Airbus’ A330 improvements aimed at maintaining market position vs 787
Airbus last week announced additional gross weight upgrades and improvements to the A330-200/300 that increase range and reduce fuel burn. Aviation Week has this story about the enhancements.
This is the latest in a series of improvements taking advantage of the four year delay in the Boeing 787 program that Airbus believes will enable the airplane, which first entered service in 1994, to remain viable well into the 2020 decade.
Boeing launched the 787 in December 2003 and promptly claimed the aircraft would kill the A330. Had the aircraft entered service in May 2008 as originally planned, Boeing might have been able to make strides to do so. But delays allowed Airbus time to incorporate several Performance Improvement Packages (PIPs). The European company has sold more A330s post-787 launch than it did before.
The latest improvements give the A330-300 an anticipated range of more than 6,000nm, compared with less than 4,000nm when the airplane entered service.
Now Boeing is closing in on developing the 787-10 derivative. A “soft” Authority to Offer (ATO) was approved by the Board of Directors in October, but a formal launch is now not expected until next June, in time for the Paris Air Show. British Airways, Singapore Airlines, Lufthansa Airlines and Air Lease Corp are widely talked about in aviation circles as the launch customers. The -10 currently has a range target of 6,700nm but there is some pressure on Boeing to increase this to 7,000nm. EIS is now targeted for 2018 or later, according to a person close to the program. An original target EIS date, according to potential customers we’ve talked to, had been 2016.
The 787-10 will have better operating costs than the A330-300 and more range, even with the recently announced enhancements. But the low pricing of the A330-300 goes a long way to keeping the airplane competitive, and the improved range enables the aircraft to cover 90% of the missions for most airlines.
Boeing is not yet talking pricing for the 787-10 as best we can determine. Disregarding the list prices of either OEM (they are meaningless), we understand the 787-9 current is selling for $120m+. The A330-300 is currently selling for around $100m, according to our sources.
Recall that we’ve previously written that Airbus cited $900,000 and $1.2m monthly lease rates for the -300 and the -9 in public presentations, thus validating the market intel of the capital cost of buying the aircraft.
Will the 787-10 “kill” the A330-300, as Boeing claims? “Eventually” is the answer we received during our trip last week in which we talked with lessors, analysts and advisors. But the view is that this will be 10-12 years away. With an EIS now targeted for 2018 or later for the -10, Boeing can’t produce enough -10s to make a dent in the market until well into the 2020 decade, at which point the A330 will be nearing the end of its natural life cycle in its current form. This undoubtedly is why Airbus is now saying it will sell the A330 beyond 2020.
Note that we said the A330 “in its current form.”
Suppose eventually Airbus decides to proceed with an A330neo, using GEnx or Rolls-Royce Trent 1000 engines with enhancements to 2020 standards? For about $2.5bn in today’s dollars, Airbus could have an inexpensive competitor to the 787-9/10 with much better fuel costs, perhaps on the order of 8%-9% or more for engines plus another several percent for the airframe. This is the approach it tried to take for the A350 V 1.0, to market disdain. This is the approach Boeing seems to be taking for the 777X.
The A350 V 1.0 was a poor concept. But simply doing an enhanced A330neo may well make some sense by the turn of the decade.
One customer we talked with predicted Airbus will proceed with a neo, though he had no timeline forecast.
As of today, Airbus is not, repeat not, talking with the engine OEMs about an A330neo. But never say never.
See this article commenting on the Airbus-Boeing ad wars. We couldn’t say it better. The article concludes: “As Boeing and Airbus dispute each other’s claims, their customers (the airlines) will objectively evaluate which one provides the greater bundle of benefits. If one has a decided advantage over the other, the marketplace will discover the truth and undoubtedly favor the plane that can deliver the combination of safety, economy, and comfort that airline passengers want.” Since Airbus currently has 86% of the VLA market and 60% of the single-aisle re-engine market, one could argue the customers have indeed chosen.