Waterbomber wrote:

Japan would also never sell the MRJ program. Too much pride involved and think of the MRJ not as a final goal, but a foot in the door for the Japanese.
Boeing didn't give Japan a huge workshare on the B777X even back in the days that they took a JAL order for granted, and who knows how much workshare will be give to Japan on the MOM or Y3. The Japanese industry also suffered a lot under the B787 program's mismanagement on the Boeing side, so yes they are now harvesting the fruits on the B787 program, but it costed a lot of lost revenue, delayed payments, excess cost, as well as patience and self-control.
Japan has the industrial capacity and the capital to go after A & B in the narrowbody market, should it so decide.

I can see a Boeing-Embraer JV on the E2.
As someone mentionned earlier, Embraer could need a partner as the E2 isn't very successful.
They can keep building it in Brazil at lower cost, and Boeing can start offering package deals to airlines.

How about a re-engined, rebranded SSJ100. It was a Boeing managed program with almost all western content. It is also most mature modern RJ with a good number of in-service frames. Strap on GE/PW Engines and call it BRJ100.

I don't clearly see the advantages for Embraer of such a deal.

Unless Boeing commits to e.g. a 30% share & FAL for an 737 replacing NSA.

This deal would help sell more ERJ-190/195E2s, especially from loyal Boeing customers like UA who are in need of a 100 seat mainline jet. The pilot contract at UA allows them to add 70 additional 75 seat ERJ-175s for their regional partners if they order 88 100 seaters for mainline. Seems like a potential huge win for Embraer.

RWA380 wrote:

Jerry123 wrote:

PPVRA wrote:

I think it would make sense to replace the 737 with a slightly bigger model and have embraer simultaneously develop a mini-737 to compete with the CSeries. Design commonalities like the cockpit could offer synergies between both models, if not outright sharing one type rating. If the 757 and 767 can do it, then you can probably do it on the 737/mini737 side as well.

Not sure an outright purchase is necessary or likely to happen, though.

Why would Embraer develop a mini 737 when they already have a proven product with their E jets?

I have been thinking about this & there is indeed a market for a 2 cabin, 100-150 passenger jet with good field performance & a 3000 mi range. I can see carriers like UA & AS using them for thinner routes from PDX, SFO & SEA, like SEA-BDL, SFO-RIC or PDX-BNA, (only for examples, no need to debate the O/D in each market or it's merits within a specific carriers route structure).

How much of a market there is, I do not have any idea, but I do see at least a few airlines would possibly want these capabilities. I suspect HA could use them as well, if they can obtain ETOPS certification, for routes to FAT, EUG, SNA or BUR, again field performance is key here for this level of flying.

For AA with two huge mid-continent hubs, I suspect the aircraft I've described, may not have as much purpose except maybe from LAX.

And lastly, the aircraft doesn't have to stretch it's legs every flight, these would be good for short & mid-continent flying where the current E-175's are not big enough for the current demand, but a 737 is still too big.

With relation to FAT, EUG, and airports of those categories (facilities big enough for even an A330, not enough demand), I don't doubt that an E-Jet could be built and certified to fly to Hawaii from these and other smaller West Coast markets, but I do doubt whether an E-Jet could be build that can produce enough yield with so few seats to make Hawaii economically viable from smaller West Coast markets. I think the A321 and 737s are many markets' best hopes, probably by offering a couple non-stop flights per week and then relying on connections through other hubs (like AS in SEA or PDX) or a code-share (like HA and AA in LAX) for covering other, less busy days. I also think that some west coast markets could still be "developed." Right now, very few people would consider driving to FAT from Bakersfield, Modesto, San Luis Obispo, and points in between to get to Hawaii; they all drive to LAX or one of the Bay Area airports (including SMF). However, I think there is enough catchment in that area and FAT is close and convenient enough that it could support a few flights per week to Hawaii (maybe more) if it was actually capitalizing on that whole area.

Look at what happened with flights to Mexico: that entire area is easily part of FAT's catchment area for GDL and MLM, and capacity has risen to as many as 4 flights per night across the border because of it.

EUG is much the same; from Albany to Bend (ok, not the best drive in the dead of winter, most would probably opt to fly out of RDM, but maybe a few would drive) to Medford, EUG could also "develop" flights to Hawaii as well.

As for airports with enough demand but short runways (such as BUR and SNA), perhaps you could charge a premium to fly non-stop (and not sit in traffic) on a smaller a/c like an E-jet and command the yield to make it financially viable.

Jerry123 wrote:

Boeing themselves would say the MAX 7 would cover that market.

scbriml wrote:

It does, but nobody's buying it.

Was that an accidental or a deliberate double-entendre? Either way it slipped under most people's radar. Shame.

dtw2hyd wrote:

Waterbomber wrote:

Japan would also never sell the MRJ program. Too much pride involved and think of the MRJ not as a final goal, but a foot in the door for the Japanese.
Boeing didn't give Japan a huge workshare on the B777X even back in the days that they took a JAL order for granted, and who knows how much workshare will be give to Japan on the MOM or Y3. The Japanese industry also suffered a lot under the B787 program's mismanagement on the Boeing side, so yes they are now harvesting the fruits on the B787 program, but it costed a lot of lost revenue, delayed payments, excess cost, as well as patience and self-control.
Japan has the industrial capacity and the capital to go after A & B in the narrowbody market, should it so decide.

I can see a Boeing-Embraer JV on the E2.
As someone mentionned earlier, Embraer could need a partner as the E2 isn't very successful.
They can keep building it in Brazil at lower cost, and Boeing can start offering package deals to airlines.

How about a re-engined, rebranded SSJ100. It was a Boeing managed program with almost all western content. It is also most mature modern RJ with a good number of in-service frames. Strap on GE/PW Engines and call it BRJ100.

That's what surprises me about this, why didnt Boeing go with them. They could just re-engine the plane and you have a competitor to CS100.

SSJ is a very different animal to anything Boeing builds... plus dealing with a takeover of anything in Russia is a headache and a half

The MRJ would be a better option if they wanted to follow that path...

I have tried to compile a list that makes it possible to equally compare the size of the single aisle aircraft. If all the models/variants are configured in a single class layout with slimline seats @ 30 pitch, the number of seats should be close to this:

E175-E2: 88 seats
E190-E2: 108 seats
CS100: 125 seats
E195-E2: 138 seats
CS300: 150 seats
A319:156 seats (with space-flex)
B737-7: 168 seats (note that the -7 MAX is larger than the -700)
A320: 186 seats (with space-flex)
B737-8: 189 seats (at exit limit)
B737-9: 204 seats
B737-10: 216 seats
A321: 228 seats (with space-flex and AFC)

(Note that the numbers are rounded off. Some variants will have a few rows @29 pitch, while others will have a few rows @31 pitch.)

I find it had to believe that anyone can say that the CS100 competes with the 737-7 MAX. These are very different aircraft.

If we in the future will have Airbus+Bombardier vs Boeing+Embraer, the A319 will have to go. It is to close to the CS300 in both size and range. The 737-7 isn't selling, so Boeing will still have a significant gap between the E195-E2 and the 737-8, both in size and range capabilities.

reidar76 wrote:

I have tried to compile a list that makes it possible to equally compare the size of the single aisle aircraft. If all the models/variants are configured in a single class layout with slimline seats @ 30 pitch, the number of seats should be close to this:

E175-E2: 88 seats
E190-E2: 108 seats
CS100: 125 seats
E195-E2: 138 seats
CS300: 150 seats
A319:156 seats (with space-flex)
B737-7: 168 seats (note that the -7 MAX is larger than the -700)
A320: 186 seats (with space-flex)
B737-8: 189 seats (at exit limit)
B737-9: 204 seats
B737-10: 216 seats
A321: 228 seats (with space-flex and AFC)

(Note that the numbers are rounded off. Some variants will have a few rows @29 pitch, while others will have a few rows @31 pitch.)

Seem reasonable numbers to me.

What does a 717NG with ventral stairs do to Boeing lineup in the -32series offering? 125-135Y ..... Do not reinvent the wheel

flyingclrs727 wrote:

Boeing needs a 100-160 seat narrow body that can compete with the Bombardier/Airbus C-Series. I wish Southwest would sign up as a launch customer. Their fleet no longer has anything with the passenger count of a 737-200. For years that was the only plane they had in their fleet. Now the smallest planes in their fleet is 143 seats and the smallest planes they have on order have 150 seats. There are lots of smaller markets that can't sustain service with the size of Southwest's planes. I rarely get to fly out of my home airport of CRP on WN, because most of their destinations are not available or their prices are generally higher (but not all) than flying from SAT, AUS, or HOU. Having smaller planes to allow frequencies out of smaller market airports would allow better service.

WN doesn't need a plane of 737 200 . Their market has changed, they have more long haul passengers than short haul passengers and flying bigger planes makes sense now

Subu

Boeing is committed to growing their services business dramatically over the next 10 years. That's a pretty obvious motivation, I believe, for pursuing a partnership/acquisition with Embraer (but not the C-series Aircraft Program, which has something like a global fleet of 25 planes).

Boeing certainly also has the free cash flow to do this (and pay for it up front or over a few years).

Airbus/Pratt alike are not particularly interested in locking in services agreements long term (nor, obviously, is Rolls). It's a divergence in the two prime aircraft OEM's market/revenue focus over the next decade, I think, which is also reflected in their engine vendors of choice, 100 seater partner courtships, and even the DAL A320 decision this month.

I believe Airbus has real pending leadership/fraud issues they are grappling with and so the 'free' C-series partnership made a lot of sense to their strategy, while Boeing is playing at a different game with a different MoM/NSA strategy in conjunction with it's services goals.

This thread has countless examples of how people love narratives.

When it comes to facts, we know the Brazilian Government can and will prevent Boeing from taking a controlling interest in EMB, so at best this becomes a broader partnership than the one that already exists.

Which is totally different than the Airbus-BBD deal, wherein Airbus will immediately get controlling interest and the majority of the board, and can chose to buy out BBD 7.5 years after it closes (call option) or BBD can make Airbus buy out the partnership 7.5 years after it closes (put option), all at 'fair market' prices.

My best guess is that we will not see a much more significant Boeing-EMB partnership, simply because EMB doesn't want to get bought and Boeing (still) doesn't think much of the 100 seat market. We might see a sales/support partnership that might eventually lead to something bigger if it becomes clear the market is a lot bigger than Boeing now thinks it is and if Brazil finds a way to justify selling a controlling interest in BBD.

I have no idea why people think Boeing would give away the 737 market to EMB just to focus on NMA. The 737 market is a big profit engine and it'd make no sense to give that over to a company they don't control.

texl1649 wrote:

Boeing is committed to growing their services business dramatically over the next 10 years. That's a pretty obvious motivation, I believe, for pursuing a partnership/acquisition with Embraer (but not the C-series Aircraft Program, which has something like a global fleet of 25 planes).

Boeing certainly also has the free cash flow to do this (and pay for it up front or over a few years).

Airbus/Pratt alike are not particularly interested in locking in services agreements long term (nor, obviously, is Rolls). It's a divergence in the two prime aircraft OEM's market/revenue focus over the next decade, I think, which is also reflected in their engine vendors of choice, 100 seater partner courtships, and even the DAL A320 decision this month.

I believe Airbus has real pending leadership/fraud issues they are grappling with and so the 'free' C-series partnership made a lot of sense to their strategy, while Boeing is playing at a different game with a different MoM/NSA strategy in conjunction with it's services goals.

Excellent post. We tend to focus far too much on aircraft sales. While aircraft sale are an obvious part of any growth plan services are where the large profits are delivered. You see this in many industries today. Boeing's 10 year plan is very aggressive, and I can see Boeing's interest. Your other point on the unresolved legal issues with Airbus is another 800lb Gorilla in the room that tends to be forgotten in here.

Revelation wrote:

and if Brazil finds a way to justify selling a controlling interest in BBD.

That seems, shall we say, unlikely.

northstardc4m wrote:

SSJ is a very different animal to anything Boeing builds... plus dealing with a takeover of anything in Russia is a headache and a half

The MRJ would be a better option if they wanted to follow that path...

Not really, Alenia Aermacchi(Leanordo/Finmeccanica) is (or was) a strategic partner of SSJ100. Boeing can just buy its stake. Although being a Russian brand SSJ has a stigma attached to it.

Buying MRJ means dealing with cultural issues. I am not sure Boeing will be willing to take that path after 787.

dtw2hyd wrote:

northstardc4m wrote:

SSJ is a very different animal to anything Boeing builds... plus dealing with a takeover of anything in Russia is a headache and a half

The MRJ would be a better option if they wanted to follow that path...

Not really, Alenia Aermacchi(Leanordo/Finmeccanica) is (or was) a strategic partner of SSJ100. Boeing can just buy its stake. Although being a Russian brand SSJ has a stigma attached to it.

Buying MRJ means dealing with cultural issues. I am not sure Boeing will be willing to take that path after 787.

Nearly everything Superjet related is manufactured in Russia/s sphere (frame, engines, most of the avionics)

This makes it much more "Alien" to the Boeing supply stream than the ERJ, MRJ or anything else. It would be a useless buy in and a very at risk one anytime politics between Russia and the US flare.

Embraer is not in problems and not for sale.

So Boeing should offer something long term, great, endorsing Brazilian Aerospace Development and jobs.

A 30% NSA production share and Brasilian assembly line seems a good start for negotiations.

Revelation wrote:

This thread has countless examples of how people love narratives.

When it comes to facts, we know the Brazilian Government can and will prevent Boeing from taking a controlling interest in EMB, so at best this becomes a broader partnership than the one that already exists.

Which is totally different than the Airbus-BBD deal, wherein Airbus will immediately get controlling interest and the majority of the board, and can chose to buy out BBD 7.5 years after it closes (call option) or BBD can make Airbus buy out the partnership 7.5 years after it closes (put option), all at 'fair market' prices.

My best guess is that we will not see a much more significant Boeing-EMB partnership, simply because EMB doesn't want to get bought and Boeing (still) doesn't think much of the 100 seat market. We might see a sales/support partnership that might eventually lead to something bigger if it becomes clear the market is a lot bigger than Boeing now thinks it is and if Brazil finds a way to justify selling a controlling interest in BBD.

I have no idea why people think Boeing would give away the 737 market to EMB just to focus on NMA. The 737 market is a big profit engine and it'd make no sense to give that over to a company they don't control.

It’s acuslly not all that different than Airbus-BBD. Airbus has a controlling interest in a JV between the two companies, not on BBD itself.

What Boeing is looking for in Embraer is much deeper than merely a controlling stake in one aircraft program. This, in my opinion, is evidence that what Boeing wants has nothing to do with the E2s, but rather with things to come in the future.

What I think A and B see is the gaping hole left by the MadDogs and 737 Classic—smaller than the A320/737NG and lighter, with less range optimized for subtranscon flights. Yes, that means overlap with the 737/320 lines, but it’s either you accept the overlap or competition will take care of those customers.

What makes more sense to me is for B to replace the 737, and in a JV with Embraer build a clean sheet 737lite with some commonalities, like Boeing’s cockpit. But to do this, I can see Boeing wanting more than just a 50-50 JV, so we’ll see...

cledaybuck wrote:

Revelation wrote:

and if Brazil finds a way to justify selling a controlling interest in BBD.

That seems, shall we say, unlikely.

Thanks for the correction, albeit a snarky one.

Embraer wouldn't be the first airliner manufacture that Boeing has invested in.

In a notable irony with the Bombardier dispute - Boeing once owned De Havilland Canada which built the DHC Dash-8 now owned by Bombardier.

https://en.wikipedia.org/wiki/De_Havilland_Canada#de_Havilland_Canada_transformation

Airbus sold their share in Embraer a while ago.

Latest headlines in Brazil:

Brazilian President Michel Temer praises Embraer-Boeing deal, but says transferring control to Boeing is out of the question.

Founder of Embraer, Mr. Ozires Silva says there is not a takeover negotiation going on. What is being negotiated is a partnership agreement.

Boeing can buy only 35% of Embraer shares, the maximum allowed without requiring permission from Brazilian government.

Boeing-Embraer deal: Merger or joint venture likely. Takeover unlikely, concludes american financial company Cowen

http://agenciabrasil.ebc.com.br/politic ... -diz-temer
http://www.ovale.com.br/_conteudo/2017/ ... oeing.html
http://correio.rac.com.br/_conteudo/201 ... raer.html#
http://www.valor.com.br/empresas/523640 ... -diz-cowen

subramak1 wrote:

flyingclrs727 wrote:

Boeing needs a 100-160 seat narrow body that can compete with the Bombardier/Airbus C-Series. I wish Southwest would sign up as a launch customer. Their fleet no longer has anything with the passenger count of a 737-200. For years that was the only plane they had in their fleet. Now the smallest planes in their fleet is 143 seats and the smallest planes they have on order have 150 seats. There are lots of smaller markets that can't sustain service with the size of Southwest's planes. I rarely get to fly out of my home airport of CRP on WN, because most of their destinations are not available or their prices are generally higher (but not all) than flying from SAT, AUS, or HOU. Having smaller planes to allow frequencies out of smaller market airports would allow better service.

WN doesn't need a plane of 737 200 . Their market has changed, they have more long haul passengers than short haul passengers and flying bigger planes makes sense now

Subu

There are lots of customers who either have to drive long distances to get to one of WN's airports or fly to one to make a connection. Not everyone who needs to fly lives near top 20 or 50 MSA's WN needs to give up its obsession with only having one aircraft type. They are a big enough airline that they could operate another type with good economies of scale.

flyingclrs727 wrote:

There are lots of customers who either have to drive long distances to get to one of WN's airports or fly to one to make a connection. Not everyone who needs to fly lives near top 20 or 50 MSA's WN needs to give up its obsession with only having one aircraft type. They are a big enough airline that they could operate another type with good economies of scale.

Correct. Nothing about the consolidated USA market means that WN would have reason not to fly 100-seat aircraft if they could do so profitably. A 100-seat a/c would increase WN's reach and allow them to compete better with legacies, whose access to smaller a/c via regionals allows them to reach into more markets. And indeed, a 100-seater would no doubt help WN's legacy markets who might struggle to fill 140+ seat aircraft.

What are the CASM numbers on the Embraer next-gen 195 vs. the CS-100 and CS-300? Would a grouping of EMB-195/2 / 737-7MAX / 738-8MAX offer as efficient a way to serve increments from 100 to 150 seats as would a grouping of CS-100 / CS-300 / A320NEO?

Jim

DCA-ROCguy wrote:

Correct. Nothing about the consolidated USA market means that WN would have reason not to fly 100-seat aircraft if they could do so profitably. A 100-seat a/c would increase WN's reach and allow them to compete better with legacies, whose access to smaller a/c via regionals allows them to reach into more markets. And indeed, a 100-seater would no doubt help WN's legacy markets who might struggle to fill 140+ seat aircraft.

To state the obvious, WN already had the ~117 seat Boeing 717 / MD95 fleet they got from AirTran and clearly thought they could not operate it profitably, to the point where they underwrote DL's acquisition of the fleet. I don't see them becoming EMB/BBD customers any time soon.

patineta89 wrote:

Not surprising news... I guess Boeing had no alternative after their terrible handling of the supposed BBD threat.
If this goes ahead, 2 things will probably happen:
1 - Mitsubishi RJ program gets it's final burial seal
2 - A mega joint venture between Russian and Chinese manufacturers gets much closer to reality

Boeing is not in the least bit desperate. It is a company with great resources but is worried about the new level of competition that will arise in the coming years.

It is worth noting what has occurred in the market of smaller jets with several competitors (E-J, CRJ, MRJ, SSJ, ARJ, ..) where no one is having a good return. Some have no prospect of return at all. In the larger single-lane jets the Airbus / BBD, Comac and Irkut combination will make the competition heat up in 5 years and the 737 is the oldest in the group.

For Boeing, the EMB value is not its facilities or customer base but fundamentally the ability to work together in complex projects, on time, on budget, fulfilling the word committed.

I understand that for Boeing the best bet is to use Embraer to jointly accelerate the launch of two new lines (NMA and NSA), that is, substitutes for the 767/757 and the 737. Time is a critical variable. In the next 5-8 years the oil will still be at a not very expensive level, so that the consumption itself is not so critical.

In other words, the possible purchase of shares would not be the main way of forging a relationship. I also believe that in the end there will be little transfer of shares and the use of other mechanisms with access by Embraer to cheap capital in exchange for alignment with Boeing projects (money x freedom). It will be exciting years.

flyingclrs727 wrote:

subramak1 wrote:

flyingclrs727 wrote:

Boeing needs a 100-160 seat narrow body that can compete with the Bombardier/Airbus C-Series. I wish Southwest would sign up as a launch customer. Their fleet no longer has anything with the passenger count of a 737-200. For years that was the only plane they had in their fleet. Now the smallest planes in their fleet is 143 seats and the smallest planes they have on order have 150 seats. There are lots of smaller markets that can't sustain service with the size of Southwest's planes. I rarely get to fly out of my home airport of CRP on WN, because most of their destinations are not available or their prices are generally higher (but not all) than flying from SAT, AUS, or HOU. Having smaller planes to allow frequencies out of smaller market airports would allow better service.

WN doesn't need a plane of 737 200 . Their market has changed, they have more long haul passengers than short haul passengers and flying bigger planes makes sense now

Subu

There are lots of customers who either have to drive long distances to get to one of WN's airports or fly to one to make a connection. Not everyone who needs to fly lives near top 20 or 50 MSA's WN needs to give up its obsession with only having one aircraft type. They are a big enough airline that they could operate another type with good economies of scale.

While it is true that people drive long distances to get WN's airports. WN has run their numbers and I believe that they may not get additional revenue that justifies these costs. Why would they go to Hawaii if these other routes were profitable

Subu

Revelation wrote:

DCA-ROCguy wrote:

Correct. Nothing about the consolidated USA market means that WN would have reason not to fly 100-seat aircraft if they could do so profitably. A 100-seat a/c would increase WN's reach and allow them to compete better with legacies, whose access to smaller a/c via regionals allows them to reach into more markets. And indeed, a 100-seater would no doubt help WN's legacy markets who might struggle to fill 140+ seat aircraft.

To state the obvious, WN already had the ~117 seat Boeing 717 / MD95 fleet they got from AirTran and clearly thought they could not operate it profitably, to the point where they underwrote DL's acquisition of the fleet. I don't see them becoming EMB/BBD customers any time soon.

Or, maybe part of the reason was that the 717/MD95 fleet was too much of a maintenance hassle for WN? What's to say that a modern, fuel-efficient 100-seater wouldn't work for WN in the long term?

Revelation wrote:

[To state the obvious, WN already had the ~117 seat Boeing 717 / MD95 fleet they got from AirTran and clearly thought they could not operate it profitably, to the point where they underwrote DL's acquisition of the fleet. I don't see them becoming EMB/BBD customers any time soon.

The 717 is an older aircraft, plus WN's pilots refused to approve size-appropriate rates for flying it. So it apparently didn't fit their economics. I suspect that WN and their unions could figure something out if the right aircraft comes along and they see growth potential.

Jim

scbriml wrote:

Jerry123 wrote:

Boeing themselves would say the MAX 7 would cover that market.

It does, but nobody's buying it.

I have a problem with this logic, I have to say.

It seems to me that the statement should include the phrase that Delta/others were not interested in the -700NG/7MAX
"at any economic price that Boeing could offer."


That does NOT mean that Delta/others would not have been interested in the -700/7MAX at the price offered by Bombi.

Such a price however, was impossible without a massive subsidy (my words).

No?

dtw2hyd wrote:

Waterbomber wrote:

Japan would also never sell the MRJ program. Too much pride involved and think of the MRJ not as a final goal, but a foot in the door for the Japanese.
Boeing didn't give Japan a huge workshare on the B777X even back in the days that they took a JAL order for granted, and who knows how much workshare will be give to Japan on the MOM or Y3. The Japanese industry also suffered a lot under the B787 program's mismanagement on the Boeing side, so yes they are now harvesting the fruits on the B787 program, but it costed a lot of lost revenue, delayed payments, excess cost, as well as patience and self-control.
Japan has the industrial capacity and the capital to go after A & B in the narrowbody market, should it so decide.

I can see a Boeing-Embraer JV on the E2.
As someone mentionned earlier, Embraer could need a partner as the E2 isn't very successful.
They can keep building it in Brazil at lower cost, and Boeing can start offering package deals to airlines.

How about a re-engined, rebranded SSJ100. It was a Boeing managed program with almost all western content. It is also most mature modern RJ with a good number of in-service frames. Strap on GE/PW Engines and call it BRJ100.

Never looked at it until your post.

Nothing to do with Embraer - could fit happily into B's portfolio anyway, IMO.

cheers

subramak1 wrote:

flyingclrs727 wrote:

Boeing needs a 100-160 seat narrow body that can compete with the Bombardier/Airbus C-Series. I wish Southwest would sign up as a launch customer. Their fleet no longer has anything with the passenger count of a 737-200. For years that was the only plane they had in their fleet. Now the smallest planes in their fleet is 143 seats and the smallest planes they have on order have 150 seats. There are lots of smaller markets that can't sustain service with the size of Southwest's planes. I rarely get to fly out of my home airport of CRP on WN, because most of their destinations are not available or their prices are generally higher (but not all) than flying from SAT, AUS, or HOU. Having smaller planes to allow frequencies out of smaller market airports would allow better service.

WN doesn't need a plane of 737 200 . Their market has changed, they have more long haul passengers than short haul passengers and flying bigger planes makes sense now

Subu

Maybe time for massive, super-successful (but staid) WN to hatch:

A disruptive, feisty startup with modern birds at the 737-300 size?


But not to forget the old WN sense of humour-
always endeared WN to this Aussie.

cheers

Nean1 wrote:

patineta89 wrote:

Not surprising news... I guess Boeing had no alternative after their terrible handling of the supposed BBD threat.
If this goes ahead, 2 things will probably happen:
1 - Mitsubishi RJ program gets it's final burial seal
2 - A mega joint venture between Russian and Chinese manufacturers gets much closer to reality

Boeing is not in the least bit desperate. It is a company with great resources but is worried about the new level of competition that will arise in the coming years.

It is worth noting what has occurred in the market of smaller jets with several competitors (E-J, CRJ, MRJ, SSJ, ARJ, ..) where no one is having a good return. Some have no prospect of return at all. In the larger single-lane jets the Airbus / BBD, Comac and Irkut combination will make the competition heat up in 5 years and the 737 is the oldest in the group.

For Boeing, the EMB value is not its facilities or customer base but fundamentally the ability to work together in complex projects, on time, on budget, fulfilling the word committed.

I understand that for Boeing the best bet is to use Embraer to jointly accelerate the launch of two new lines (NMA and NSA), that is, substitutes for the 767/757 and the 737. Time is a critical variable. In the next 5-8 years the oil will still be at a not very expensive level, so that the consumption itself is not so critical.

In other words, the possible purchase of shares would not be the main way of forging a relationship. I also believe that in the end there will be little transfer of shares and the use of other mechanisms with access by Embraer to cheap capital in exchange for alignment with Boeing projects (money x freedom). It will be exciting years.

Very interesting.

However I suspect that the Commercial areas will become more formally aligned,

as having EMB-designed/built products then given the immense Boeing marketing/support grunt will be impossible to ignore.


cheers
id

ctrabs0114 wrote:

Or, maybe part of the reason was that the 717/MD95 fleet was too much of a maintenance hassle for WN? What's to say that a modern, fuel-efficient 100-seater wouldn't work for WN in the long term?

C'mon, we're not talking about DC-9s built in the 60s. The 717 has the same generation engine as does A320CEO and 737NG. DL is happily flying the exact same frames right now. Jet A is reasonably priced. WN has a history of maintaining 737 Classics up till this year. The planes are fine in the right route structure and with the right pilot contracts.

Acquiring modern 100 seaters would mean paying high lease/purchase costs. And if you think new frames mean low maintenance, talk to PW GTF customers or RR Trent 1000 customers. It's no bed of roses.

WN tried the AirTran fleet and found they could not make it work. Buying new EMB or BBD 100 seaters is not going to change the math, IMHO.

DCA-ROCguy wrote:

The 717 is an older aircraft, plus WN's pilots refused to approve size-appropriate rates for flying it. So it apparently didn't fit their economics. I suspect that WN and their unions could figure something out if the right aircraft comes along and they see growth potential.

Yes, WN pays pilots well, and that's a big part of why we don't see them using 100 seaters and we do see them buying more MAX8 than MAX7: the larger plane helps cover the pilot's pay.

I don't think WN or any other US unionized carrier is going to open up scope to allow 100 seaters any time soon. It's a major issue for both BBD and EMB.

DCA-ROCguy wrote:

Revelation wrote:

[To state the obvious, WN already had the ~117 seat Boeing 717 / MD95 fleet they got from AirTran and clearly thought they could not operate it profitably, to the point where they underwrote DL's acquisition of the fleet. I don't see them becoming EMB/BBD customers any time soon.

The 717 is an older aircraft, plus WN's pilots refused to approve size-appropriate rates for flying it. So it apparently didn't fit their economics. I suspect that WN and their unions could figure something out if the right aircraft comes along and they see growth potential.

Jim

IMO WN will eventually bring another aircraft into the fleet, but it won't be a 100 seater. It'll be larger with enough range to fly to more places in South America, from more places to Hawaii, and perhaps finally to Europe. WN does a great job of following the money and there's lots more money flying to the above than in flying 100 seaters. Can anyone say MOM?

edu2703 wrote:

Latest headlines in Brazil:

Brazilian President Michel Temer praises Embraer-Boeing deal, but says transferring control to Boeing is out of the question.

Founder of Embraer, Mr. Ozires Silva says there is not a takeover negotiation going on. What is being negotiated is a partnership agreement.

Boeing can buy only 35% of Embraer shares, the maximum allowed without requiring permission from Brazilian government.

Boeing-Embraer deal: Merger or joint venture likely. Takeover unlikely, concludes american financial company Cowen

http://agenciabrasil.ebc.com.br/politic ... -diz-temer
http://www.ovale.com.br/_conteudo/2017/ ... oeing.html
http://correio.rac.com.br/_conteudo/201 ... raer.html#
http://www.valor.com.br/empresas/523640 ... -diz-cowen

Thanks for the informative post. I wish more people would read it before speculating further outside the bounds of reality.
Maybe we'll see an Embraer/Boeing joint project in the future, covering the 100-160 seat market.

brindabella wrote:

I have a problem with this logic, I have to say.

What's causing you difficulty? Regardless of Delta's choice of the CS, Boeing is struggling to sell the 737-7 to anyone. Boeing makes it hard for us by 'hiding' the MAX models, but AFAIK, they have only sold about 75 out of over 4,000 total MAX sales.

brindabella wrote:

scbriml wrote:

Jerry123 wrote:

Boeing themselves would say the MAX 7 would cover that market.

It does, but nobody's buying it.

I have a problem with this logic, I have to say.

It seems to me that the statement should include the phrase that Delta/others were not interested in the -700NG/7MAX
"at any economic price that Boeing could offer."


That does NOT mean that Delta/others would not have been interested in the -700/7MAX at the price offered by Bombi.

Such a price however, was impossible without a massive subsidy (my words).

No?

You've done quite well in stating the reality of the situation. You can't make a 100-150 seater economically. That's the rub agains the CS and why it is flailing, failing and on GOV support. In order to attempt to make a sale, BBD offered the CS at a price for Delta that at this point has been found to be "illegal dumping". For their actions, BBD and potential US purchasers are looking at tariff costs in excess of 290%. So, the market is extremely hard to serve, which shows why Boeing and Airbus have a hard time selling their jets in that portion of the stable and why the CS is not successful.

A very good article written on what Boeing and Embraer have been discussing. It gives a good idea of what a Boeing and Embraer venture would look like in reality.

https://www.reuters.com/article/us-embr ... SKBN1EH0C7

JetBuddy wrote:

Thanks for the informative post. I wish more people would read it before speculating further outside the bounds of reality.
Maybe we'll see an Embraer/Boeing joint project in the future, covering the 100-160 seat market.

Here in Brazil, the reactions are more negative than positive. If you see the comments on Brazilian aviation forums, most people seem to be convinced that Embraer will be sold and Boeing will close assembly lines in Brazil and take it to United States.

Definitly this negative reaction of most Brazilians will not help convince the Brazilian government to authorize the deal. Of course the main interest of Boeing was to buy Embraer, but it will not happen. Neither the shareholders nor the government are interested in such a business.

In my opinion, the best proposal for Embraer that Boeing can offer is something like a merger, but respecting the company's independence and ensuring the continuation of assembly lines in Brazil.

If such an agreement were reached, the benefits to Embraer would be enormous. Possibility of greater investment to develop new projects in the future. Projects in which Boeing would have great interest. This could allow the expansion of assembly lines in Brazil and creation of more jobs.

Unfortunately, most Brazilians fail to see the benefits of negotiation and can only imagine the worst scenario for Embraer.

brindabella wrote:

scbriml wrote:

Jerry123 wrote:

Boeing themselves would say the MAX 7 would cover that market.

It does, but nobody's buying it.

I have a problem with this logic, I have to say.

It seems to me that the statement should include the phrase that Delta/others were not interested in the -700NG/7MAX
"at any economic price that Boeing could offer."


That does NOT mean that Delta/others would not have been interested in the -700/7MAX at the price offered by Bombi.

Such a price however, was impossible without a massive subsidy (my words).

No?

For starters, the CSeries is a much more efficient machine than the 737. Then, for DL, there is the value of becoming an MRO for the PW GTF engines. This was also surely a factor in DL picking the CSeries, as we know it was in the A321 deal. It’s possible that Boeing couldn’t lower the price of a 737 sufficiently to offset the additional value of the CSeries, in Delta’s view.

No?

edu2703 wrote:

Here in Brazil, the reactions are more negative than positive. If you see the comments on Brazilian aviation forums, most people seem to be convinced that Embraer will be sold and Boeing will close assembly lines in Brazil and take it to United States ...

... Unfortunately, most Brazilians fail to see the benefits of negotiation and can only imagine the worst scenario for Embraer.

I agree with you 100% !!!

I'm not sure if Boeing knocked on Embraer's door or if Embraer knocked on Boeing's door.

But the situation is very different from that experienced by McDonnell Douglas in the 1990s and also by Bombardier, whose major shareholders (the Beaudoin family) made mistakes in market valuations and led the company into a pre-bankruptcy situation.

Regardless of the outcome of the A + BBD (CSALP) agreement, the CSeries is eating the top market in the case of our EJets E1 and E2 programs and below in the case of the Boeing 73Xs. If, after the agreement passes by the legislators and such, CSALP will have behind it the whole apparatus of a giant called Airbus, whose customer base is a possible buyer of CSeries.

However, unlike BBD, Embraer is not giving up (yet), but the dynamics of this market requires quick and well-planned actions and responses or otherwise the competitor eats us alive.

There are other factors that people are disregarding here: the bargaining power (which counts for us as well as Bombardier) when we multiply the scale many times:
- bargaining power with suppliers;
- bargaining power with your customers;
- bargaining power with those who finance the aircraft.

And this last item I believe to be of a concern for Embraer with certainty, since the main financier of our aircrafts, the BNDES - National Bank of Economic and Social Development, is being forced by the federal government to return to it a huge sum contributed to the bank and in order to that the public accounts close the year in a good content.
Source:https://g1.globo.com/economia/noticia/governo-recebe-devolucao-de-r-33-bilhoes-do-bndes-ate-sexta-diz-planjamento.ghtml:
"Government receives R $ 33 billion from the BNDES."

The interests charged by BNDES are compatible with international rates. However, when external financing is needed due to the lack of this financing, interest rates tend to be higher given the risk of the business or the "Brazil risk" that fluctuates according to the international agencies that give us a good or a bad investment notes.

The aerospace industry has a long-term maturity: considering that from the first market studies until the delivery of the first serial units, we can put there at least 5 years if everything goes according to plan and without major surprises in the project. In the meantime, there is a risk that the market will adapt or change to a different reality from that previously prospected, requiring readjustment or even the cancellation of the project. A good example of this is the Leajert 85:
source: https://www.flightglobal.com/news/artic ... ss-418367/.

Within the commercial area, Boeing currently concentrates its R&D capacity on the new 777X, 787-10, 737 MAX10 and the "supposed 797".

On our side, in the commercial area Embraer is finalizing the E190-E2 certification process and next year the same to the E195-E2, and we have pending what will be the future of the E175-E2, although I believe that maybe the company has given the green light to the continuity regardless of what's going to come out with such "mainstream" scope clauses.

As resources are finite even for a Boeing and if we consider, for example, that with the MAX the Boeing Co. reached the limit of development of the 737 requiring in a future already visible a product that will replace that family, added to this the new "supposed 797", it is natural that we believe that Embraer's smaller participation in the development and manufacturing of these aircraft would provide us excellent benefits.

Embraer is prospecting for a future turboprop aircraft of "supposed" 70 seats. It also has a project together with UBER (beyond the year of 2024).

But by reaffirming what the company president said, this will only be resumed after 2022 when the three E2 family aircraft begin to make the expected financial return on their sales. In that interim, I see the company with hands tied for new projects.

Of course I'm talking about the commercial division. Both the executive and defense divisions apparently are not at the negotiating table ...

And then I ask you all: what to do with all those involved in the project that now ends and goes into production line ??? What to do from today until at least 2022 ???
I'm sure you people know the answer ...
.
Friends, lower your guard, wait for the events because the story is moving forward.

A hug to everyone …

brindabella wrote:

subramak1 wrote:

flyingclrs727 wrote:

Boeing needs a 100-160 seat narrow body that can compete with the Bombardier/Airbus C-Series. I wish Southwest would sign up as a launch customer. Their fleet no longer has anything with the passenger count of a 737-200. For years that was the only plane they had in their fleet. Now the smallest planes in their fleet is 143 seats and the smallest planes they have on order have 150 seats. There are lots of smaller markets that can't sustain service with the size of Southwest's planes. I rarely get to fly out of my home airport of CRP on WN, because most of their destinations are not available or their prices are generally higher (but not all) than flying from SAT, AUS, or HOU. Having smaller planes to allow frequencies out of smaller market airports would allow better service.

WN doesn't need a plane of 737 200 . Their market has changed, they have more long haul passengers than short haul passengers and flying bigger planes makes sense now

Subu

Maybe time for massive, super-successful (but staid) WN to hatch:

A disruptive, feisty startup with modern birds at the 737-300 size?


But not to forget the old WN sense of humour-
always endeared WN to this Aussie.

cheers

They already have hundreds of 737-700's with more used ones still being acquired. They have the same capacity as the 737-300. They need a smaller plane to serve smaller markets. I wouldn't mind if it were a turboprop. WN has lots of international flights to Mexico or the Caribbean from HOU. Most of them have no connection possibilities from CRP which is only 200 miles away.

flyingclrs727 wrote:

brindabella wrote:

subramak1 wrote:

WN doesn't need a plane of 737 200 . Their market has changed, they have more long haul passengers than short haul passengers and flying bigger planes makes sense now

Subu

Maybe time for massive, super-successful (but staid) WN to hatch:

A disruptive, feisty startup with modern birds at the 737-300 size?


But not to forget the old WN sense of humour-
always endeared WN to this Aussie.

cheers

They already have hundreds of 737-700's with more used ones still being acquired. They have the same capacity as the 737-300. They need a smaller plane to serve smaller markets. I wouldn't mind if it were a turboprop. WN has lots of international flights to Mexico or the Caribbean from HOU. Most of them have no connection possibilities from CRP which is only 200 miles away.

You're quite right - a typo.
I had the -200 size in mind, but that's not how it came out.

cheers

edu2703 wrote:

JetBuddy wrote:

Thanks for the informative post. I wish more people would read it before speculating further outside the bounds of reality.
Maybe we'll see an Embraer/Boeing joint project in the future, covering the 100-160 seat market.

Here in Brazil, the reactions are more negative than positive. If you see the comments on Brazilian aviation forums, most people seem to be convinced that Embraer will be sold and Boeing will close assembly lines in Brazil and take it to United States.

Definitly this negative reaction of most Brazilians will not help convince the Brazilian government to authorize the deal. Of course the main interest of Boeing was to buy Embraer, but it will not happen. Neither the shareholders nor the government are interested in such a business.

In my opinion, the best proposal for Embraer that Boeing can offer is something like a merger, but respecting the company's independence and ensuring the continuation of assembly lines in Brazil.

If such an agreement were reached, the benefits to Embraer would be enormous. Possibility of greater investment to develop new projects in the future. Projects in which Boeing would have great interest. This could allow the expansion of assembly lines in Brazil and creation of more jobs.

Unfortunately, most Brazilians fail to see the benefits of negotiation and can only imagine the worst scenario for Embraer.

Boeing showed their hand during and after negotiations with Bombardier. The motivation was to neutralise competition, not to nurture a small jet family.

In return for a modest investment, at the minimum, they wanted C series marketing rights to the Americas.

Boeing has learned from it's US-based customers. International joint ventures, well managed, regulate competition when politicians won't, maximising returns.

Interesting to see how keen airlines are for Bombardier and Embraer to prosper as viable competitors to A & B. If not, it paves the way for aero engine rationalisation from 3 to 2, and perhaps even a VLA A & B joint venture.

Planesmart wrote:

Boeing showed their hand during and after negotiations with Bombardier. The motivation was to neutralise competition, not to nurture a small jet family.
[/quote]

Do you really believe on that ???
You said on the Boeing´s side.
But did you thought on Embraer´s side ???
Come on ...

aerolimani wrote:

brindabella wrote:

scbriml wrote:

It does, but nobody's buying it.

I have a problem with this logic, I have to say.

It seems to me that the statement should include the phrase that Delta/others were not interested in the -700NG/7MAX
"at any economic price that Boeing could offer."


That does NOT mean that Delta/others would not have been interested in the -700/7MAX at the price offered by Bombi.

Such a price however, was impossible without a massive subsidy (my words).

No?

For starters, the CSeries is a much more efficient machine than the 737. Then, for DL, there is the value of becoming an MRO for the PW GTF engines. This was also surely a factor in DL picking the CSeries, as we know it was in the A321 deal. It’s possible that Boeing couldn’t lower the price of a 737 sufficiently to offset the additional value of the CSeries, in Delta’s view.

No?

All no doubt highly relevant to Delta's decision, especially now in 2017.

However your points do not really address mine.

cheers

brindabella wrote:

aerolimani wrote:

brindabella wrote:

I have a problem with this logic, I have to say.

It seems to me that the statement should include the phrase that Delta/others were not interested in the -700NG/7MAX
"at any economic price that Boeing could offer."


That does NOT mean that Delta/others would not have been interested in the -700/7MAX at the price offered by Bombi.

Such a price however, was impossible without a massive subsidy (my words).

No?

For starters, the CSeries is a much more efficient machine than the 737. Then, for DL, there is the value of becoming an MRO for the PW GTF engines. This was also surely a factor in DL picking the CSeries, as we know it was in the A321 deal. It’s possible that Boeing couldn’t lower the price of a 737 sufficiently to offset the additional value of the CSeries, in Delta’s view.

No?

All no doubt highly relevant to Delta's decision, especially now in 2017.

However your points do not really address mine.

cheers

What proof do you have that BBD has sold at a lower cost than Boeing would be willing to accept for a 737? Given that BBD refused to actually disclose that information to the DOC, no one but BBD and DL actually know the details of the deal. My points are supporting the argument that BBD didn't need to sell as low as Boeing in order to land the deal. A Toyota Camry goes for $24000, but the Camry Hybrid sells for $28000, and yet some people find it worth spending the extra on the hybrid. Same with a 737 versus a CSeries, especially for DL with its MRO interests.

Honestly, I suspect the price DL paid for the CSeries is still higher than what Boeing might ask for a 737-7MAX.

As has been stated over and over again: 1) launch pricing is normal for any new model of aircraft, 2) launch aid is commonplace in the aviation industry, and 3) the influx of loans and investments was intended to reassure potential buyers that BBD was not going to go bankrupt imminently. Likewise, the potential partnership with Airbus is all about giving the CSeries program more long-term stability. To declare BBD the recipients of a "massive subsidy" is to fully and completely drink the Boeing legal department kool-aid. None of that money was given to BBD without serious strings attached.

aerolimani wrote:

brindabella wrote:

aerolimani wrote:

For starters, the CSeries is a much more efficient machine than the 737. Then, for DL, there is the value of becoming an MRO for the PW GTF engines. This was also surely a factor in DL picking the CSeries, as we know it was in the A321 deal. It’s possible that Boeing couldn’t lower the price of a 737 sufficiently to offset the additional value of the CSeries, in Delta’s view.

No?

All no doubt highly relevant to Delta's decision, especially now in 2017.

However your points do not really address mine.

cheers

What proof do you have that BBD has sold at a lower cost than Boeing would be willing to accept for a 737? Given that BBD refused to actually disclose that information to the DOC, no one but BBD and DL actually know the details of the deal. My points are supporting the argument that BBD didn't need to sell as low as Boeing in order to land the deal. A Toyota Camry goes for $24000, but the Camry Hybrid sells for $28000, and yet some people find it worth spending the extra on the hybrid. Same with a 737 versus a CSeries, especially for DL with its MRO interests.

Honestly, I suspect the price DL paid for the CSeries is still higher than what Boeing might ask for a 737-7MAX.

As has been stated over and over again: 1) launch pricing is normal for any new model of aircraft, 2) launch aid is commonplace in the aviation industry, and 3) the influx of loans and investments was intended to reassure potential buyers that BBD was not going to go bankrupt imminently. Likewise, the potential partnership with Airbus is all about giving the CSeries program more long-term stability. To declare BBD the recipients of a "massive subsidy" is to fully and completely drink the Boeing legal department kool-aid. None of that money was given to BBD without serious strings attached.

Thank you for your reply, but nope, zero Kool-Aid.

My attention was drawn by:

1) The announcement of the DL sale (seemingly a great step forward for the C-series,and welcomed by many, including me).
2) A subsequent notification by Bombi to the markets that the sale would incur a forward loss of !/2 Billion dollars.


A very large loss for a Company the size of Bombi; and it made the DL sale seem like a significant gamble.
Which might sink Bombi if it did not come off.

cheers

Avery lar