- Three-Part Overview
- Long Term Airbus / Boeing Positioning
- Airbus Overview
- Mike Bair’s Words Still Resonate After ISTAT
While the end of the decade is some time away, the next two-to-three years will ultimately define whether Airbus or Boeing has the better, revenue generating widebody airplane line-up.
Mike Bair caused more than a stir at ISTAT earlier this year, claiming that Boeing was on “a march to put Airbus out of business in the twin aisle space” but looking beyond his remarks, he said what he did for a variety of reasons that many simply failed to understand.
There’s no question that while Boeing has turned one corner (of many) with the 787, it still has to mitigate against production ramp-up risks, increase the quality of workmanship and drive down unit costs if it aims to make the line profitable. Both Airbus and Boeing will be forever content with the A320neo and 737MAX families sharing the spoils 50-50-ish in the narrowbody market – the current status quo will not change, despite the farcical “threat” posed by new market entrants like the MS-21, C919 and the CSeries. But when you look at what Boeing and Airbus will have in the twin aisle space by the turn of the decade, it’s actually alarming to see a huge chasm opening up.
Airbus – A380 / A330 / A350XWB
Airbus this year alone has been saddled with additional cost on the loss-making A380. First came a €105m charge in March 2012 for the expected rework on rib feet bracket cracking across the entire A380 fleet, as well as those in production, followed closely by another charge of €158m last week. For a program that now has cost in excess of $31bn since its launch in 2000, this is nothing short of a disaster.
Be advised, these charges do NOT take into account the compensation packages currently being thrashed out with A380 operators – predominantly Emirates – whose operations have been hit hard by airplanes being grounded for checks and interim repairs as well as having to refund passengers who could not fly when their A380 flights were downsized. Emirates is beyond livid and is little wonder why they are itching to get the 777X launched. Either way, and like the slow selling 747-8 Intercontinental, these two behemoths represent the past, not the future – save only for the 747-8 Freighter. Twins, not quads are the way forward.
The A330 family is effectively “dead man walking”. That it survives is because of Boeing’s woes on the 787 to date. Once 787 deliveries surpass the 100-unit mark, there will be a significant slowdown in A330 interest – if only because Airbus is doing a stellar job of killing the airplane itself with bizarre dual P2F launches of the A330-200 and A330-300 cargo conversions that will cause not just the A330-200 Freighter to die, but lease rates and residuals of current A330s will start to plummet (irrespective of course, of ever climbing fuel prices that make the A330 even less attractive in contrast to the 787).
As for the A350 family, with Etihad cancelling over half its orders for the A350-1000, whose backlog now stands at a wafer-thin 62 units, it is difficult to see how this program will survive much beyond 2020 – especially, if as is rumoured, Emirates also ditches/switches orders for the model. The program has already suffered two sixth month delays, pushing service entry of the A350-900 to around Q3 of 2014 based on Airbus’ forecasting.
However, that assembly of the first (flight test) airplane has slid dramatically from last fall to June 2012, it is unlikely that the A350-900 will make any EIS date before Q4 of 2015 – that is, of course, there are no further schedule disruptions (and expect A350 launch customer Qatar Airways to make some big Boeing moves within the next two years – either exercising its 787 options and/or as expected a revisiting and placing of more 777-300ER orders because of the delays to the A350-900).
And with the A350-1000 undergoing continual changes, thwarted in large part by Airbus’ inability to understand the nature of the competitive threat posed by the 777X family, its own 2017 service entry date looks like it will slide further still – not just as a result of design alterations, but also as an extension of the delays to come on the baseline A350-900. A realistic target date is closer to the end of 2018. The last model, the A350-800 has shifted service entry to 2016. With just 118 orders from a dozen unhappy customers, some of whom have swapped orders to the bigger A350-900, Airbus has yet to confirm whether it will, as intimated, drop this “cut-n-shut” model which, as of last examination, suffers from chronic excess weight and extremely poor fuel burn – and it looks even worse when contrasted against the 787-9.
By the end of the decade, Airbus will only have three widebody airplane families on offer.
None of these will have commonality and the capacity gap between them is unbridgeable using any of the existing platforms unless an all new airplane is developed – given Airbus’ financial spread at present, the chances of that happening are nil.
So does Boeing’s widebody portfolio look any better? Part Two is published tomorrow, concluding with Part Three on May 24, 2012.