Posts Tagged “A330neo”
Yesterday Airbus offered some updates to its A330neo program. The outcome is that Airbus claims the A330-800 is now the longest range aircraft seating between 250-300. But it has no orders. This last item leaves many scratching their heads.
It would be useful to remember that the A330 has been Airbus’ ace in the hole. This program has delivered orders year after year. And Airbus has managed to improve its performance time after time. This latest variant, the A330neo, fairly leaps ahead of the A330ceo. Lessons from the A350 have been applied to the wing providing remarkable improvements. In addition, the new engines are a generation improved as well.
Airbus produced this chart that helps to offer some perspective.
A key item here is to look at when the 787 emerged. It looked like the 787 was going to outclass the A330 as it did the 767. But then came the 787 fumbles. Customers moved to the A330 and orders jumped for the A330. While the 787 has made a successful comeback, and the 787-9 model shows particular promise, the A330 has kept on winning orders. The A330neo shows promise. Of course, that interest to date has been in the A330-900. The A330-800 is struggling to gain traction.
However, it would be prudent not to dismiss the A330 as dated. Airbus has managed to keep the aircraft current time and again. The A330 platform has proven to be remarkably effective. Don’t diss the A330.
At the A350-1000 delivery today in Toulouse, Airbus has made it clear they are not focusing on a further stretch. “For the time being, there are no plans. We don’t see the need,” Marisa Lucas-Ugena, head of A350 XWB Marketing, told Reuters in Toulouse.
A further stretch of the A350, beyond the -1000, is thought by some to be necessary to better compete with the 777-9. But what does the market look like?
The first chart shows that the newer aircraft in service (3Y17) are tending towards four seating segments, from most popular to least: 250-300, >400, <250 and 301-350. As the fleet age increases beyond 15 years we can see the fleet seating segments have changed.
To get another view of the active fleet, we cut off beyond 20 years and see the same data as in the first chart in another form. What we see is relative fleet sizes.
If that is what the market looks like, where do the two big OEMs stand? First Airbus. As we can see Airbus’ strength is in the 251-300 segment. It also has strength in the >400 seat segment. The former is A330 territory and the latter is the A380 territory. The growing A350-900 fleet is in the 301-350 seat segment, which has been a relative weakness for Airbus. The A350-1000 should be in the next category up with 366 seats, which has been another relatively weak spot for Airbus.
Next, we look at Boeing. Boeing is doing well in the <250 segment with its 787-8 which is helping to recover fleet size after the running down of the 767. The 787-9 is boosting fleet size in the next segment from 251-300 seats, where its previous strength came from the tiny 777-200LR fleet. In the 301-350 segment, Boeing is seeing declining fleet as the 777-200ER fades. The hope must be that the 787-10 takes over and recovers that segment. The 351-400 seat segment is the Boeing’s sweet spot with the powerhouse 777-300ER.
Finally, putting the data together for the segments we see the following. The most market activity is in the Airbus stronghold from 251-300 seats. This is the segment where the 787-9 and A330neo will face off. Airbus also offers the A350-900 in this segment. The next big segment is between 351-400 seats where the 777-8 and the A350-1000 will face off.
The third segment is the <250 seat market, where the 787-8 operates. Airbus is trying to push its A321 into this space and combine it with the A330neo. The current fleet is about 640 aircraft, of which 38% are 767-300ERs. Can Airbus make airlines a better offer using a combination of the A330neo and A321neo? A tough call as the A330-800 has no traction. Boeing is likely to push its NMA into this segment which leaves one wondering what happens with the 787-8? There is a limit to how one slices a segment.
Is there a market for the “A350-1100”? Since that aircraft will be competing with the 777-9, which is expected to seat 400-425, it is important to know there are only 346 aircraft in that segment in service. Of those, 62% are A380s and the balance are 747s. Boeing has 273 orders for the 777-9. This is a niche market – but we think it is bound to grow because of airport congestion.
The 777-9 has a list price of $389m and the A380 is listed at $446m. The 777-9 seats 77% of the A380’s capacity and is priced at 87% of its list price. This makes the 777-9 relatively expensive; Boeing is likely to argue they can charge a premium. The market currently looks small to add an “A350-1000”. There is probably too much risk for Airbus. Besides, what will they use for an engine?
Airbus might be better placed to focus on the <250 seat segment as this is an 85% larger market. This where Boeing is focusing next with its NMA.
The big OEMs have new models to show off today.
Airbus has its new A330-800 out of the paint shop.
Boeing has its new 737 MAX7 also out of the paint shop.
This is great for both companies. Except the market has not embraced either model. So what happens next will be most interesting. What will these OEMs do to get these models into the amrket and make them attarctive?
Airbus has been rather quiet about this program since the first flight in October. The A330neo flight test program has been making good progress.
The program has two of the program’s planned three test aircraft flying. The two flying are A330-900s, with an A330-800 set to be the third test aircraft to being flying later this year.
EIS for the -900 is planned for mid-2018 with TAP. These A330neos are to replace the A330-300 and -200, respectively. There is a lot riding on this program. CIT and ALC, both influential lessors, have opined that the A330neo obviates the need for the A350-800, and Airbus agreed, dropping the smallest A350 variant.
Given the growing attention to the Middle of the Market, or MoM, Airbus uses the A330neo to serve as the top of its middle-market offerings, with the A321neo taking the 757-200 market at the lower end. Inside this basket, Boeing has the MAX10 and the 787-8, with plans to introduce the 797-7 and -8. The current Boeing offerings do not effectively compete, as the MAX10 lacks the performance of the A321neo (Boeing disagrees) and the 787-8 has too much range for this segment (as Airbus discovered with the A350-800). As a result, Boeing feels the market needs a new aircraft.
Airbus has pointed out to us that they can use the A330neo to box Boeing in by being able to match the key numbers customers need in terms of payload and range, while offering lower capital costs and near equivalent operating costs. Since airlines are bottom fishers, the Airbus economic story appears compelling. However, orders to date have been considerably lighter than Airbus hoped for, as the market wants to know what Boeing will do.
There are only six firm orders for the -800, with Hawaiian airline. But that order looks potentially weak as the airline is said to be looking at the 787. Hawaiian is the hold out on the -800, with other customers moving up to the -900, which has 219 firm orders. Hawaiian has eight aging 767s it wants to replace by the end of 2018. Some of these are going to be replaced by the A321neo in smaller markets. Even as the airline looks at the 787, it will need to trade-off its small fleet requirement against the 787s costs. The math won’t be an easy slam dunk.
Is there a market for the -800? Looking at the A330-200 fleet it appears the market is getting smaller for that size aircraft. Perhaps the A330-800 can revitalize this segment, but it looks like an uphill battle. It should be noted the A330-200 is the basis for the freighter and also the MRTT military tanker. Could Airbus be looking at the -800 as the basis for a freighter and MRTT?
By contrast, the -900 is on firmer ground. There are 219 orders and included in the customer base are bankable brands like Delta Air Lines, CIT, ALC and AirAsia X. Moreover, the A330-300 fleet remains the larger of the “ceo” variants.
Airbus still has a winner in the A330 program. The program has delivered for customers and the -900 looks like it will be the new standard bearer for the program. As the A321neo capabilities creep higher, and with a potential “A322” in the wings, Airbus small wide-body faces a decision. Should it remain to compete on price with the 797, or might the A330-800 go the way of the A350-800? Can Airbus make the third flight test aircraft work as freighter and MRTT? Both of which are niche markets.
It will be interesting to watch how Airbus negotiates its way with the A330neo program against future competition from Boeing.
Airbus reported this morning that the A330-800 assembly has begun.
“Final assembly of the newest member of the A330neo Family, the A330-800, has started and is on track for the first flight planned in mid-2018.
The A330-800 complements the A330-900, the largest member of the A330neo Family. With its 242-tonne Maximum Take-Off Weight (MTOW) as base variant, the A330-800 can operate routes of up to 7,500nm and with the recently launched 251-tonne MTOW variant the aircraft can operate ultra-long-range routes of up to 8,150nm. Together, the A330neo variants are part of the world’s most comprehensive twin-aisle, twin-engine aircraft family from 260 to over 360 seats which includes the A350 XWB Family.
The most visible new features of the A330neo wings are the specially developed curved wingtip Sharklets – which draw on A350 XWB technology, extending the wingspan to 64m, providing state of the art aerodynamic characteristics.
Airlines will benefit from 25% less fuel burn per seat compared to previous generation competitors, reduced maintenance costs and the A330’s market-leading 99.5% operational reliability. Passengers will enjoy the award-winning all new Airspace cabin inspired by the A350 XWB. On top of latest generation In-flight entertainment and connectivity, passengers can look forward to a new welcoming entrance area, spacious overhead bins, mood lighting and exceptionally quiet flights.
With close to 1,700 orders, the A330 is the most popular wide-body aircraft ever, having flown nearly 1,000,000 annual flights. Today, over 1,300 aircraft have been delivered to 117 customers worldwide on a wide range of routes, from domestic and regional flights to long range intercontinental services. Offering the lowest operating costs in its category, and thanks to continuous investments in latest innovations, the new generation A330neo will be the most profitable and best performing aircraft in its size category.”
Moving ahead with this program might be on time, but is there a market? Hawaiian placed an order in 2014 for six. Since then, crickets. What does the fleet data show that gives Airbus confidence in the A330-800?
For a start, the predecesor A330-200 program has been a success. As the data illustrates the percent of the fleet that is active since 2000 has averaged 97%. This suggests the A330-200 is an aircraft size that has a strong market demand. Airbus got this model right.
Next, why the slow orders for the A330-800? Perhaps the answer is simply that the current active fleet is young and still delivering the level of performance operators want. There may simply no urgency to jump on to delivery slots.
Where are the potential opportunities for the A330-800? Looking at the current active A330-200 fleet we can see there are certain markets that warrant attention for replacements. As of 2Q17, only 28 were parked with an average age of 10.9 years.
Will the A330-800 sell as many aircraft as the A330-200? There is a good argument that the answer is no. But Airbus could sell enough to warrant the development. Besides, looking at the current operators, there is no obvious replacement other than the A330-800.
These operators represent half the total fleet. The A330-200 offers the ability to deliver widebody loads over long hauls at low cost. The A330-800 will do more of the same; more payload (4%) and more range (3.5%). And accomplish this at 12-14% better economics than the older model.
While the A330-800 may not sell as well as the A330-200, it should offer many A330-200 customers the right combination of performance and costs. It is too soon to dismiss the A330-800.