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Getting Middle Of The Market Assets Right

Mid-life assets and mid-size airframes are both hot topics in the aviation industry.

Printed headline: Meet in the Middle

How often is the middle praised? How often do you hear, “I strive to be a middle manager for my entire career”? If you run a race, do you want to finish in the middle of the pack? “Middle children” often complain of being sandwiched between siblings. When you’re taking a test, do you strive to finish in the middle of the bell curve with an average score?

I bring this up for two reasons. Inside MRO's cover package tackles two middle-market hot topics: midlife aircraft and mid-size airframes (page MRO 15). In both cases, the market is keenly interested in the middle.

Take popular midlife engine assets such as the CFM56-5B/7B and V2500. If you own those engines with midlife cycles and clean service histories, you possess valuable assets. Bidding wars occur daily because there is demand from operators to fly them and from the aftermarket to tear them down for used serviceable material.

Strong passenger demand and low fuel prices in the past few years, coupled with delivery delays for new aircraft programs, make these reliable, midlife workhorses very much in demand.

The other “middle” in this issue, mid-size aircraft, face a challenge from both design and timing, given that the Boeing 757 can’t operate forever. While the longest-range Airbus A321neo and Boeing 737 MAX stretch to the low- to mid-end of the midsize aircraft market, the aviation industry is waiting to see what Boeing decides to do with the new midsize airplane (NMA), which is pegged to have a seating capacity of 220 to 270 with a range of about 5,000 nm.

“It’s a market that needs the efficiency and turn times of a widebody airplane and the economics of a narrowbody,” summed up Boeing CEO Dennis Muilenburg in a recent interview with Aviation Week.

While talking with Stan Deal, Boeing Global Services president, CEO and executive vice president of the Boeing Co. on June 27, for this issue on (page MRO 32), he said the company is simultaneously considering design and life-cycle considerations for the NMA, with tradeoffs coming from both sides. He wouldn’t share details of either but did say: “The discussions at the table with customers are about life cycle as much as they are about what the airplane can do in terms of fundamentals like fuel burn and payload range. We’re putting a great focus on the overall life cycle.”

The importance of these tradeoffs can’t be taken lightly because the NMA is sandwiched in the middle of the market, and if it feels anything like being wedged into a middle aircraft seat in the back of economy, it is not going to be popular. 

Besides having a fresh design/life cycle approach to this clean-sheet aircraft, Boeing plans to use a Connected Factory concept for the NMA. When I spoke with Deal in March, he said Boeing was “60% down that journey” and working to get to 100% for the NMA. “That will be as transformative for the company as the product,” said Deal.

We are in transformative times

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