“American Airlines is a big customer. Every OEM wants their equipment flown by this airline. Losing this customer is not something that goes down easily. The considered opinions are the loss of an order for Airbus is awful (series of blows?, despair?). This “loss” spreads to the A350 program as well.
The list prices of the respective 787s are lower than the list prices on the A330-900 and the A350-900. But we believe prices were equalized and rock bottom for this deal. Especially on the A330neo.
Many years ago, Airbus made a disruptive win at American. The airline wanted a twin-engine widebody for domestic service. McDonnell-Douglas was the airline’s primary vendor and toyed with the idea of a twin-engine DC10. Yes, this is what it might have looked like. But the OEM didn’t buy the concept.
What did American do? They bought what they wanted. It came as a shock but the A300 served the airline for a long time.
American went on to grow very large. It swallowed TWA. Then it swallowed America West, except the swallowed brand, actually took over management. The new airline became the world’s largest by fleet size. It also became the largest Airbus customer after the America West merger. Airbus was back in-house. The chart shows how the airline has spread its business around over the years. Notice the Airbus fleet has been growing at American to about 400 aircraft.
Having demonstrated that Airbus is in no way “out” at the airline, let’s provide some other perspective.
As of the end of 2017, there were over 1,200 A330s in service. The fleet is young at an average of under ten years old. There is, therefore, no rush to replace these aircraft. The A330 customer base is as widespread as you would expect from single-aisle aircraft. Airbus argues, plausibly, that the A330neo is the perfect replacement for the A330.
Indeed, some of the older A330s flying today were in service with Air Berlin. All of them have been redeployed. Why is that? Because the A330 is in demand as a workhorse. It is, without a doubt, the best widebody Airbus has produced. The chart shows that only the 777 has outsold the A330 in widebodies and they are only 10 points apart.
The table above also indicates just how influential the US market (essentially American) is in the scheme of things. Of the 1,364 A330s in service now, the USA represents 6.6%.
Is American a tough loss for Airbus? Yes. It would have been great for Airbus to land the airline as an A330neo customer as well as an A350 operator. Since Airbus has Delta doing exactly that, we will see how Delta’s service demonstrates the effectiveness of these aircraft.
So, keep the “loss” in perspective. There is one more item to consider. What do you suppose will happen to the deposits American paid to Airbus? Certainly, the airline will not want to forgo that. Take note American stated in its 787 announcement, that it reached an agreement with Boeing to defer delivery of 40 737 MAXs that had previously been scheduled for 2020-22, with the revised delivery schedule better aligning with planned retirements of other narrowbody aircraft.
Which is, we think, another way of saying the story isn’t over yet.