18 August 2014

What should do Airbus to compete against 777X: the A350-1100 or a new “A370”?

Almost 15 years ago, Airbus took a huge bet on one segment of the market—very large aircraft. With the A380 still a heavy financial burden and the A350, too, far from generating profits for the manufacturer, Airbus will be forced to prioritize investment decisions more than ever as it defines its product strategy going forward.



All of the open questions facing the European aircraft builder surround the long-haul segment. Some market pundits believe Airbus may have to make a financially painful decision to launch an all-new widebody to counter the Boeing 777X in the 400-500-seat category.



The launch of the 777X has created a new strategy problem for Airbus because it has no aircraft that would mirror the 777X. Its largest twin, the A350-1000, is about 40 seats smaller. Market analysts differ about what Airbus’s plans should be. And unlike in the case of the A330neo, to build a new twin larger than the A350 would require a multibillion-dollar investment. Given the financial drag that the A380 will create for years to come, it is questionable whether Airbus would take that risk again.



The company has at least commissioned studies into what can be done. The research, as expected, indicates that in light of the latest engine technology, building twins even larger than the 777-9 is technically feasible and would—if planned and executed well—lead to significant efficiency gains compared with an aircraft such as the 747-8, which is looking increasingly obsolete.




The Airline Monitor’s Ed Greenslet believes Airbus does not need to do this. “There is no way anyone can develop so many types that can optimally serve every segment,” he argues. “The A330neo is a more interesting strategic option than trying to chase the 777X.” And in spite of the uncertainty around the -800 and the notional -1100, “the A350-900 and -1000 will do just fine,” he opines.



By contrast, Richard Aboulafia, vice president-analysis at the Teal Group, believes Airbus cannot afford to not counter the 777X. “In 5 years, the market will have told Airbus a clear answer and then they will have to do a Moon shot,” he says. A Moon shot would be an all-new airplane. 

But Airbus has already initiated exploring the option of stretching the A350 further beyond the -1000, even if that means an aircraft with less range. If this route is pursued, a 3rd engine type may be required for the family, which stretches the commonality concept. Even Leahy has mentioned that option during a 2013 conference in what appears to have been an early effort to test the waters.




Pilarski, however, emphasizes that there is “no need to spend more money on widebodies” by either Airbus or Boeing after the A350 and 777X are introduced. “It is a more protected market.” With new competitors entering the narrowbody segment—such as China’s Comac or Bombardier—he argues that the 2 incumbents should focus even more on making their narrowbody products superior.



Based on the article “Defining Priorities” published in Aviation Week.

17 comments:

  1. Airbus does not need the -1100 (-10X? maX paX?) now.
    Didier Evrard (head of A350 program) said: stretching the A350-1000 is possible. But is not a priority now. When? Perhaps the day before the first flight of B777-9X. Necessary after the presentation of A380neo (A380-900).
    More important question is: what type of aircraft should be the -10X? Simple stretch without change an engine (97.000lbs is enough) and MTOW (308t)? Shorter range (7000nm+) is not a problem. Add 8 frames to -1000 means 79m length (will fit in the 80m box): 399pax and 50 LD3 cargo is just right. What about the optimization? What about the cost per trip and seat?
    And the final question: who would like to buy it?

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    1. All intriguing and relevant questions, I honestly believe a simple stretch may do it. Don't chase the 777-9x. A simple stretch perhaps with extended folding wing tips but same engine and weights & range around 7000nm+ would likely burn less fuel and be able to cover the vast majority of real world missions at lower cost and earlier market availability. Airbus should move on this soon before too many airlines commit to the 777-9x. Forget about the chasing big orders from gulf's big 3, they need the performance the 777-9x provides and chasing them will make the aircraft less palatable to many other airlines.

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  2. Airbus just needs to increase the efficiency and range of its A350's. Thats all.

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    1. What they need is capacity not more performance, the A350 already has excellent fuel burn even against the numbers tossed around for the 777x series and has 8000nm+ range. I think they must do the stretch, the 777-9x occupies a market segment where Airbus has no competitor. Whereas the A350-1000 has outsold the 777-8x comfortably. Airbus can only watch Boeing's sales in the 400 seat segment. A stretch out to 385+ seats could do the trick and be available earlier.

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    2. Anonymous-you said it in the first sentence, capacity-not numbers of seats but Passengers. The world economy is in the doldrums I think that the massive amount of buying was done on the expectation of a growing passenger market. The A380 has found out this sadly to its cost and a neo version just for clark is nuts.He will buy the 777x no matter what airbus say or do.
      The real market has been single isle aircraft and although not as glorious as the big boys, shows in my mind,as least some reluctance to get in to deep. Huge aircraft are fine as are the economics but only if you can fill them. There is much talk right now of airlines having gone to far down the buying street. I think you may find,lots of airlines playing the wait and see game.

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  3. Does getting 40 passengers more in a aircraft so critical?

    If it was true we would plenty of order for high-density 380? am I wrong?

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  4. I agree, not needed. Illusive market created by the middle east three and those who want to compete them. 40 more seats in the 777-X means 4 more rows of seaats, that's it. Airbus should focus on constant improvement of the A350's eliminating any per seat efficiency advantage that these 40 seats give to the 777-x.. Also, remember that the -1000 is also available with cramped 10 abreast seats for those who want it evaporating any per seat cost advantage.

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    1. A reasonable position, but a simple stretch would be fairly easy to do and there is a 400 seat market to play for. Based on what I've seen, the A350-1000 already has a fuel burn advantage over the much heavier notional 777-9x (which looks to be an excellent aircraft). A stretched A350-1000 with maybe 30 more seats, same weights and a bit less range would be a very attractive aircraft. I find it an exciting prospect.

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  5. Just 40 more seats? Not exactly. With the 777/9 you gain 40 more seats and two less engines. The amount of revenue potential from those extra 40 seats, depending where they are, could be huge. Take carriers who have 744's and and A380's with around 400 seats and want to trim the fuel bill. 777x. Want to carry around 400 passengers and enough space for all the baggage AND a ridiculous amount of cargo space? 777x. Do you want an aircraft that can do all of which I pointed out without having the airport authority making million dollar changes to its gates, terminals and so on? 777x. If the A380 and the A351 was as good or better, they'd be selling. Hell, Kuwait just bought 10 77W's. They could've bought the A351 but they didn't.

    If Airbus was smart they'd let the air out of the A380, let it run its course and focus on a new twin to compete with the 777x.

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    1. Kuwait is not on the official list "Orders through August 12, 2014" by Boeing.

      A350-1000 is a B777-300ER killer (not B777X), but there are no free production slots before 2019.
      Airbus needs A380neo before EIS of B777X, not necessarily A350-1100.

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    2. Two less engines? The A350 also has two engines.

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    3. 777W is cheaper and Kuwait also purchased the A350. I agree that the A380 is a niche aircraft and not a big seller. No one argues that the 777-9X will be great and sell well for some airlines. The point is that the A350-1000 will be a safer bet for more airlines because it is smaller and lighter. It could also be configured as high density to 400 passengers, this evaporating any seet/mile advantage the 777-9 X might have because of those 40 seats. They are different aircrafts for different purposes. Airbus should not invest in that, unless that market proves itself to exist in enough numbers to make money selling those planes. It is very possible that those who would order 400 seaters already purchased theirs (Middle eastern,Cathay, etc) so it would be silly to bring more of those on the market. The A350-1000 should be more worried about 777-300ER being sold for cheap pointed out in the case of Kuwait.

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  6. Take a look. http://news.kuwaittimes.net/kuwait-airways-buy-10-boeing-777-jets/

    Let's not kid ourselves here. The A351 is not a 77W killer. It's better, but not a killer as you say. The production slots dilemma is not the dilemma because people are still ordering the 787 even though you can't touch one until 2020 or later. You can't say the same for the A351.

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    1. 787 orders have been at a comparative crawl for some time now. Orders have largely been top-ups. The reason for that is the lack of available delivery slots (2020 at the earliest as you pointed out). The same is true of the A351 even though performance-wise it has all the makings of a 77W killer. We need look no further than Boeing's decision to move the 777 into a new market segment; 400 seats as evidence of that fact. They realized that merely re-winging and re-engining the 77W would never have gotten it close to the A351. Note also that sales of the 778x against the A351 (which is a more appropriate comparison since they actually occupy the same market segment at 353 vs 350 seats) have favored the A351. But Airbus has another problem, many 77W are still fairly new and there are still many to be delivered, many airliners who would buy a 350 seater just don't need a new one right now. I think that may change come entry into service once the aircraft has proven itself in test, it's economics will likely be too good to pass up.

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    2. That's an unfair comparison, the A351 is a completely different category. The 787 competes with A350-900 which hasn't even been certified yet. And make no mistake, the 787 remains plagued with problems. http://www.thehindu.com/business/Industry/boeings-787-dreamliner-continues-to-dog-air-india/article6339015.ece. The A350 hasn't even been certified yet and the -1000 not even out together. 787 is may be efficient but poorly designed and built and nothing to brag about at this point.

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  7. A crawl is better than going backwards. But here's the kicker. On the surface it's easy to say that Boeing reacted to the A351 with the 777x program but it goes deeper than that. Boeing launched the 77W in 2004. Naturally it's evolved a long way from the original model which was introduced in 1994/1995. So by 2012/13 it was already due for either a refresh or an overhaul. Since an overhaul (new build) would have cost too much time, political wrangling and resources, they went with the 777x. The problem Airbus has is that they aimed the A351 at a target (77W) that was moving on to bigger and better things. Now you have a new state of the art aircraft designed to beat a 13 year old design (2014-2004=10+the 3 years until the A351 enters into service=13).


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    1. Absurd, if you are going for bigger and better, the A380 wins. This "moving target" is out of necessity because it can not compete with the A351 so it has to be made bigger. Also, the 777-x was created for Emirates and Airbus was smart not to design the A350-1000 just for their needs.

      Ha ha ....that's all that can be said about this "moving target" illusive meeting game. Everyone sees it. Excuse me the 777 is 20 years old. Let's see how many they will sell.

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