COMPARING 757 REPLACEMENTS A321neo vs 737-900ER

July 2011

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INTRODUCTION The Boeing 757 occupies a unique market niche at the top end of the narrow-body market. With a two-class capacity of 189 seats, and a 3,900 mile nautical mile range, this aircraft was once a staple of the transcontinental US market and, following the addition of winglets, has carved out a niche on flights from the US East Coast to non-hub European destinations. The 757 has largely been replaced on US trans-con routes by the Boeing 737-800, a somewhat smaller aircraft that is less costly to operate and much less expensive to purchase when both aircraft were in production.

Produced from 1982-2004, many of the 1,049 757s produced are nearing retirement, and with no direct successor in sight, the question of which of today’s narrow-body alternatives can best fill its mission requirements is a critical question as airlines consider alternatives. The contenders in the market today are the Airbus A321neo and the Boeing 737-900ER. In this report, we compare the two aircraft, analyze their mission capabilities, and compare their advantages and disadvantages. Neither of these aircraft has the payload/range capabilities of the 757, which can handle trans-Atlantic flights of 3,900nm with a full passenger and cargo load. Which of the two aircraft comes closest to meeting airline requirements for replacing the 757, and how do they compare, is the focus of this study.

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THE BOEING 737-900ER The newest version of the 737NG series, the 737-900ER, entered service in 2007. Derived from the 737-900, and with an identical cabin, this aircraft seats 180 in typical two class configuration or 215 using a single class of service. The ER version of the -900 offers several improvements over the -800, including an extra pair of exit doors aft of the wings, a stronger wing and aerodynamic improvements to leading and trailing edge flap systems. These improvements increase the range of the aircraft to 3,265 nautical miles with winglets and optional fuel tanks. The 737-900 was initially introduced with the major revision of the 737 from the classic 737s to the next generation (NG) series that entered service in 1998. While the fuselage and basic design of the 737, first introduced in 1967, were retained, over 80% of the components of the aircraft are new - making this aircraft quite different, and nearly twice as large as the earliest 737s.

THE AIRBUS A321 AND 321NEO Airbus announced a re-engining program for its popular A320 family in December 2010, and the A321 new engine option (neo) is to enter service in 2016. Initially introduced in 1994, the A321 (top picture) is a stretch and largest of the A320 family seating 185 in two class configuration and 220 in single class configuration. The new engine option promises a 15% reduction in fuel consumption, which will favorably impact payload range, enabling the A321neo (lower picture) to operate routes of up to 3,680 nautical miles. The A321neo will remain similar to the A321 in configuration, except for the engines, with 95% component commonality. The new engine technology for the A321neo, the Pratt & Whitney geared turbofan and CFM LEAP engine replaces the IAE V2500 or CFM-56-5B currently installed on the A321.

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COMPARATIVE SPECIFICATIONS The 737-900ER and A321neo represent the largest narrow-body aircraft currently in production. Each falls slightly short of the Boeing 757, which, as a large narrow-body, occupied a unique market niche. The majority of the 757 production was for the -200 model rather than the stretched -300 model, which was introduced near the end of production and achieved only limited market success (55 delivered). The 757-300, with 243 dual and up to 289 single class seats is a larger aircraft that will likely be replaced by the 787-8. The 757-200 is a larger aircraft than either of its proposed replacements, with longer range and the capacity for a few more passengers. In examining the table below, it appears that the A321 and A321neo are closer to being a 757-200 replacement than the 737-900ER in a number of categories. The A321 and A321neo appear to have a significant advantage over the 737-900ER as the Airbus models appear closer to the specifications and capabilities of the 757-200W (winglet) as a potential replacement aircraft.

Specification 757-200W 737-900ER A321 A321neo Advantage Capacity - dual

class 186 180 185 185 Airbus

Capacity - single class 220 215 220 220 Airbus

Range in NM 3,900 3,265 3,200 3,680 Airbus Cabin Width-ft. 11.6 11.6 12.1 12.1 Airbus

MTOW 255,000 187,700 206,100 209,100 Boeing MLW 210,000 157,300 171,500 174,500 Boeing

Engines RB211-535E4 PW4000 CFM-56-7 V2500A5

CFM56-5B PW1100G CFM LEAP Airbus

We give Boeing the advantage in MTOW and MLW vs. the A321/321neo because a lighter airplane provides lower operating costs and lower landing fees. We recognize that an argument may be made that higher weights often are tied to longer ranges and, in the case of Airbus, the wider fuselage for passenger comfort and five more passengers. Even considering these factors, we nonetheless give the “advantage” to Boeing in these categories.

Capacity In normal seating configurations, the A321 is closer to the 757 in capacity, albeit there are some high density 757 configurations with minimal seat pitch up to 234 seats in a single class configuration. With a five seat advantage over the 737-900ER, the capacity nod goes to the A321 and A321neo.

Range While neither can match the 3,900nm range of the 757-200, the A321neo comes significantly closer in range than either the 737-900ER or A321. The A321neo can

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operate many trans-Atlantic routes, while the 737-900ER and A321 cannot operate across the pond year round. For carriers that operate 757-200s to smaller international destinations, this could be a differentiating factor, although the A321neo may have difficulties against strong headwinds to some destinations. The following charts show comparative range for each aircraft:

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COMPARATIVE ECONOMICS The 737-900ER, in economic terms, lies between the A321 and A321neo in seat-mile as well as in aircraft mile operating economics, all of which are lower than the 757-200.

• Boeing claims the 737-900ER is 4% better than the A321 on a seat-mile basis and 6% better on an aircraft mile basis.1

• Airbus claims the A321neo is 20% better in fuel burn than the 737-900ER on a seat mile basis and 14% better on an aircraft mile basis.2

Our independent analysis, using the PW1100G for the A321neo, provides the following results based on a 1,500nm segment using the best “apples-to-apples” comparisons that we could develop given the preliminary nature of specifications for the A321neo:

These results are graphically shown on the following chart. In developing our estimates, we utilized Form 41 data, information from Boeing, Airbus, CFM International, IAE, and Pratt & Whitney, and information from airlines. Our comparison is of operating economics, including fuel cost, airframe maintenance, engine maintenance, crew costs, and landing fees. We do not include capital cost and related cost of ownership for the aircraft. We have specifically excluded European carbon trading fees, as these will not be globally applicable.

1 http://www.boeing.com/commercial/737family/pf/pf_900ER_back.html; assumptions are not revealed on the website and Boeing tells AirInsight the website is somewhat out of date. Boeing tells us: “The Airbus numbers you quote are fuel burn numbers. Economic rule sets do not impact fuel burn, but mission length and seat configuration does. Fuel differences between two-class configurations of the 900ER and today’s A321 (no winglets nor new engine) = 11.3% difference in trip fuel and 9.5% difference on seat-mile fuel for a 500 nm mission. (This uses Boeing rules for equivalent comfort two-class interiors: 900ER with 180 seats, A321 with 183).” AirInsight’s assumptions, described above, attempt to provide independent and consistent parameters (Pages 4 and 6). 2 Airbus assumptions: 800nm, A321neo with 185 seats two-class, 737-900ER 173 seats two-class.

Aircraft Cost per Seat Mile 

Savings vs. 757 CASM 

 

Cost per Aircraft Mile 

Savings vs. 757 per Aircraft Mile 

757‐200  $0.0593  Base  $12.98  Base 737‐900ER  $0.0505  14.8%  $10.70  17.5% 

A321(CFM)  $0.0516  12.9%  $11.24  13.4% 

A321neo (PW)  $0.0448  24.5%  $9.74  24.7% 

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CONCLUSION The A321neo comes closest in capabilities to replacing the 757-200, but falls short in capacity and range. The 737-900ER falls further short in range, and is unable to operate transatlantic services between the eastern US and western European destinations. From an economic standpoint, the current 737-900ER has a slight advantage over the current A321, but this will be significantly eclipsed by the A321neo, which offers a significant reduction in operating economics. Therefore, of the current narrow-body choices, we rank the A321neo as the best current choice as replacement for the Boeing 757-200.

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AirInsight Boston, Seattle, Washington http://www.airinsight.com 

     Ernest Arvai  +1.603.894.0000 earvai@arvaigroup.com    Scott Hamilton  +1.425.392.1160 scott@leeham.net Addison Schonland  +1.858.536.9900 aschonland@iag‐inc.com