Story ID: GPalcnma02232018
ALC Reckons Boeing NMA Launch Isn’t Imminent
By: Chris Kjelgaard
Caption: Boeing still has much research to complete before it can launch its NMA program, says ALC executive chairman Steven Udvar-Hazy.
Word Count: 438
Having worked in-depth for more than five years on helping to define Boeing’s proposed New Midsize Aircraft (NMA), Los Angeles-based lessor Air Lease Corporation (ALC) believes a considerable amount of market, performance, pricing, and production-cost research remains left to do before the manufacturer can proceed with a commercial program launch.

Responding to financial analysts’ questions during ALC’s 2017 fourth-quarter earnings call on February 22, ALC executive chairman Steven Udvar-Házy said that while Boeing “would love nothing better than for us to be a launch customer” for the NMA, the manufacturer isn’t ready yet to offer its proposed new aircraft.

“For the last five to six years we’ve been deeply and in great detail engaged with Boeing on defining optimal aircraft size and capability, because they do have a gap between the 737 and the 787,” said Udvar-Házy. “I think Boeing is going through a continued refinement of that definition and also is looking very closely internally at the costs of implementing such a program and then coming up with an economical pricing formula that the airlines and the leasing community can actually afford and justify. That process is ongoing.

“I know Boeing has a lot of resources dedicated to this, but…it’s all got to come together...We just don’t see that [happening] in the next couple of months. It’s a very ambitious undertaking, with lots of moving pieces.”

Similarly, ALC feels that a possible further stretch by Airbus of its A321neo-based A321LR to put market pressure on Boeing’s proposed NMA program is unlikely to happen soon.

“Boeing already tried that with the 757-300 and even though on paper it was the lowest seat-mile-cost airplane, it didn’t sell very well,” noted Udvar-Házy. “There are opportunities for Airbus to make some relatively small changes to the A321neo [but] our belief is that, with the current management changes and issues Airbus is facing, I don’t think it’s their number one priority right now.

“Also, it’s in their interest to see what Boeing does and doesn’t do before they make any product decision along those lines,” said Udvar-Házy. “On their list of priorities, if you take 10 of the highest, I don’t believe that what we call the Super A321 is right now at the top of the list.”

Furthermore, a so-called Super A321 would involve additional engine thrust, “and obviously that’s an issue they’ll have to sort out with CFM and Pratt & Whitney,” he concluded.