LONDON – According to the Wall Street Journal, Rolls Royce and Boeing are holding talks over supplier options on its new midsize airplane (NMA).
The British engine manufacturer has expressed interest in supplying Boeing if the manufacturer decides to move forward with this concept. It is understood that the NMA aircraft would be catered to the gap in the market that would take on the Airbus A321neo.
It is also understood that the specifics of the talks at the moment were predominantly on an early-stage concept for the aircraft, although Boeing has not consulted airlines and lessors yet over this aircraft.
Rolls Royce, among other manufacturers, will be paramount to such discussions, especially as it will have to place new engine technologies on the table in order to make the aircraft more appealing than that of Airbus.
With the COVID-19 pandemic decimating the industry at the moment, such conversations would no doubt have surrounded the viability of this new project that Boeing wants to participate in.
As Boeing tries to continue to take a grip of the 737 MAX crisis, the NMA project will no doubt be something the manufacturer needs in order to move on.
At the moment, both Boeing and Rolls Royce are not publicly going on the record over the talks, but one thing that is known currently is that the NMA aircraft would service the 200-250 seat market.
According to an analyst at Bernstein, named as Douglas Harned, the idea of Boeing beginning to consider a new aircraft during such a crisis is “absurd. There is not a next generation engine on the horizon and engine OEMs are so cash-constrained they would hardly prioritise developing one.”
Harned linked this to the cannibalizing sales of the Boeing 737 MAX and the financial strain on airlines and manufacturers, which has caused a negative duo of problems for Boeing itself.
However Unnecessary Currently, An Important and Much-Needed Move?
Whilst analysts may call the NMA move currently unnecessary, analysts on the other side of the fence believe it is necessary in order to remain competitive with Airbus. ”Hard times demand hard decisions”, said Ron Epstein, an analyst at the Bank of America.
“If they want to stay relevant, they have to do a plane”. And managing the company just for returning cash to shareholders and cutting costs – that’s not going to get them there. That’s yesterday’s strategy.”
It is of course a difficult decision for Boeing to make, but in the case of downturn it has experienced over the last two years, it may actually be prove to be needed, rather than financially viable.
So What Gap is there for the aircraft?
The NMA will look to replace the Boeing 757 and 767 family aircraft, with the assumption of competing with the Airbus A321XLR. However, there is already pressure on Boeing to get this concept released and secure orders, especially with American Airlines (AA) and United Airlines (UA), big customers of Boeing, taking orders of the aircraft.
With the initial team of 1,000 engineers working on the NMA already disbanded following abandoned talks, it does bring into question when the body will be reinstated. The talks from Rolls Royce do indicate good news for Boeing, especially after Rolls Royce initially pulled out of the talks following such disbanding.
However, it is in Rolls Royce’s interest to do this, especially as the engine conglomerate is looking to make its new Ultrafan engines available by the end of this decade.
Whilst it is hard to produce an answer for Boeing, it remains clear that it has to attempt to move away from the MAX crisis in order to remain competitive and as prevalent as Airbus.
The question going forward is ‘What can Boeing provide in the NMA which Airbus doesn’t already offer?’ as well as ‘How will Boeing be able to catch up in terms of market share?’.
If the manufacturer can answer both of those questions and implement such answers in a beneficial and safe way, then it can most definitely be on for a winner.
Featured Image: Boeing 787 Dreamliner in House Colors. Photo Credit: Brandon Farris