Boeing provides a glimpse at potential ‘797’ middle of the market solution; a ‘big niche’ of potentially up to 4,000 airliners

21 June, 2017

There has been much debate over the past couple of years of the potential need for a middle of the market aeroplane to replace the Boeing 757 and 767. While the 787 and Airbus A330neo and A350 have partly filled this void and the extension of single-aisle families has clearly encroached on this marketplace, the US manufacturer is showing the strongest signs yet there could be a need for a purpose-designed modern-generation airliner to sit between its 737MAX and 787 families. And that comes despite it making a further stretch to the 737 with the launch of the MAX-10 variant at the Paris Air Show this week.

In its annual update to its Current Market Outlook (CMO), Boeing has boosted anticipated new aircraft demand over the forthcoming 20 years by a 3.6% since last year, projecting a need for 41,030 new aeroplanes over the next 20 years, valued at $6.1 trillion dollars. Like Airbus, the US manufacturer says the single-aisle segment will see the most growth over the forecast, fuelled by low-cost carriers and emerging markets. It predicts a need for 29,530 new jets in this segment, an increase of almost 5% over last year.

Interestingly, Boeing's CMO highlights a need for around 5,050 "small widebody" aircraft between now and 2036, a $1.3 billion segment hitting the 200-300 seat category. This could include as many as 4,000 aircraft that could hit the sweet spot of any middle of the market solution. In fact the manufacturer even included a ghost aircraft sitting between the 737 and 787 in a presentation at the Paris Air Show.

Although Boeing officially remains tight-lipped on the project, it is known to have sounded out the idea of the '797' project with over 50 customers: a 220-260-seat aircraft with a range of around 5,200 nautical miles and a 10-hour flight envelope for entry into service from 2025.

Industry sources have suggested to The Blue Swan Daily that the manufacturer has received a "warm response from the airline community" to its proposal, but remains "cautious on taking the final step". It is said to be planning two versions: a smaller variant that can fly a longer distance and a larger version with a reduced range.

Stretching single-aisle flying to the MAX

The new 737MAX-10 will quite clearly go some way to appeasing some of the airlines looking at that middle of the market space. The aircraft has already gained wide market acceptance with more than 240 orders and commitments secured from more than 10 customers worldwide and will, according to Boeing, offer the lowest seat-mile cost of any single-aisle airplane ever produced with 5% lower trip costs and 5% lower seat-mile costs than the competition.

Design changes for the 737 MAX-10 include a fuselage stretch of 66 inches compared to the 737 MAX-9 and a levered main landing gear. Other changes include a variable exit limit rating mid-exit door, a lighter flat aft pressure bulkhead and a modified wing for low speed drag reduction. The extension will boost capacity to 230 seats in an all-Economy layout, ten more than the MAX-9, albeit its range will be clipped from 3,515 nautical miles (6,510km) to 3,215 nautical miles (5,960km).

"Airlines wanted a larger, better option in the large single-aisle segment with the operating advantages of the 737 MAX family," says Kevin McAllister, president and chief executive officer, Boeing Commercial Airplanes. "Adding the 737 MAX-10 gives our customers the most flexibility in the market, providing their fleets the range capability, fuel efficiency and unsurpassed reliability that the 737 MAX family is widely known for."

Boeing is still confirming the initial customer base for the aircraft, but this includes a major commitment from US major United Airlines which has switched 100 current MAX orders to the new variant for delivery from late 2020. "The 737 MAX-10 will enable us to continue using larger and more efficient aircraft within our domestic network and better meet the needs of our customers today and into the future," says Andrew Levy, executive vice president and chief financial officer, United Airlines.

Other confirmed airline customers for the MAX-10 include Copa Airlines, Donghai Airlines, Lion Air Group, Malaysia Airlines, Okay Airlines, SpiceJet, TUI Group and Xiamen Airlines, while lessors Aviation Capital Group, BOC Aviation, CDB Aviation, China Aircraft Leasing Group, GE Capital Aviation Services (GECAS) and Tibet Financial Leasing have signed-up to the project.

Finally a replacement for the venerable 757?

According to CAPA Fleets, United Airlines, together with other US majors Delta Air Lines and American Airlines are the three largest remaining operators of the passenger version of the 757 flying over 250 aircraft between them and are seen as strong potential customers for any middle of the market aircraft.

This month's OAG flight schedules show 27 published airlines are operating scheduled 757 flights this month offering a total of almost 29,000 departures, approaching 1,000 a day. The type is being used on approximately 1,200 city pairs this month with its largest operations from Atlanta, Los Angeles, San Francisco, Keflavik (Iceland), Newark, New York, Minneapolis, Chicago, Miami and Manchester (UK).

CHART - The World's Longest Scheduled Boeing 757 Flights (June 2017)Source: CAPA - Centre for Aviation and OAG Schedules Analyser

CHART - The World's Shortest Scheduled Boeing 757 Flights (June 2017)Source: CAPA - Centre for Aviation and OAG Schedules Analyser

This list highlights the important role the aircraft continues to play in the US market, serving not just transcontinental domestic markets but also on routes to Hawaii and across the Atlantic into Europe.

Delta Air Lines is the largest operator of the type (37.4% share of June 2017 frequencies), followed by United Airlines (18.0 per cent share) and American Airlines (12.3 per cent share). The performance of the aircraft makes it ideal to support Icelandair's hub strategy at Keflavik International Airport with the range to serve both the US and European markets efficiently and the flag carrier is the largest operator of the 757 outside of the US, ahead of European leisure providers Thomson Airways, and Condor.