Does The A321LR Complicate The ‘Middle of Market’ Aircraft Segment?

One of the most interesting questions now engaging the marketplace for new commercial aircraft is to what extent Airbus’s increasingly successful A321LR version of its new A321neo single-aisle jet will complicate and impact the ‘Middle of Market’ (MOM) or ‘New Midsize Aircraft’ (NMA) concepts discussed and promoted by Boeing.

At July’s Farnborough International Airshow, Boeing announced that a new survey of 377 airlines performed by Aviation Week, Penton Research and Bank of America Merrill Lynch strongly supported Boeing’s own assessment that any new NMA aircraft should seat 200-270 passengers and should have a range with full payload of 4,500nm-5,100nm (8,335km-9,445km). Boeing told Aviation Week & Space Technology that it had based its own NMA specs assessment on input from 30 important carriers.

Boeing’s feeling is that if it decides to develop this aircraft, the design probably would have an elliptical fuselage cross-section in order to provide a twin-aisle cabin layout but offer single-aisle seat economics. In Boeing’s view, any NMA it might design – the manufacturer aiming to put the aircraft into service in 2024 or 2025 – would be a bit bigger than today’s 757, but a bit smaller than its 767 family, or at least the 767-300ER, the highest-selling version of the 35-year-old 767 family.

However, hard evidence – in the form of airlines and leasing companies placing orders for or publicly expressing strong interest in the aircraft – is growing that, at the bottom end of Boeing’s hoped-for NMA market, the A321LR version of the Airbus A321neo could carve out a respectable chunk of the market before Boeing decides to launch any NMA programme.

Able to carry from 180 to more than 200 passengers in reasonable two-class or single-class comfort on routes of 4,000nm – in other words, offering ample range to operate most transatlantic routes between Western Europe and Eastern North America – the A321LR is winning a rapidly growing fan base.

When Airbus launched the A321LR in January 2015, the critical launch commitment didn’t come from an airline. Significantly, the first customer for the A321LR was Air Lease Corporation (ALC), the Los Angeles-based leasing company headed by Steven F. Udvar-Házy. He is universally recognised, along with Emirates’ Sir Tim Clark, as one of the world’s two most influential aircraft customers in terms of defining the designs and specifications of new Western-built commercial aircraft.

ALC signed a memorandum of understanding for 30 A321LRs, surprising some in the industry, but it wasn’t long before ALC’s assessment of the A321LR’s market potential was borne out by growing airline interest in the aircraft.

Over the past 20 months, concrete airline belief in the A321LR has come in the form of firm orders from TAP Portugal, Norwegian Air Shuttle and – going by the carrier’s statement of intent regarding a recent 15-aircraft increase in its A321neo order backlog – JetBlue Airways. All have indicated they think the A321LR will help them grow – or in JetBlue’s case launch – their networks of transatlantic services.

More recently, on July 29, International Airlines Group (IAG) CEO Willie Walsh said at a briefing for investors that the group saw considerable potential in the A321LR, the type particularly representing a “fantastic opportunity” for IAG’s new subsidiary Aer Lingus to expand its transatlantic network to additional destinations in the USA.

Walsh told IAG investors the group was “actively considering” ordering the A321LR – a move which would surprise almost no-one given that IAG already has placed substantial orders for A320neo-family aircraft for its other airline subsidiaries.

The big question for Boeing now is, how many other airlines already operating transatlantic route networks, or considering doing so, are likely to follow in these carriers’ footsteps? The answer might be, quite a few. If most potential customers for the A321LR do decide to order the type, then that could cut substantially into potential sales of Boeing’s eventual NMA design.

Boeing may be kicking itself. Airbus might never have decided to develop the A321LR had Boeing decided to keep the 757 in production.

When 757 sales slowed to a trickle in the early years of this century, Boeing quickly decided to end 757 production, the last new aircraft rolling off the line in 2006.

However, Boeing made that fateful decision not knowing that, a year or two later, major airlines would find a new way to use the superb capabilities of the 757, by operating later-model examples on transatlantic routes either linking secondary markets or replacing larger aircraft on off-peak flights in major markets.

The result is that, today, America’s big three carriers – American Airlines, Delta and United – are all operating sizeable specialist fleets of ETOPS-rated 757s on transatlantic routes, and doing so very successfully. However, the 757, which first flew in February 1982, is increasingly regarded as an ageing aircraft and is now 10 years out of production and its days as a mainline type in daily transatlantic service probably are numbered,

Since American and Delta already have very large orders outstanding for A321s and A321neos, it is not at all unlikely that those two airlines may decide to specify some of their A321s as A321LRs, or perhaps even order additional A321 batches, specifying the longer-haul model. In such an event, the new competition posed by American’s and Delta’s A321LRs could persuade United to order the type too for transatlantic operations.

Another danger for Boeing is that many airlines which today don’t operate A321s – or which operate them on much shorter-haul routes – might decide the A321LR represents a viable, reliable and relatively inexpensive way to launch or bolster transatlantic or other long-haul networks.

Carriers such as SAS, Lufthansa/Eurowings, Airberlin, Swiss International Air Lines, Austrian, Thomas Cook, Aigle Azur, Spirit Airlines, Wow, Mexico’s three feisty low-cost carriers and many more besides could all decide the A321LR made sense for them.

One possibility for the Seattle-based manufacturer to offer a competitor to the A321LR in the short term might be for Boeing to proceed with development of its recently mooted 737 MAX 10. However, this would require fairly considerable development investment in order to accommodate longer landing gears, a longer fuselage and larger fan-diameter engines.

Ironically for Boeing, its best answer to the A321LR as an NMA transatlantic competitor available in the short term might be one the manufacturer put on the shelf – probably permanently – a few years ago without making any contingency plans to resurrect a minor development of it.

Boeing envisaged its originally proposed 787-3 as a low-weight, 3,000nm-3,500nm-range version of the 787-8 – an aircraft which now has stopped selling as the larger 787-9 has hit the sales ‘sweet spot’.

Although the 787-3’s original range capability falls well short of what any airline would receive from an A321LR or want from an NMA it might not be a huge design task or require vast development investment for Boeing to dust off the 787-3 design and give it another 1,000nm-1,500nm of range.

Voila! That could provide a nice 200-270-seat, twin-aisle NMA design featuring the latest-generation technology in materials, aerodynamics, engine design and cabin comfort, all for much less than the cost of a 787-8. The aircraft would be rather and more expensive than the A321LR, but it would offer good seat economics and might quickly become a favourite with transatlantic passengers.

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