompletely,
which means it will not get the same rat-
ing again. It is worth remembering that,
in what has been described as the great-
est marketing job of all time by a senior
Airbus executive, Boeing convinced the
Federal Aviation Administration that
the 1967 type rating was still valid in the
mid-90s when it launched the 737NG
even though the majority of the aircraft
was changed completely. That is highly
unlikely to happen again.
If Boeing does go back to the drawing
board on the Max, it will need to deal with
problems such as the lack of room inside
the current aircraft, making way for big-
ger landing gear. It would have to change
the fuselage, the centre section, wing, y-
by-wire by then we are talking about a
fuel consumption, that is, pounds of fuel
burned by the engine per pound of thrust
produced, the usual parameter of engine
manufacturers? Engine fuel burn? Per
what? Per hour, per mile, per trip, per
passenger seat mile? Aircraft fuel con-
sumption, within a specic range?
The only way the market will really
know is when all aircraft/engine con-
gurations have been certied and the
performance data published. Until then
we can only guess.
While the engine manufacturers
are still being coy about the details of
their engines (especially with regards
to weight), the Leap-X1B for the Max is
expected to be lighter than the X1A for
the Neo. The fan is smaller, with lower
thrust. So it should not be surprising if it
has one or two stages of LP turbine less
than the higher powered Airbus engine
(compare 5B LP turbine conguration
with 7B LP turbine conguration: 5B
thrust to 33k lbs, 5 stage LPT, 102,4
engine length, 5250 lbs; 7B thrust to
27k lbs, 4 stage LPT, 98,7 engine length,
5216 lbs).
As for Boeings drag argument it is
correct. A higher bypass ratio (BPR) usu-
ally means lower SFC but with these big
fans you get to a point of diminishing
returns in that the more you increase the
bypass ratio, and hence the fan diameter,
the better the SFC of the engine. But then
you get more drag from the fan frontal
surface and the wetted area of the nacelle,
which increases the overall fuel burn of the
aircraft. The Max will have a smaller fan,
and so lower BPR and higher SFC, but less
fan and nacelle drag. Ryanair chief execu-
tive Michael OLeary is not convinced by
this drag gain. He is impressed by the fuel-
burnimprovement the A320neo promises
to deliver, but not by the 737max, and says
the fuel burn improvement on the Max
is inferior. He particularly fears that the
heavier CFM Leap-1B engines and the
subsequent heavier airframe will ofset
the better SFC, when compared with the
CFM56-7B(E).
Those who have already
chosen the CFMi engine are
Ia||ng a |aap oI Ia|Ih - mayba
that is why CFMi called it the
Leap X?
brand new aircraft. This is the scenario
that is no doubt running fear through
the corridors of GE in Cincinnati. CFMi/
GE understands that if it cant deliver on
the promises of the Leap X engine to keep
Boeing on track with the re-engine of the
737, it will face substantial competition
from P&W and Rolls Royce. One source
says: In such an event, Boeing could try
to claim it can now ofer the GTF on the
737 and optimise it for an 82-inch fan so
it gets one inch more than the Neo.
This could be great for Boeing and
to the detriment of Airbus, yet Boeing
would have to burn bridges with CFMi.
For Boeing, both the new aircraft option
and the option of getting the GTF on wing
less radically work to destroy the synergy
advantage of having all CFMi-737NG
engine eets. If Boeing were to drop the
CFMi engine and go with Rolls Royce or
P&W, chaos could ensue in the market. It
is possible, though. A Boeing senior staf
member states: There is a reason why we
need a couple of years to work through all
these issues. But that does not mean we
do not have a very good idea of where the
nal products will end up.
Leahy must have known that the
launch of the Neo, if it worked, would
force one of two things out of Boeing: it
would either be brave and launch a new
aircraft and then Airbus would be in a x,
or Boeing wouldbeforced into a reaction-
ary and rushed decision to re-engine the
737NG, playing right into the hands of
his team. It was the latter that transpired.
Boeing completed its mistake by having
CFMi exclusivity. CFMi has to come up
with an engine that is a smash hit, but
many still dont know how it is going to
do that with a lower fan ratio.
Where the programmes are now
The launch of the Neo was quick but
orderly, with all programme details and
launch customers in place by the time it
went public. The same cannot be said of
the 737max, even though Boeing claims
to have launched the Max in a similar
methodical manner to the Neo, with air-
lines queuing up to order the new option.
The reality
Both aircraft were conceived out of
consultation with airlines; the diference
is that the Neo was driven by market lead-
ership while the Max was designed as a
reactionary measure. It was rushed to mar-
ket, andthat shows. This is anopportunity
for themanufacturers to push to market an
aircraft without the usual R&D costs asso-
ciated with a new aircraft programme. The
aircraft also allow for the manufacturers to
increase their aftermarket share at point of
order a core future revenue driver where
the OEMs are concerned.
Lessors have little choice but to order
both aircraft types, knowing that the
impact of the 737NG on the 737 classic will
be played out all over again for a far smaller
gain than was expected. Meanwhile, the
A320 sufers from its own success. The air-
craft was mass produced to such an extent
that the market is ooded. Lease rates for
MAX V NEO
lower fuel consumption
Base
-1%
-2%
Fuel burn/seat
162 Seats
65
68
Ref
150 Seats
A320
-3%
-4%
-5%
-6%
68
A320
-13.5%
Engine
technology*
Remove
tip fences
+1%
6%
737-800
61
-7%
-8%
-9%
-10%
+3.5%
technology
Integrated
drag & weight*
Add larger
winglets
-3%
Improved
-1%
-12%
Engine
technology
737 800
61
-11%
-12%
-13%
-14%
-15%
78
81
A320neo
12%
p
aft body
1%
+2%
Integrated
drag & weight
gy
-15%
-16%
-17%
-18%
-19%
Typical mission rules
A320neo
CFM LEAP-1A or
PW 1100G (GTF)
* GTF components slightly different but have same net effect as LEAP
68
737 MAX 8
17%
CFM LEAP 1B
COPYRIGHT 2011 THE BOEING COMPANY
-20%
Typical mission rules
500 nmi trip
Two-class seating
All 737s include optional winglets A320neo includes winglets
CFM LEAP-1B
FIGURE 2: 737 ENGINE AND INSTALLATION OPTIMISATION DRIVES LOWER FUEL CONSUMPTION
For NG and A320, calculations are based on actual fuel burn, not specifc fuel consumption (SFC). For Max and Neo it is the
projected fuel burn where SFC is one of the variables in the analysis.
MAX V NEO
all the A320 family aircraft are falling fast,
and lessors with large amounts of these
aircraft on their books now need to con-
sider what to do next. The introduction of
the A320neo will not have too much efect
on the A320 classic market, as it is already
falling fast some years before a Neo rolls
out of the factory door. However, this is
having a reactionary impact that might
yet see A320lease rates stabilise as lessors
move to buy up A320s with lease contracts
cheaply and then run the contracts out and
sell of the engines at the end of the life and
part out. It looks as if the 737NG lease rates
and values will start to soften (not just the
-700s) in the next two years as that market
also reaches proliferation.
Conclusion
The 737max does have a signicant weak-
ness, and that is in the power plant and
the ground clearance. There is increasing
evidence that the Pratt & Whitney engine
is exceeding expectations in all aspects
of testing. There remains the possibility,
however unlikely, that the A320neo could
have a massive advantage over the 737max
if it has P&W engine on-wing.
At the time of going to press, CFMi had
not responded to requests for comment.
Boeing and CFMi might point to the P&W
engine being untested as a reason to pur-
chase their product, but the whole Max
programme is also unclear and untested.
Airline Economics believes Boeing could
nd itself with no option but to approach
P&W and/or RR to provide alternative
engines for the Max, which in turn will
have profound efects on the CFMi rela-
tionship and destroy the eet synergy of
the Max with the older 737s.
Aircraft lessors need to service the
requirements of the market, to get in early
on the order books, and maximise their
chances of premium leases and market
value, so they will order both the Max and
the Neo, regardless. The bottom line for the
rest of the market rests on purchase price
versus cost savings. This is the deciding
factor in the argument, and at the moment
favours the A320neo. When ordering air-
craft, operators and/or investors must
base a decision on the facts to hand, unless
they are ofered a deal that displaces this
logic. In the end both the Max and Neo will
competeonprice. Boeinghopes that: Just
like the NG has consistently commanded a
premium over A320s, so will the Max over
the Neo. The only question that remains
is how big the Max price premium will be
over the Neo, says a source in the US.
Another issue is that, in 2011, a large
number of A320neo orders were driven by
start-up airline requirements. Given the
economic decline since then, Boeing might
have missed the boat for this market.
Can you purchase a Max or Neo early
and make a gain? As with all aircraft in the
past, the answer is yes.
Longer term, on maintenance Boeing
argues the Max will have the edge because
its engines are smaller and CFMi has a
proven reputation for reliability. But at
this stage the details of both aircraft are
not complete.
Residual values are a variable in all
this, and are the crunch factor if avia-
tion companies are to rely on capital
markets nancing more often in future.
For an investor the main worry is guar-
anteed returns over a set period and
residual value of the asset at the end of
the investment term. Based on historical
information, one could argue the 737max
will hold its value over the A320neo
because, traditionally, Airbus has pro-
duced more aircraft and saturated the
market at a faster pace reducing long-
term residual values and rental rates. This
results in the A320neo depreciating more
quickly than the 737max.
A start-up airline in the market for
the very best deal might have to go with
the A320neo withP&Wengines onwing,
presuming the slots are not all taken for
the delivery periods. Delivery times are
where the 737max will gain a few addi-
tional orders, but it would probably be
prudent to wait to see what Boeing does,
and then turn to the lessors if time scales
and nancing require.
It would be logical for airlines with a
CFMi-powered eet to opt for the CFMi
engine, there is no argument there. But
those who have already chosen the CFMi
engine are taking a leap of faith maybe
that is why CFMi called it the Leap X?
If you can get the new version at the
same price as the old, you are going to
buy the one with the better technology.
Airbus, however, is starting to raise the
Neo price, which again puts those who
ordered early in an excellent position.
So the Max remains a gain in any event,
while the boat has been missed for air-
lines seeking a Neo for pure list price gain,
due to its success to date and order slots
being sold out. Boeing is ensuring the
Max has more range capability over the
Neo, which might be of interest to some.
Boeing conceded to pressure to re-
engine the NG when American Airlines
and CFMi pushed it to match the A320neo
ofered by Airbus. However, in hindsight
this commitment from the now bank-
rupt American Airlines was not worth the
trouble it caused Boeing. Perhaps Boeing
executives should have held their ground
and been prepared to take the AA hit while
waiting for a better opportunity to trump
Airbus and launch a completely new
aircraft. If they had done so, it is highly con-
ceivable that Boeing would have ofered a
choice of engines on that new aircraft.
Some might think Boeing has made a
mistake, but it has the talent, knowledge
and experience to correct it, and to ensure
its aircraft are better than the A320neo. If
that means P&W or RR engines on wing
or a totally diferent CFMi ofering, so be
it. There is an opportunity to get on the
737maxorder books and trust Boeingtodo
the right thing, and in so doing buy what
could be a great aircraft cheaply.
The Airline Economics view: Order
the 737max now as a large block order
(or ensure contact and collaboration
with another large order signatory)
and pressure Boeing hard for a great
investment opportunity. Or for the saf-
est guarantee of best performance in the
here and now, order the A320neo with
P&W GTF on wing.
This current scenario is no diferent
than the 787/A350 situation but it is a
roll reversal. This time Airbus launched
the better aircraft. It is highly likely that
Boeing will do with the Max what Airbus
did with the A350. It will go back, change
the aircraft, raise it, and then CFMi will
roll up at the door with an engine 1 or so
larger (diameter) than the one on the Neo
and Boeing will be able to move forward.
Airline Economics sees this as likely.
o5HVLGXDOYDOXHVDUHD
variable in all this, and are
the crunch factor if aviation
companies are to rely on
capital markets financing more
RIWHQLQIXWXUHp
MAX V NEO
TABLE 1: AIRBUS A320NEO ORDERS (AS OF FEBRUARY 13, 2012)
Customer Country Region Model Engine Order date Firm Status Options Total options
Virgin America US North America A320neo LEAP-1A 29-Dec-10 30 frm 0
ILFC US North America A320neo LEAP-1A 26-Apr-11 15 frm 0
ILFC US North America A321neo LEAP-1A 26-Apr-11 25 frm 0
ILFC US North America A320neo PW1100G 26-Apr-11 60 frm 0
SAS Sweden Europe A320neo LEAP-1A 20-Jun-11 30 frm 0
GECAS US North America A320neo LEAP-1A 20-Jun-11 60 frm 0
ALC US North America A320neo open 20-Jun-11 20 MoU 14 14
ALC US North America A321neo open 20-Jun-11 16 MoU 14
Transasia Taiwan East Asia A321neo open 21-Jun-11 6 frm 14
LAN Chile South America A320neo open 22-Jun-11 20 frm 14
IndiGo India East Asia A320neo PW1100G 22-Jun-11 150 frm 14
GoAir India East Asia A320neo open 23-Jun-11 72 frm 14
Air Asia Malaysia South East Asia A320neo LEAP-1A 23-Jun-11 200 frm 100 114
American Airlines US North America A321neo open 20-Jul-11 130 MoU 280 394
Lufthansa Germany Europe A320neo PW1100G 27-Jul-11 25 frm 394
Lufthansa Germany Europe A321neo PW1100G 27-Jul-11 5 frm 394
Cebu Pacifc Philippines Southeast Asia A321neo open 8-Aug-11 30 frm 10 404
Garuda Citilink Indonesia Southeast Asia A320neo LEAP-1A 9-Aug-11 10 frm 25 429
CIT US North America A320neo LEAP-1A 10-Aug-11 15 frm 429
CIT US North America A320neo PW1100G 10-Aug-11 30 frm 429
CIT US North America A320neo open 10-Aug-11 5 frm 429
Qantas Australia Oceania A320neo open 6-Oct-11 78 frm 194 623
TAM Brazil South America A320neo open 20-Oct-11 22 frm 623
Jetblue US North America A320neo PW1100G 27-Oct-11 40 frm 623
ALAFCO Kuwait Middle East A320neo PW1100G 14-Nov-11
14-Feb-12
85 frm 653
ACG US North America A320neo open 15-Nov-11 30 frm 653
Qatar Airways Qatar Middle East A319NEO PW1100G 15-Nov-11 6 frm 653
Qatar Airways Qatar Middle East A320neo PW1100G 15-Nov-11 30 frm 30 683
Qatar Airways Qatar Middle East A320neo PW1100G 15-Nov-11 14 frm 683
Transaero Russia Europe A320neo open 15-Nov-11 8 frm 4 687
Republic Airways US North America A319NEO LEAP-1A 1-Dec-11 20 frm 687
Republic Airways US North America A320neo LEAP-1A 1-Dec-11 60 frm 687
Undisclosed Undis-
closed
Undisclosed A320neo open 20-Dec-11 35 frm 687
Volaris Mexico South America A320neo open 27-Dec-11 30 frm 687
Spirit Airlines US Middle East A320neo open 29-Dec-11 45 frm 687
Norwegian SAS Norway Europe A320neo open 25-Jan-12 100 MoU 50 737
Avianca TACA Colombia South America A320neo open 26-Jan-12 33 frm 737
TABLE 2: BOEING 737MAX ORDERS (AS OF FEBRUARY 13, 2012)
Customer Country Region Model Engine Order date Firm Status Options Total options
American Airlines US North America B737 MAX-8 LEAP-1B 27-Jul-11 100 MoU 100 100
ACG US North America B737 MAX-8 LEAP-1B 17-Nov-11 35 MoU 100
Lion Air Indonesia Southeast Asia B737 MAX-9 LEAP-1B 18-Nov-11 201 frm 150 150
Southwest Airlines US North America B737 MAX-8 LEAP-1B 13-Dec-11 150 frm 150 300
Norwegian SAS Norway Europe B737 MAX-8 LEAP-1B 25-Jan-12 100 frm 100 400
737-800 VS A320-200
737-800 Vs A320-200
For thoseshopping for 160-seat aircraft, Airline Economics
has gathered the relevant information on the main contenders.
A
i rbus predi cts, i f
oil continues on its
upward trend, that
4,000 A320neos will be
sold over 15 years from
2011. Pratt & Whitney
estimates that it will capture at least
50% of this total, which looks set to
be the case. CFM will continue to do
well; the Leap X is a great engine that
provides mixed fleets with a degree of
synergy.
Despite the flurry of orders
announced for the A320neo airlines
and lessors appear to be united in
their dislike of the new aircraft. Boeing
obviously has issues with it, Zolotusky
says: I cannot think of a single air-
plane introduced by Boeing or Airbus
that has so uniformly and universally
faced opposition from the financial
community. Lessors dont like it;
bankers dont like it; equity investors
dont like it. The low level of financiers
acceptance is unparalleled. For them,
they view it as an asset that will dis-
rupt the current A320 values and will
not be long enough in its own life to
establish and new platform and stable
values.
Undoubtedly the Neo will bring
down residual values for the current
A320 type, which happens with all
replacement aircraft. However, this
is the first aircraft that has united the
financial community against it from
an investment point of view. And in
this market, where banks are look-
ing very closely at what assets they
finance, this could prove fatal for the
Neo program at least for those air-
lines seeking to finance deliveries
without support from the export credit
agencies.
Bertrand Grabowski of DVB Bank
SE was quoted by Bloomberg as say-
ing that the value of A320neo may drop
significantly once next-generation
single-aisle aircraft begin entering the
market, which could happen within a
decade. He went further to add Why
do you [Airbus] propose to the mar-
ket an aircraft which is going to be
an interim arrangement? Thats
bizarre.
Banks or leasing companies are
going to be exposed, said Andrew
737-800 VS A320-200
Before, during and after the fnancial crisis A320-200 & 737-800 against current A320neo
Average Current Market Value Dry Lease Rates (averages)
Manufacturer Type list price As at (Year) Oldest Newest Oldest Newest
Airbus A320-200 $64.50m 2006 $11.95m $40.15m $0.155m $0.395m
Airbus A320-200 $66.75m 2007 $11.29m $45.8m $0.150m $0.410m
Airbus A320-200 $76.90m 2008 $11.00m $41.10m $0.135m $0.365m
Airbus A320-200 $76.90m 2009 $7.40m $38.50m $0.100m $0.325m
Airbus A320-200 $76.90m 2010 $6.80m $37.80m $0.100m $0.325m
Airbus A320-200 $85.00m 2011 $5.00m $39.30m $0.070m $0.320m
Airbus A320neo $90.60m 2011 n/a n/a n/a n/a
Boeing 737-800 $67.75m 2006 $29.75m $43.00m $0.290m $0.405m
Boeing 737-800 $70.75m 2007 $32.17m $49.88m $0.330m $0.425m
Boeing 737-800 $74.50m 2008 $25.90m $41.90m $0.255m $0.370m
Boeing 737-800 $74.50m 2009 $23.10m $40.10m $0.220m $0.340m
Boeing 737-800 $74.50m 2010 $20.70m $39.20m $0.220m $0.340m
Boeing 737-800 $80.80m 2011 $19.70m $40.75m $0.235m $0.350m
737-800 VS A320-200
Koystya Zolotusky of Boeing Capital.
LCCs first and foremost have a much
higher utilisation of its aircraft rela-
tive to network carriers. The way to
achieve high utilisation rates is to have
an extremely reliable airplane. If you
are going to have an all-new engine,
you cannot hope to have reliability
at the level we deliver in the current
engine/airframe combination.
The annual average market val-
ues for the A320-200 and 737-800 show
clearly the rush to market for new
aircraft as oil topped $145 a barrel,
the subsequent tail off as liquidity
and passengers dried-up and now the
Miller, chief executive officer of Syd-
ney-based CAPA Consulting, which
advises airlines and industry inves-
tors. When a new model is announced,
the depreciation of the existing model
grows.
The driving force behind the popu-
larity of A320 and 737 aircraft has been
the growth of the low-cost carriers.
Their operating model of high turn-
arounds and high aircraft utilisation
means fleet and engine commonality
is of the up most importance.
The biggest and most important
driving force is that the 737/A320
market is the low-cost carrier, says
A320-200 & 737-800 MARKET VALUES (PAST FIVE YEARS)
10
20
30
40
50
60
2006 2007 2008 2009 2010 2011
V
a
l
u
e

i
n

U
S
$

m
i
l
l
i
o
n
s
A320-200 oldest A320-200 newest 737-800 oldest 737-800 newest
Year
AIRCRAFT
MANUFACTURER
AIRCRAFT TYPE AIRCRAFT VARIANT TOTAL IN
SERVICE
TOTAL
IN STORAGE
CURRENT
TOTAL
Airbus A320 110 (CFM) 1 0 1
Airbus A320 200 (Engines Unannounced) 0 0 0
Airbus A320 200 ACJ (Engines Unannounced) 0 0 0
Airbus A320 210 (CFM) 1386 66 1452
Airbus A320 210 (CFM) Sharklets 0 0 0
Airbus A320 210 ACJ (CFM) 4 0 4
Airbus A320 230 (IAE) 1064 44 1108
Airbus A320 230 (IAE) Sharklets 0 0 0
Airbus A320 230 ACJ (IAE) 1 1 2
Airbus A320 200 neo (Engines Unannounced) 0 0 0
Airbus A320 200 neo (PW) 0 0 0
Boeing 737 (NG) 800 214 2 216
Boeing 737 (NG) 800 Winglets 1976 26 2002
Boeing 737 (NG) 800A 3 5 8
gradual return to a stable market of
late 2005 levels. The older A320-200s
held their values during the surge of
2006 and 2007 and continued to dur-
ing 2008 as new aircraft orders ceased
on the main but the return to market
in 2009 saw a resetting of values at a
new lower level that has been eroded
further during late 2010 to date as
oil has again marched above $100 a
barrel. The older 737-800s, although
some nine years newer than the older
A320-200s are also seeing their values
fall into a new bracket far below the
tracked margins of pre-2008. This,
much like the older A320-200s, marks
a new chapter of cheaper aircraft, a
chapter where parting out is the only
logical option. The new A320-200s
continue to track the fortunes of the
737-800 as closely now as ever.
In the leasing market the rates of
return have also reflected market con-
ditions well with 2011 seeing 737-800
lease rates inching ahead while the
same for the A320-200 fall off slightly.
On the main, the market has been
stagnant since early 2009 with very
little sign that improvements in lease
rates on the types are on the horizon
at the moment. It will be interesting
to see if the 737-800 continues to pull
away from the A320-200 to create a sig-
nificant rate of return gap over the 2nd
half of 2011. Older 737-800s have seen a
slight increase in rates of return also
from 2009/10 levels but the older A320-
200s continue to tail off as they move
towards 25 years of age in some cases.
737-800 VS A320-200
Boeing has seemed to rush to mar-
ket with the 737Max but the reality
remains. The reality remains that the
737-800 is good enough to compete to
the end of the decade so an all-new
offering for entry into service around
2020 would be the logical option that
would be supported by lessors. The
737-800 purchase price saving over
the A320neo means that it cannot be
beaten on economics and the proven
reliability of both the airframe and
the CFM56 engines is a real winner.
That said if you are currently running
an A320 family fleet then you have no
choice but to move for an A320neo
as upgrade or replacement. We
have been here before, when Boeing
launched the 737NGs they completely
undermined the residual value of what
became the 737 classic fleet, many
airlines and lessors were left with
no choice but to move to rebalance
their portfolio towards the NG and
remarket the classic before the period
before values of the same plummeted
when production levels of the NG got
towards the 50% of existing 737 clas-
sic fleet levels. Airbus is banking that
its move would bring about a re-run of
the 737NG launch and at the moment
there is no reason to think that this
will not be the case. Moreover, now
the market has shifted to being a 50%
lessor controlled split in most regions
and the lessors, although livid with the
move by Airbus to the neo, will indeed
be forced to re-balance their books at
speed. In a leasing market the cus-
tomer demands the latest technology
and so this has to be provided. So Air-
bus is able to bring about a series of
what are in effect forced orders for
the neo in a market where conditions
favour a far faster run of orders than
that enjoyed by the 737NGs upon its
launch. If this happens Airbus is able
to increase its profile in the aftermar-
ket which is now a core aim. So for
Airbus the A320neo is a very sound
program with very little R&D spend
to worry about.
The problems for Airbus are how-
ever numerous. The launch of the
A320neo should all but kill-off the
long-term prospects for the A320-200
but this will only occur if Airbus can
achieve the desired 15% savings mar-
gin, as Phil Seymour of IBA says The
doubts on the fuel efficiency claims of
both the CFM Leap X and the P&W GTF
are due to the fact that they are bigger
and heavier engines so theaircraft will
be heavier and burn more fuel anyway.
The Sharklets also accounts for some
of the fuel efficiency of the A320neo,
says Seymour, and when taking into
account the different maintenance
requirements and the different spare
parts for the engine, increased train-
ing costs, the absolute fuel costs
reduction for the whole airplane
maybe adds up to a 3% saving in fuel.
A320-200 & 737-800 DRY LEASE RATES (AVERAGES) FOR PAST FIVE YEARS
0.1
0.2
0.3
0.4
0.5
2006 2007 2008 2009 2010 2011
A
m
o
u
n
t

i
n

U
S
$

m
i
l
l
i
o
n
s
A320-200 oldest A320-200 newest 737-800 oldest 737-800 newest
Year
TOTAL
ON ORDER
GRAND TOTAL TOTAL LETTER
OF INTENT
TOTAL ON
OPTION
TOTAL OPTION
LETTER OF
INTENT
AVERAGE AGE TOTAL
OPERATOR
0 1 0 0 0 24 1
304 304 162 56 2 0 23
2 2 0 0 0 0 2
630 2082 9 219 0 7 159
100 100 0 0 0 4
0 4 0 0 0 3 4
714 1822 18 200 0 7 128
10 10 0 7 0 1
0 2 0 0 0 2 2
45 45 22 0 0 3
60 60 175 0 0 3
16 232 0 60 89 8 39
1433 3435 107 482 63 5 157
14 22 0 0 0 1 3
737-800 VS A320-200
financing cost with the maintenance
cost, although the maintenance cost
increases, the finance or lease costs
of older aircraft is actually lower. The
combined curves means there is no
reason not to hang on to an aircraft
until it is well into its third decade.
This taken against the backdrop of
global uncertainty means that airlines
need to be sure, more than ever, that
they are getting the best economics
from the smallest possible outlay and
with this in mind the A320-200 should
prove to be a serious bargain if values
start to fall and this, ironically, could
well see the economics of the A320-
200 improve rapidly against both the
A320neo and the 737-800.
It remains to be seen if the A320neo,
will be able to achieve improved prices
in the medium term. The 737NG proved
that that a new aircraft, although
far superior, does not guarantee the
market will fork out the extra cash.
Whatever happens Boeing will launch
something to upgrade or replace the
737-800 by 2025 at the latest and as
such many are right to argue that the
A320neo has a very short life span.
Indeed, the A320neo was launched
with all eyes looking East to COMAC
and their C919. The lifespan will in the
end be dictated by Boeing and COMAC
as if their aircraft can move towards a
15-20%fuel saving on the current 737-
800NG then the future is theirs.
So in our A320-200 & 737-800NG Vs
A320neo the winner is the 737-800NG.
Airbus refutes these claims however:
The 15% fuel improvement is 15% net
benefit of engines on the airframe,
says Alan Pardoe, marketing com-
munications director. The improved
fuel burn of the new engines before
they are installed on the airplane is
higher than 15%. The Sharklets on the
aircraft along with the new engines on
the wing, less the incremental weight
of the heavier engines give a 15% net
benefit in terms of fuel burn.
As we all saw with the MD11, it can
all go wrong for the manufacturer and
claims at the launch of a program can
often be overestimated in the extreme
to the cost of airlines. Until the air-
craft is in the air with an airline and
performing the reality of the econom-
ics is unknown. The manufacturer
will always argue that an aircraft
replacement is needed. When you
sit down in front of Airbus and Boe-
ing they show you the maintenance
cost curves which after about year 14
start to increase rapidly because the
aircraft starts to age and you get cor-
rosion and fatigue problems, says
Seymour. The manufacturers tell
you that after year 14 you will spend
far more on maintenance than you
will have done in the past and that
it is a better investment to get rid of
those older aircraft and replace them
with new. Manufacturers are bound
to say that as they are in the business
of building aircraft. What we have
found is that when you combine the
It is cheaper and better in many
respects than the A320-200 and at this
moment, unless Airbus is able to bring
forward some concrete evidence of a
15% net saving on fuel burn, then it is
by far safer in economic terms. Unless
Airbus is able to hit or beat the 15% net
saving on fuel burn, the 737-800 will be
more economical as cost at purchase
and known economics put it ahead of
the A320neo over a ten year period
and well ahead over a five year period.
The real versus story for the Airbus
A320neo is coming from COMAC with
their C919. The C919 was not included
in this article because there remain so
many variables that it would be impos-
sible to be accurate in any way. The
C919 has had its wings clipped back by
the launch of the A320neo and COMAC
will have to double efforts to get their
engine offerings and aftermarket sup-
ply chains fully mapped out to attract
airlines away from Airbus and Boeing.
Assuming that COMAC can get every-
thing that it says it can ready on time
then the A320neo might look like a bit
of a long-term disaster as the weight
difference is (on the table at least) sig-
nificant to say the least. Boeing will
surely be looking to what is going on
in China, not France, to decide what
move to make on the future of the Max
design and engine choice. There is
little to say about the Max as it seems
certain it will change a lot before its
first flight date to match or even better
the A320neo.
MAINTENANCE
T
he A320 family can be cred-
ited for Airbus success
as an aircraft manufac-
turer, particularly as it now
enjoys one of the widest
customer bases in aviation history.
Air France took delivery of the first
A320 in 1988 and since then the A320
family which includes the A318, A319,
A320 and A321 has amassed over 7,000
orders with more than 4,600 aircraft
delivered to almost 330 customers and
operators worldwide.
This impressive sales record makes
it the worlds best-selling commercial
aircraft and therefore a maintenance
cash cow.
The introduction of the A320neo will
have little effect on the aircraft types
popularity as it has over 95% airframe
commonality with the existing models
making it an easy fit into existing fleets.
The global A320 fleet continues to grow
at a rate in excess of 10% and this will
increase as from Q4 2012 to 42 aircraft
per month from the current 36. Pro-
duction rates will steadily rise to 38 in
August 2011 and to 40 in the first quarter
of 2012.
Inspecting the A320
The A320s maintenance check inter-
vals have been raised several times
since its launch. And Revision28, which
was added to its Maintenance Planning
Document (MPD) in November 2004,
stated that although daily and weekly
checks were still required every 36
hours and eight days, the tasks were
split among three different sub-groups
-- flight hours, flight cycles or calen-
dar time. This gave the airline a great
deal more flexibility because the check
intervals could be defined by the most
appropriate usage parameter for that
carrier.
Maintenance glitches such as prob-
lems with the air conditioning and
brakes have been ironed out and fly-by-
wire technology is fully accepted. Airbus
is aware that airlines are constantly
looking to reduce maintenance costs
and MPD Revision 28 allowed opera-
tors to extend the intervals between
maintenance checks. A checks could be
conducted every 600 hours (previously
500 hours), C checks every 20 months
(previously 15 months) and heavy
checks after six years and 12 years (pre-
viously five and 10 years). Equalised
checks that focus on optimised usage
of each part have also been introduced.
CSA Czech Airlines is an example of
a carrier that has adopted the intervals
offeredby MPD Revision 28 and so far it
is working well for them. At the time the
revision was introduced, the response
was very favourable from airlines. Stu-
art Mann, Airbus director of product
marketing of the A320 family at that time
said: Airlines love the extra flexibility
that MPD 28 gives them and, naturally,
they get the maximum time out of all the
components between overhauls.
A popular maintenance option on
the A320 is the Airbus AIRMAN system,
which allows the aircraft to transmit
faults to the ground during flight. This
software tool enables the necessary
resources and maintenance personnel
to be in place when the aircraft touches
down and thus reduces the time the air-
craft spend not in revenue service.
Although unbundling the checks and
specifying three different usage param-
eters for the individual tasks meant
more flexibility for airlines, it also posed
more challenges. Airbus acknowledged
A320-FAMILY MAINTENANCE:
Airline Economics surveys the best maintenance providers for A320-family aircraft
MAINTENANCE
has grown from five years to six, and the
requirement for structural inspections
has been relaxed from every 10 years
(originally eight) to every 12 years. The
result of that change, according to Air-
bus, was that each operator was able to
optimise the checks intervals according
to its own aircraft utilisation.
The number of landing gear over-
hauls required each year equates to
the number of 10-year-old aircraft in
the fleet. But A320 deliveries are still
accelerating. They climbed dramati-
cally from 168 in 1998 to 222 in 1999, then
stayed in the mid-200s before starting to
climb rapidly again in 2005 to reach 387
in 2008. Although the requirement over
the next five years is relatively stable,
the growth of the overall landing gear
overhaul market has resulted in several
overhaulers of A320 gears such as AFI
KLM E&M, Finnair, Lufthansa Technik
and Turkish Technic to enter the mar-
ket.
Upgrades - Airbus-developed lateral
trim solutions
Airbus is using data from its Produc-
tion Aircraft Test System and additional
problem analysis tools to optimise per-
formance of its A318, A319 and A320
aircraft. Lateral trim solutions devel-
oped by Airbus can decrease possible
drag, reduce fuel consumption and
optimise flight paths for its A318, A319
and A320s.
The project made swift progress
using the data from Airbus Production
Aircraft Test System (PATS) used to
verify aircraft during pre-delivery pro-
cesses along with problem analysis
tools from consultant company Shainin.
As technicians we expected a tech-
nical solution, however Shainin are
statisticians, said Eric Papy of Air-
bus Mise au Point (MAP) design office
representative team in Hamburg,
Germany. They wanted very specific
information from PATS, from measur-
ing aircraft on the final assembly line
and the wings at Broughton. It was sta-
tistical analyses that found the answer.
Shainin devised a mathematical for-
mula for predicting roll values for each
aircraft ahead of its first flight, allowing
the MAP team to make any necessary
adjustments during assembly virtu-
ally eliminating the need for re-flights.
this by introducing standard mainte-
nance packages representing three
common types of aircraft yearly utili-
sation ranging from 1,800 flight hours
annually to more than 3,500. Airlines
were then able to choose the ready-
made solution that corresponded most
closely to their yearly utilisation. Tak-
ing the process further, some operators
have almost eliminated conventional C
checks by following an equalised main-
tenance programme. This programme
distributes traditional A- and C-check
tasks among equal maintenance
packages. Having appliedit while main-
taining the easyJet A320 fleet through
several years of growth, SR Technics
(SRT) says the equalised maintenance
or E check concept reduces aircraft
downtime by a total of 17 days during a
six-year period.
The E checks are sequenced into 36
labour packages, each requiring eight
hours of ground time, which can be per-
formed during a night stop. No C-checks
are required, and the six-year/24,000
flight hour intermediate layover (IL)
check is due around the time of the 36th
E check.
The service package offered by SRT
consists of fleet technical management,
component and parts management,
E-check maintenance management
and line maintenance management.
The maintenance can be conducted at
an SR Technics facility or subcontracted
to the operators selected provider. SRT
says it has cut the average turnaround
time for the IL check, including strip-
ping and repainting of the fuselage and
vertical tail, from 21 to 14 days. We
started together with Airbus to ramp up
the maintenance activity on the A320,
says a source at SR Technics. [This
included] the complete reshaping and
reorganising of the maintenance pro-
gram out of the traditional maintenance
program and into an aquiline mainte-
nance program. After six years we are
doing the E check in Malta but we have
started to do it in Zurich.
Landing gear overhaul
Landing gear overhaul for the A320 fam-
ily is required every 10 years or 20,000
flight cycles, but the fatigue threshold
was increased from 20,000 to 24,000
flight cycles. The zonal check interval
Maintenance cost per hour
Some of the most detailed studies of aircraft main-
tenance costs have been carried out on behalf of
Eurocontrols Performance Review Commission,
which has been working for some years to estab-
lish the marginal costs associated with air traffic
delays. Researchers from Westminster University,
Imperial College, London, and Lufthansa Systems
found that unit maintenance costs, including an
allowance for overheads such as administration
and facilities, equated to approximately 15% of
block hour direct operating costs (DOC).
For the A320, the researchers concluded, mainte-
nance cost per block hour in 2008 ranged between
EUR570 and EUR770 for high and low cost sce-
narios, with a base figure of EUR620. The figures
for the A319 ranged from EUR580-800, with a
base of EUR630, while the A321 base costs were
estimated at EUR720 with a low of EUR660 and a
high of EUR910. For comparison, the equivalent
figures for the Boeing 737-800 were estimated to
range from EUR500 to EUR670, with a base figure
of EUR670.
Global A320 fleet by operator region
Africa: 1%
Middle East: 5%
Americas: 29%
Asia-Pacific: 26%
Europe: 36%
MRO operations, whether airline-affil-
iated, independent or OEM-operated,
have responded to an increasingly
competitive environment by developing
more inclusive services to make fuller
use of their capabilities and resources
while helping their customers contain
costs.
Lufthansa Techniks comprehensive
suite of total support offerings covers
landing gear, engines, components and
material, while overall Total Technical
Support can be combined with Techni-
cal Operations Management and the
management Technical Operations
Websuite.
And at a time when cost control is
more crucial than ever, the company
says its Total Component Support
(TCS) service provides what are nor-
mally mutually exclusive benefits: low
costs, yet with the greater aircraft avail-
ability that normally demands heavy
investment in a big stock of spares.
MAINTENANCE
Middle East, CIS and northern Africa
as well as Turkey itself. The Turkish
Airlines subsidiary is building a new
narrowbody MRO base, the HABOM
AviationMRO Centre at Sabiha Gken
International Airport. The estimated
total investment requirement for the
airframe and component maintenance
centres on the whole is around $500
million. By the year 2020, HABOM is
estimated to generate a $1 billion share
from airframe and component main-
tenance segments. Turkish Technic
will be the permanent shareholder of
the HABOM Project. Turkish Technic
is also aiming to establish these new
investments as an international joint
venture with the participation of a lead-
ing global company or companies. With
this new investment, Istanbul will be the
maintenance hub of the region within a
short time period if all goes to plan. The
airframe maintenance centre facilities
at Sabiha Gken International Airport
will have a total 372,000m2 area. There
will approximately 3,500 employees
within all the maintenance, repair and
overhaul centres which will be estab-
lished within the HABOM Project.
Turkey hopes this impressive base
will become a global MRO hub, but it is
prudent to wonder about the future for
the maintenance market in general. The
current scenario is one of aircraft flying
to bases; having checks performed and
collecting the aircraft all via non-rev-
enue flights. However, with oil prices
above $110 a barrel and Goldman Sachs
urging investors to poor into oil with a
benchmark of $200 by 2015, it is unlikely
that airlines will want to fly aircraft to
distant maintenance centres and will
opt for doorstep services. Such a trend
will play into the hands of Lufthansa and
especially SR Technics as they expand
to become global, independent MROs
through the future slated purchase of
a US MRO supplier, possibly TIMCO.
Given this scenario, it is difficult to see
how the future of very large MRO bases
likethe one being developed at HABOM
can be assured. In the case of HABOM,
this will not be possible without a very
large route hub being created out of
Sabiha Gken International Airport,
which is not likely. But taking into the
account the size of the Middle East fleet
on order, the managers of the HABOM
project are hoping that they will be
well placed to cater to this ever-grow-
ing market. But it is SRT, with its Abu
Dhabi Aircraft Technologies subsidiary,
which seems best positioned to benefit,
and further expansion of this site could
prove highly popular with the airlines of
the Middle East.
This train of thought is backed by Luf-
thansa Techniks Walter Heerdt, senior
vice president marketing & sales. When
asked by Airline Economics why he
thought the LHT network gives them
an edge he said: Lufthansa Techniks
Group network is definitely a big
advantage. The size, geographi-
cal location and capability mix of our
eight overhaul facilities in Europe and
Asia secure that most of the NB and
WB aircraft can be serviced close to
the customers home base. The size of
the network guarantees slot flexibility
and capacity, which enable LHT to offer
base maintenance services to all sizes
of fleets.
He adds: We want to be perceived
by our customers as a reliable next-
door supplier which provides them with
exactly those services they individually
need in the expected quality. I think
that the mixture of our broad service
portfolio, our world-wide network, the
high quality and the motivation of our
employees are guarantees for our suc-
cess.
Lufthansa Technik is continuously
investing in its facilities. Lean manage-
ment, often in joint workshops with the
customer, help to keep costs low or even
drive it down due to smart interface
solutions. The exchange of best prac-
tises within the LHT Base Maintenance
network constantly helps to drive down
ground times, for example just recently
an A319 D-check was completed in 16
days.
The Lufthansa Technik production
processes have been standardized
throughout the facilities by analysing
and optimizing of all production steps
to secure higher efficiency in MRO ser-
vices.
Customers also value the tight
cooperation on base maintenance
procedures as well as on optimizing
of individual maintenance schedules
which lead to MRO cost savings for the
airlines.
LHT says membership of its compo-
nents pool -- the equivalent of being part
of a Boeing and Airbus fleet nearly 400
strong -- reduces operating costs to a
level normally achievable only by oper-
ators of much larger fleets. The service
can be extended to include everything
from writing the specifications, initial
provisioning studies and home base
allocation to repair and overhaul,
troubleshooting, documentation and
engineering services. And it is tailored
to the operatorsspecific requirements.
Dublin Aerospace was awarded
EASA Part 145 approval in October 2009
for its new maintenance and overhaul
operation in the former SR Technics
Hangar 5 at Dublin Airport. Already
offering heavy maintenance on the
A318, A319 and A320 and overhaul, and
major refurbishment of the Honeywell
131-9[A] APU, the company achieved
A320 landing gear capability in 2010.
The company also offers on-wing repair
services, including seal changes and
gear replacement, at any location.
The Aer Lingus A320s that SRT used
to maintain at Dublin are now handled
by Sabena Technics.
SR Technics, the A320 maintenance
leader through their various agree-
ments which include Easyjet and
AirBerlin, has been trying everything it
can to cut turnaround times and costs.
The operation in Zurich has been a
particular headache for the manage-
ment. The buildings and hangers at
the SRT base in Zurich are not owned
but rented. This means that when SRT
came to streamlining its processes,
it had to factor in various building
regulations associated with the lease
agreement and to an extent this has
slowed and amended their progress
as time has passed. Even so SRT has
been able to slash turnaround times
by shifting and amending the layout of
its various workshops, it has put tech-
nicians together with managers and
client account managers, amended
layout in all areas to make the process
seamless and linier and adopted an in
house program for staff and graduates
to develop new practices to help reduce
turnaround times.
Turkish Technic too has been build-
ing up its capabilities in Istanbul;
targeting operators in Europe, the
DATA
0
20
40
60
80
100
120
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012F
A319 AND A320 MARKET VALUES AGAINST 737-700 AND 737-800
B737-700
B737-800
A319-100
A320-200
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
B737-700 B737-800 A319-100 A320-200
Dry Lease Rates for newest aircraft
2010
2011
2012
0
0.05
0.1
0.15
0.2
0.25
0.3
B737-700 B737-800 A319-100 A320-200
Dry Lease Rates for oldest aircraft
2010
2011
2012
Its about a lease that lasts ve years
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Its about more than the plane.
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