A Commercial Aviation Consultancy

UnknownAirbus and Rolls-Royce have combined on a program to enhance the residual values and market viability of the A340-500 and -600, which have been removed from many airline fleets due to unfavorable economics.  Rolls-Royce has stepped up with a “four for the price of two” program in which they will guarantee engine maintenance costs at the same level for maintaining two GE90s on a Boeing 777-300ER.  This will help bring the economics of the A340-500/600, which suffers from unfavorable engine maintenance costs, in line with two-engined competitors.

In addition, Airbus is certifying the A340-600 to a maximum of 475 seats in all economy seating, in an effort to become a viable replacement for the 747-400 for many carriers currently operating that type, making the aircraft more attractive to ULCC and charter operators.

Airbus has a significant number of residual value guarantees for the A340, and is taking this action to avoid potential losses from guarantees, and convince customers that the A340 can be a viable interim aircraft, if not for a longer period, before the A350 arrives.

One potential solution to Airbus difficulties with the A340 program is waiting in the wings, as Iran Air needs a new fleet.  With theUnknown-1 current economic sanctions likely to disappear in the near future, there is a ready potential market for the 25 A340 aircraft currently in storage.  Iran Air needs new lift, and Airbus and Rolls-Royce have new programs that will make that option economically viable.  At the current lower aircraft values, used A340s could provide Iran Air with the opportunity to re-fleet with modern aircraft quickly, at much lower capital costs than would otherwise be possible.  This is especially important in a market with multi-year backlogs for the most popular new models, and the age of Iran Air’s current fleet.

Could Iran Air be a big part of  win-win solution to the A340 dilemma?  It makes sense for both parties, so stay tuned.

© 2013, Ernest S. Arvai. All rights reserved.

5 Responses to Airbus and Rolls-Royce Announce Plans to Restore A340 Economically Viability

  • Iran needs A320/A330 size and range aircraft. They have a very limited requirement for A340-500/600, and that is on the assumption Iran will hold its end of the bargain. As for RR “four for two” a very interesting concept which means that RR will take a hit on its profit or they have been overcharging their customers, just saying.

    • I believe the current sanctions regime limits sales to Iran to aircraft with less than 10% US content. That seems to eliminate Boeing aircraft of course, but also all aircraft with GE or Pratt engines (ie all modern narrowbodies), leaving, maybe, the Airbus A330 and A340-600 with Rolls Royce engines.

      • Correct. But France is being very strong on forcing Iran to comply with the strictest understanding of sanctions.

      • And the use of US dollars, which a few airlines and companies have been fined substantially for in the past, eg Qantas selling their 747s via subsidiaries to Air Iran, infact the aircraft were flying under charter in Qantas colours

    • But Air Iran don’t have any ETOPs so they need 4 engines

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