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April 17, 2024
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As Airbus and Bombardier move through, what appears, to be a smooth transition, what might one start thinking about in terms of the market?  Currently, it looks like the CS program will be under the Airbus flag by Farnborough.

For Airbus, the most logical place to see opportunities for the CS program will among its own customers.  Specifically, those who use the A318 and A319.  The former is easily replaced by the CS100 and the latter by the CS300.   While the new CS partnership will chase every deal that pits them against Boeing, it makes sense to see any aging Airbus as a lower hurdle to keep “on-side”.

The table lists the fleet as at year end 2017.  The A318 was not a great success but has the right profile for replacement by the CS100, which is a far more capable aircraft.  The A319 has been a much better market success and the CS300 is a good replacement. The A319 is clearly the far more important market.  We are sanguine about the future of the A319neo.

Together Airbus should be able to deliver nearly 1,500 replacement orders to the CS program.   This is encouraging.  The problem is that these Airbus models are well under 15 years old, which is the time when they start to retire. Moreover, the A318 and A319 have no second life as freighters.  Consequently, owners run them until they are done.  The largest parked fleet of A319s at December 31st was Eurowings with nine.

Since fuel prices have remained manageable for airlines, and new deliveries have run late, existing aircraft have remained in demand.  This was a theme repeated at the recent ISTAT Americas event. Of the 47 parked A319s, 11 are over 15 years old.  Some are owned by lessors. It seems reasonable to think these aircraft will likely be parted out.  Even so, only 3.3% of the A319 fleet is parked.

Airbus, therefore, has something of an uphill battle when it comes to replacement marketing.  Making things worse, Bombardier does not seem to be able to deliver fast enough as it is.  The need for more production capacity is clear.  The Alabama FAL is needed to support the expected US demand.

There is US demand pending – American alone has 123 A319s averaging 12.4 years old.  Many of those are ex-US Airways and really old.  Besides the A319 has not proven popular at American. Many orders were converted to the A321.  More pending demand are the ex-Northwest A319s at Delta.  There 57 averaging 16.3 years old.  Delta has already started to solve that problem.  United has 66 A319s averaging 16.4 years old. The US offers lots of low hanging fruit you might think.

There are other targets that are equally attractive. One of the key targets is an old Airbus favorite – Air France.  Air France has 56 A318s (18) and A319s (38) and this airline is seen as a key opportunity for Airbus and the CS program.  The other “half” of Air France/KLM is firmly in the Embraer camp for this segment.

Another key target for Airbus would be the Lufthansa Group which has 109 A319s averaging 12.8 years.   Fortunately for Airbus, group member SWISS was the launch customer for the CS.  The airline is pleased with how the aircraft performs, although as the link about shows, less happy with the Mirabel deliveries.

Looking around the globe we can see where Airbus needs to focus. Fully 61% of the A319 replacement exists in the EU and US market.  Both markets are close to the 15-year-old hurdle.

If Mirabel keeps struggling with deliveries, we might expect the Alabama FAL to be moved along smartly.  However, considering the supply and potential demand, is a FAL in Toulouse or Hamburg off the table?

The forthcoming air show this summer is bound to drive more interest than usual.

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Co-Founder AirInsight. My previous life includes stints at Shell South Africa, CIC Research, and PA Consulting. Got bitten by the aviation bug and ended up an Avgeek. Then the data bug got me, making me a curious Avgeek seeking data-driven logic. Also, I appreciate conversations with smart people from whom I learn so much. Summary: I am very fortunate to work with and converse with great people.

3 thoughts on “Airbus and the C Series

  1. A CS FAL in Europe? Never. That would be politically impossible to sell here, in Quebec. The Alabama FAL is tolerated, because of US protectionism. But in Europe? Nope.

  2. Never in Europe? Not so sure… You can count on Bombardier to trot out a couple of university professors to explain to naysayers that a European FAL will generate sales that could never have been made otherwise. And these added sales will be beneficial to Bombardier’s operations and subcontractors in Québec.

    After all, a couple of university professors have already endorsed the *gift* of the C Series to Airbus with similar arguments.

  3. Well, there is nothing wrong in eventually diversifying FAL facilities, if it makes financial sense.

    It diminishes risks, and keeps each facilities “honest” (as in not keeping production hostage… ). PWC has done just that, in Canada, and abroad.

    Obviously, sales backlog must warrant those additional FALs. We’re not quite there yet.

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