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Boeing, Airbus Can't Replace the 757

Stocks in this article: AMR BA DAL LCC UAL

CHARLOTTE, N.C. ( TheStreet) -- When Boeing (BA) halted production of the 757 seven years ago, it left a gap that US Airways (LCC) CFO Derek Kerr says needs to be filled.

"The dilemma we have now is that the 757 is a great airplane that is not made anymore," Kerr said, in an interview. "That leaves a hole in the industry, and we need to figure out what to do to replace it."

The US Airways fleet currently includes 24 Boeing 757-200s. The 757 seats 176 to 193 passengers and is capable of flying about 3,900 miles, a long range for a narrow-body aircraft -- that's what makes the 757 so desirable. The 757 can fly routes like Charlotte to Dublin, which is 3,226 nautical miles, and Philadelphia to Lisbon, 3,453 miles.

Also, its engines are powerful enough to fly from Phoenix to Honolulu in the summer, when high temperatures require extra lift before taking off on the 2,527-mile-route.

This week, Kerr plans to talk with Airbus executives in an effort to determine whether the Airbus A321neo might be configured to offer range and power similar to the 757. "That's what we're trying to get them to do, to give it some more legs," he said. The carrier has asked Airbus to offer extended operations capabilities for the aircraft so that it can operate on the longer, over-water flights.

The Airbus A321neo is expected to enter service in 2016, will seat about 185 passengers and to have a range of about 3,680 nautical miles. That's nearly what the 757 can fly, said aviation consultant Scott Hamilton, who follows Airbus and Boeing as managing director of Leeham Co. "There is not a true 757 replacement, but there is a close replacement," Hamilton said.

Airbus spokesman Clay McConnell said the A321neo can fly "well over 90% of the missions that the 757 flies, but on the fringes, the 757 is a niche airplane, where there's not a plug-in replacement."

Regarding Charlotte-Dublin, Philadelphia-Lisbon and Phoenix-Honolulu, McConnell acknowledged that "we have not run those specific city pairs."

Just because a route falls within an airplane's general range, that does not make the route flyable, McConnell said. "It's not as simple as just looking at the range chart," he said. "You have to adjust for winds, routing, configuration and other factors. Planes rarely fly a direct route."

Potential 757 Replacements

Besides the A321neo, the largest narrow-body aircraft currently in production is the 737-900, which seats 180 passengers in two classes and has a range of 3,265 nautical miles.

A July 2011 report, titled "Comparing 757 Replacements" and issued by Air Insight (a joint venture by three firms including Leeham), concluded that the A321neo "can operate many trans-Atlantic routes, while the 737-900ER and A321 (current version) cannot (do so) year round." The report said both newer planes have a lower operating cost than the 757, excluding the cost of acquisition.

At the time that Boeing ceased production of the 757 in 2004, Hamilton said the 737 production line in Renton, Wash., was "far more automated and efficient than the 757 line" and Boeing had started to produce the 737-900.

"The 757 was really kind of hand-produced, as opposed to lean production, and the cost to produce it was far greater than the cost to produce the 737," he said. Also, air travel had been curtailed following the Sept. 11 terrorist attacks, and winglets were not yet being added to 757s to reduce drag and increase range.

757 Love

The addition of winglets made the 757 a desirable airplane for trans-Atlantic operations, and it became a mainstay on the routes, particularly from Continental's Newark hub. Today, the three largest U.S. carriers all have significant 757 fleets.

American (AMR) operates 124 Boeing 757s. They fly a wide variety of routes, including domestic flights to high altitude ski markets, where powerful engines enable lift, and international routes to Europe and Latin America. Looking ahead, airplanes from American's recent 460-aircraft order will provide replacements, but spokesman Tim Smith said "the question of which aircraft ultimately replace some of those 757s is not at all decided."

United (UAL) and Continental operate 158 Boeing 757s. Some are dedicated to transcontinental service between New York's Kennedy and California, configured as international aircraft with first, business and economy plus service. Meanwhile, Delta (DAL) operates 183 Boeing 757s on a variety of routes.

Currently the largest Airbus operator in the world, US Airways will replace 57 older Boeing 737-300s and 400s with new Airbus narrow-bodies by 2015. Then it will replace its twelve 767s, either with Airbus A330s or Airbus A350s.

Subsequently, it will replace the 757s. Andrew Nocella, senior vice president for marketing and planning, said he believes the A321neo will be able to fly the majority of 757 flights, including Phoenix to Hawaii, but he is unsure about the trans-Atlantic capabilities on niche routes. For that, he said, the carrier may be "looking at many years of life left in our 757s."

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed

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