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July 17, 2024
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This looks like a big week for Airbus.  Early this morning in Toulouse, the first A330neo for Air Portugal was rolled out of the paint shop.

Air Portugal is the launch customer for this model.   The A330neo is a substantial upgrade from the current generation A330.  The A330neo is going to be focusing replacing the current A330s in service as they retire.

There were over 1,300 delivered, and of these only 49 are parked.  Airbus has seen a slow order pace on the A330neo, perhaps in part, because the current A330 has been such a success.  The average age of those in service is just under 12 years.  However, Airbus is also aiming at the replacement market for the 777-200ER.   There are 28 parked and 373 in service.  Of those in service, they average about 13 years old.

The table shows how carefully Airbus calibrated the A330-900 against the A330-300 and 777-200ER.  Airbus will see its A330-900 compete in this market with the 787-9.

Boeing has a far more efficient aircraft in the 787-9 compared to the 777-200ER.  For about the same capacity and range, the 787-9 at about the same size, has about 15% lower MTOW, requires 24% less thrust flies a tad faster and is only about 100 NM shorter on range.

Airbus, comparing the current and new models, has a 4% higher MTOW, a 3% improved range, a 4% better capacity in about the same size aircraft.  The A330-900 has a much better wing and a newer generation of engines.

Whereas Boeing took a big leap from the 777-200ER to the 787-9, Airbus took a more sedate step in its upgrade.  The key difference here is range and price.  Boeing wins on range for those airlines seeking that feature.  Airbus will win on price.  How many airlines are willing to pay for that extra 1,0000 NM?  Or better yet, how much premium can Boeing get for that capability?  American Airlines is doing this tradeoff.  If, as Airbus argues, the A330-900 can reach most of the markets these aircraft serve,  then the extra range of the 787-9 is doing to be discounted to more closely match the expected price of the A330-900.  Airbus, we think, will be able to make the A330-900 profitable at far fewer deliveries than Boeing can with the 787-9.

Tomorrow, Airbus will deliver its first A350-1000 to Qatar Airways.

Airbus recently took an A350-1000 on a world tour to the Singapore air show and then across Asia and the Middle East.  The tour took 24 flights, generated 87 flight hours, nearly 35,000 miles and the aircraft had over 10,000 visitors. This model of the A350XWB family aims squarely at the 777-300ER market.

The 777-300ER is an aircraft Airbus would dearly love to beat.  Just as the A330 outclassed the 767, Boeing’s 777-200ER beat the first generation A340 and then 777-300ER outclassed the updated A340.  The 777-300ER arguably even impacted the A380.  With the 777-300ER, Boeing hit a sweet spot.   There are close to 760 of these in service, and only three are parked.  The fleet averages just over seven years old.

The A350-1000 has a tough fight ahead.  Firstly, the 777-300ER is in many ways the benchmark long-haul airliner today.  Airbus can’t match it and win.  Airbus needs to beat it by a big margin to attract attention.  Airbus also has to do this quickly because Boeing has the 777X coming in 2020.

The table compares the A350-1000 with the 777-300ER and the similarly proportioned 777-8.  What we can see is that Airbus has a footprint that is very close to the Boeing models.  But by using lighter materials, Airbus has an MTOW advantage of over 12%.  Airbus also needs about 16% less thrust.  Airbus offers over 8% more range.  This appears to give Airbus a large enough margin over the 777-300ER to attract attention.

However, the market evolves and the 777-8 cannot be ignored.  The newer Boeing will have nearly 1,000NM more range (longer range seems to be a Boeing thing) and much larger wing (folding).  But the 777-8 does not offer more seating than the A350-1000.

When we look at the order book, Boeing has 53 777-8 sold compared to 169 for the A350-1000.  Of some concern to Boeing, many of the A350-1000 orders came from airlines currently operating the 777-300ER.  The 777-8 orders come from three airlines, Etihad, Qatar, and Emirates.  These three airlines are attracted to the range feature so they can connect every spot through their hubs.   While these three airlines have shown strong growth rates in the past, currently they are growing at a much slower rate.  Moreover, among the A350-1000 customers are Etihad and Qatar.  Also, Airbus has 20 orders from Cathay Pacific which has also ordered the 777-9 which is a much larger aircraft.

In summary, this is a big week for Airbus because two of its new widebodies are emerging.  Airbus has been behind Boeing in the widebody race for some time.  But it now will be able to field a lower cost option in the A330-900 to replace older A330s and 777-200ERs and also an excellent replacement for the 777-300ER in the A350-1000.  Airbus has much stronger offerings in the widebody segment looking forward.

author avatar
Addison Schonland
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.

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