How Airbus A321 finally killed Boeing 757
Dubbed as the Pocket Rocket due to its insane thrust-to-weight ratio or the Flying Pencil due to its length, the Boeing 757 had a very up-and-down story. Despite Boeing canceling its production in 2005, the airplane remained popular as airlines seemingly rediscovered its unique capabilities. However, Airbus went after the 757 in order to secure its own position as the true middle-market narrow-body with the A321. And it finally did it in October 2020.
What was the Boeing 757, though? Was it just that: an aircraft with an unusually high thrust-to-weight ratio, capable of operating out of airports with shorter runways or those that were more affected by either cold or hot weather?
Boeing’s double wild bet
There is no doubt that the Boeing 757 was a one-of-a-kind aircraft at the start of its production run. On January 1, 1983, Eastern Air Lines introduced it into commercial service. A few months prior, in September 1982, the Boeing 767 entered service – the two aircraft, despite being single and twin-aisle, respectively, shared the same type rating upon entry. Boeing had done what Airbus always aimed to do, a family of different sized aircraft with pilots and other crew being able to transition between them easily.
“The 757 and the 767 were developed concurrently, so both shared the same technological advances in propulsion, aerodynamics, avionics and materials,” reads the historical description of the Flying Pencil by Boeing.
Though the sales of the narrow-body never truly kicked-off. While its wide-body brother cannot boast an impressive order book, at least it is still produced as a freighter. Ever since its pre-production design period, the 757 was a big question mark for Boeing.
“The design boys wanted a specific number. I said no: A number would imply we know what the hell we're going to build and we don't. So the 7X7 is whatever we're going to do next,” Thornton Wilson, Boeing board chairman and chief executive stated in 1973.
The 7X7 turned out to be the 757. Together with Eastern Air Lines and British Airways, the first customers of the aircraft, it was finally launched in 1978.
But the decision to launch the two aircraft simultaneously was not because Boeing wanted the 757 and 767 to build a home, plant a tree and retire with grandchildren of their own.
“Frankly, our ability to forecast is so lousy that the only way you can survive is to cover all your bets,” the Seattle Times quoted Boeing vice president Kent Holtby.
The company wanted to cover its ground for decades to come, yet was hesitant to go all-in on one product. Its offering was not as diverse at the time – after all, it had just recently released the Boeing 747 into service, another wide-body jet. As fuel prices spiked, its path forward was only lit up by the fact that Boeing knew it had to build a twin-jet and avoid three or four engines.
At the wrong time?
Some criticized the company that the aircraft was not well-suited to their needs at the time.
The industry was not what it was back then. If 2019 was once again a record-breaking year in terms of passenger numbers, 1983 started with the fresh scars of the 1979 energy crisis and a subsequent recession. The world’s population was less globally connected as the Iron Curtain was still up. In general, the 1980s was a very different time for the aviation industry and the Boeing 757 could be the perfect example of that.
If in the 1980s and the 1990s the hub-and-spoke model was as relevant as ever, the late 2010s shifted that situation. Low-cost carriers, which ballooned in size in the beginning of the 21st century, showcased that point-to-point could also work and work very well. Legacy airlines faced a harsh reality that low-cost carriers were able to undermine them by simply cutting ticket prices, which consumers were more than happy to pay.
Slowly, more leisure travel focused-routes were introduced into legacy carrier’s systems. For example, American Airlines (A1G) (AAL) had plans to expand its international network in Summer 2020. In its announcement, the carrier announced its first route in Africa: Philadelphia to Casablanca, Morocco, with a Boeing 757. The seasonal route was supposed to start in June 2020, but we all know what happened next.
Delta Air Lines could also be used as an example of how relatively important the 757 still was.The Delta aircraft (registered N543US) sustained a very hard landing in the Portuguese islands of Azores in August 2019. Upon landing in João Paulo II Airport (PDL), excessive nose movements resulted in “damage on the primary fuselage structure with deformed frames, stringers and skin, as well as permanent nose landing gear axle deformation,” read a report by Portuguese aviation accident investigators (Gabinete de Prevenção e Investigação de Acidentes com Aeronaves (GPIAAF). The Boeing 757, delivered to Northwest Airlines in April 1996, was already 23 years old at the time. Surprisingly, the narrow-body returned to service in December 2019 to serve within the Atlanta-based carrier’s network.
Yet United Airlines could be highlighted as the most prominent example of how the Boeing 757 was simply built at the wrong time. In December 2019, the airline announced an order for 50 new Airbus A321XLR aircraft which will enable United Airlines “to begin replacing and retiring its existing fleet of Boeing 757-200.”
“The new Airbus A321XLR aircraft is an ideal one-for-one replacement for the older, less-efficient aircraft currently operating between some of the most vital cities in our intercontinental network," stated United Airlines executive vice president and chief commercial officer (CCO) Andrew Nocella. The company expected the aircraft to arrive in 2024, allowing the airline to explore routes in Europe from its East Coast hubs, namely Newark and Washington.
Perfect time for the Airbus A321?
Seemingly, the A321XLR fits the former 757 operators’ needs like a glove. In order to truly take the position of the Boeing 757, Airbus and the A321 family of aircraft had to come a long way. It made its final and undisputed claim in October 2020, when a new derivative entered service.
After Airbus introduced its A320 family, its next move was to stretch the aircraft by almost seven meters, improve the wingspan by four square meters and modify the wing itself. The new variant was dubbed the A321. While the A320 remained the most popular variant of the current engine option (ceo) offering, the rules of the game changed when Airbus introduced the new engine option (neo). Much like with the Boeing 757, the first iteration of the Airbus narrow-body came out at a very different era of aviation.
The A321ceo was an underperformer compared to the 757. Airbus order numbers also showcase that the A321 was the less popular variant in the family. The A319ceo, A320ceo and A321ceo amassed a total of 1,486, 4,770 and 1,791 orders, respectively.
With the new engine on the narrow-body, the demand shifted towards larger aircraft. The A319neo became the unwanted child with only 84 total orders, while airlines signed up for 3,916 and 3,450 A320neo and A321neo aircraft, respectively, according to Airbus Orders and Deliveries data as of September 30, 2020. The newly introduced A321XLR, with an even bigger range than the A321neoLR (long-range), one-ups the 757 even more. More than the Boeing narrow-body, the Airbus product is a point-to-point connection facilitator that allows airlines to operate thin routes that are further away with much lower operating costs. At the end of the day, the A321neo is equipped with technology that is much younger than the 757’s, including state-of-the-art engines that are much more fuel-efficient.
Yet the A321, whether the ceo or the neo, could not take on the Boeing 757 in one area – cargo. The Seattle-built narrow-body has been also delivered as a freighter starting from 1987, and passenger-to-freighter conversions began in 2001. In February 2018, the situation began to shift towards Airbus narrow-body.
Taking on the freighter market and the Boeing 757
But the A321 conversion program was a long time coming. The European manufacturer announced the program during the Paris Air Show 2015, for both the A320 and the A321.
During Singapore Airshow in February 2018, Elbe Flugzeugwerke (EFW), a joint venture between Airbus and ST Aerospace, announced that it finally secured a launch contract with Vallair Solutions Sàrl (Vallair) for the Airbus A321 passenger-to-freighter (P2F) conversion. EFW would initially convert 10 A321s and deliver them to the Luxembourg-based aviation asset management company.
“When we were developing the A320P2F program, if we had gone to the competition of it, it would have been the most wonderful, the most beautiful the most performing P2F program that you could ever imagine,” now-former Airbus chief operating officer Tom Williams stated during the Paris Air Show 2015. According to him, the manufacturer came to the conclusion that it “overdesigned the solution.”
“At the time, and I am talking about five years ago, the residual values of the A320s were really running against us in terms of finding enough feedstock,” said Williams.
Another thing has shifted – while Airbus was primarily the driver behind the first attempt at a P2F conversion program, now the Singapore-based ST Aerospace was the leading partner. Nevertheless, Airbus provided access to the second-hand market, and provided help on the technical side, added Williams.
“It is really important for us to have a good P2F program because it really helps us in terms of selling new aircraft and managing residual values.”
Andreas Sperl, the current president and chief executive officer of EFW and former chief financial officer (CFO) at Airbus, added that the “A321 we will also take market share from the segment of 30 to 40 tons, which is currently dominated by the Boeing 757.”
“The Airbus A321P2F is an ideal candidate to replace the aging 757 freighters,” said Sperl.
The Toulouse-designed narrow-body has another advantage – the feedstock for freighter conversions is almost 700 units larger than the 757. Boeing concluded the deliveries of the Flying Pencil with 1,050 units delivered, while Airbus has delivered 1,760 units of the A321ceo so far. Theoretically, airlines are still able to order more – but it is unlikely that the theory will materialize into practice, considering the fact that the A321neo is widely available at the moment.
A321 freighter sees light of day
The culmination of the program came on October 27, 2020. On the day, the first Airbus A321P2F entered service with Qantas Freight, delivering packages and mail on behalf of Australia Post.
The conversion began when one A321 (registered D-ANJA at the time) was shipped to ST Aerospace facilities in Singapore in November 2018. It was finished in early-October 2020 and began its journey to Qantas on the 14th.
Now registered as VH-ULD, the aircraft so far has flown back and forth between Melbourne Airport (MEL) and Brisbane Airport (BNE), Australia, flightradar24.com data shows. The consortium is hopeful that the market will remain hot – not only to replace aging aircraft but to also cater to the growing freight market that has remained intact, unlike its passenger market counterpart. So much so, that ST Aerospace plans to increase the rate of conversions from nine to 23 per year. The company plans to supplement conversion facilities in Dresden, Germany and Singapore with its ST Engineering Aerospace Guangzhou Aviation Services in China and VT Mobile Aerospace Engineering in Mobile, Alabama sites.
“We recognize a strong and growing interest from the market,” in a statement to AeroTime News stated an EFW representative. The company’s conversion slots are fully booked until mid-2022 and EFW is “in different levels of contract discussions, including Memorandums of Understanding (MoU) and Letters of Intent (LoI)” for further orders, the media spokesperson added.
“An update to our order numbers should come in Q1 2021,” the EFW representative wrote.
The Singapore-led joint venture has sprawled competition. Precision Aircraft Solutions and Air Transport Services Group (ATSG) joined forces to launch its own conversion program of the A321 aircraft in August 2017. SmartLynx, a Latvia-based Aircraft, Crew, Maintenance, and Insurance (ACMI) company used the increasing competition to initially order two units from both conversion programs. The two A321P2Fs will be operated by SmartLynx Malta. The airline plans to add additional eight aircraft to its freight operations by 2023.
Boeing 757 staying alive?
But the Boeing 757 is still jamming to Bee Gees’ tune Stayin’ Alive. On October 7, 2020, Icelandair announced that it sold three 757s to an unidentified customer to convert them into freighters. The Icelandic flag carrier received $21 million, a sum that is between $2 and 3 million above book value, according to its press release.
Two of the sold 757s were manufactured in 1994, while the third was rolled out of the factory in 2000, stated Icelandair. As the airline aims to phase out its Flying Pencils, more feedstock could be released into the conversion market – yet again, the fact that Boeing completed the production of the Boeing 757 in 2005 comes back to haunt it. Airbus, as of September 30, 2020, still has 31 A321ceo aircraft in its backlog and potentially even more if an (unlikely) order is to happen, which would facilitate more cargo conversions further down the road.
After all, one of the consequences of the current crisis is the fact that aircraft across the board, especially older airframes, have lost value. Subsequently, more conversions can happen, as the economics of converting an aircraft makes even more sense than previously.
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