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The development of a ZEROe hydrogen airliner versus a new conventional aircraft, the status of the A220 program including the stretch, and how realistic the huge order backlog is. AirInsight had plenty to discuss at the Dubai Airshow when we sat down with Bob Lange, Head of Market and Product Strategy of Airbus. Here is our interview. Hydrogen versus a new conventional airliner AirInsight – Airbus is making good progress with the development of the ZEROe project for a new airliner using hydrogen, which should be launched by 2027/2028 and enter service around 2035. At the same, Guillaume Faury has said that Airbus might have to develop new aircraft using conventional or sustainable aviation fuels. Is Airbus putting its eggs in two baskets? Bob Lange – “There are many different things at play here. First of all, ZEROe itself. We are pursuing different technology options as we are looking at hydrogen fuel cells but we are equally looking at hydrogen burn. Those are being pursued in parallel and we haven’t taken the decision on which of those comes first. This is being de-risked technologically as we speak. We need to fly both concepts (on an A380 testbed) before we take that decision.” “Equally, we have set out a clear ambition to be the first to bring a true zero-emission aircraft to service in 2035. If you look right and left, that infers a launch date in the 2027-2028 time frame. But at the same time, for a hydrogen aircraft to be in service, it is not just the technology on the aircraft itself. It is the airport infrastructure and the handling of hydrogen. As you have seen, we are multiplying the activities to de-risk that with external partners, with airports, with fuel suppliers, with the local authorities, with the certification of that. This hydrogen ecosystem is at least as important as the vehicle itself. When we go down that path, all these things need to come together. That’s carrying on the pace.” “We are communicating on each of our milestones and steps as we go on that, but equally, that is one element in multiple levers we need towards decarbonization of the industry. Sustainable aviation fuels (SAF) are a huge lever in that. We know that on different continents, we have different SAF pathways. We have to ramp up to 10 percent in the 2030 timeframe. Equally, we need to ramp up to more than 50 percent by 2050.” One of the concepts of an Airbus ZEROe hydrogen airliner. Development of a new airliner using more conventional next-gen technology will continue. (Airbus) “We know that for the heavier, bigger, longer-range aircraft, SAF is really carrying the bulk of the effort to decarbonize that sector. We know that for large transport aircraft, we need to continue the next step beyond the fleet renewal. One of the things we are seeing at the moment is a huge demand for new aircraft, which is partly driven by the fact that it is the clearest next step that people can take. But beyond that, we know that from the second half of the next decade onwards, we need the next steps in aircraft that will still burn SAF and a mixture of SAF and kerosene. Hence, the communication we started earlier this year to say that we are going to work on that in parallel. You see that from our different technological enablers that have been done by subsidiaries like Airbus UpNext.” AirInsight – You mention the hydrogen ecosystem, you mention the SAF ecosystem. Are you happy with the pace both are going? In June, IATA said at the AGM that they were optimistic about the timeline for the production of SAF toward 2030. Do you share this view? And what about hydrogen? Bob Lange – “I had a slightly different take of IATA and of the interesting comments that also came at the more recent IATA Sustainability Summit in Madrid in October. There was a shared understanding that the pace (of ramping up SAF production) is not fast enough. Of course, IATA and its members are as concerned as everybody is that the pace has to be there, but the affordability has to be there as well. The clear message that comes from airlines and manufacturers alike is that the demand is there and the actors are prepared to commit to the demand. However, the investments to catalyze the production need to come in parallel. (This was one of the main topics at last week’s ICAO summit on SAF and cleaner fuels - RS).” “We see a lot of very good signs, we see momentum building. That’s a very positive sign. Is it going fast enough? Too early to say, but I personally feel a mild degree of frustration. I see very encouraging steps, but maybe I am more impatient in wanting to see the pace of progress.” AirInsight – And what about hydrogen? Bob Lange – “On hydrogen, equally, we are starting to see more investments. That is very encouraging. What we should not forget is that when you look at the SAF feedstocks and SAF production pathways, some are perhaps more accessible in the short term but start to get into feedstock problems as you get into the medium term. In the medium term, we know that we are going to need power-to-liquid synthetic fuels, which are going to take a big part of that burden. Those are the SAFs which at a slightly lower state of maturity need the most investment to go in. Equally, they are very dependent on green hydrogen. We are here in Dubai. The Middle East is a really great place to invest in green hydrogen and a good place to access solar energy.” AirInsight – The first hydrogen aircraft from Airbus will likely be a 100-seater, based on what we have seen so far in renderings. Does this implicate that Airbus will be doing an A350neo from the 2030s when your current exclusive contracts with Rolls-Royce for the XWB-84 expire? Bob Lange – “I wouldn’t go making linkages between the engine supply contracts and re-engineing. Re-engineing will be driven by technology. UltraFan is something that Rolls-Royce is working on and we have done a lot of encouragements in working with Rolls on UltraFan. It is a key step for the future. The pacing of the technology will be one of the pacing elements for the next generation of widebodies, but not only widebodies.” “When you see in the single-aisle space, you see the GE/CFM RISE open rotor initiative, which we will also be testing on an A380 demonstrator. You can see that e will be moving as an industry to the next step of engine technologies. Those technologies as well as the airframe technologies we are researching through the Wing of Tomorrow program and the demonstrators we are doing with UpNext, will be converging to a point that will enable the next generation of aircraft that as I said will burn a mix of SAF and kerosene.” [caption id="attachment_79454" align="aligncenter" width="875"] Airbus first wants to stabilize the A220 program before it offers a stretched version. (airBaltic)[/caption] Airbus A220 stretch AirInsight – Various airlines have been pushing Airbus to launch a stretched A220 for some time. Chief Commercial Officer Christian Scherer has said on multiple occasions that it is not a question of ‘if’ but ‘when’. He reiterated here in Dubai again that Airbus will not launch the A220-stretch soon. What is the reason that Airbus isn’t committing to a launch date yet? Is it because it will compete with the A320neo and you don’t want to cannibalize this market? Bob Lange – “No, I think the market is big enough. The two aircraft are different. You have airlines that operate large fleets of A320s and A321s. They are choosing largely A321s at the moment. The A320neo will continue to be the logical companion to the A321neo. But as airlines build fleets of A220-100s and -300s, there is a clear desire for a third member of the family above the size of the -300. We can all see the appetite in the market for a larger member.” “What we have said so far hasn’t changed. It is a question of “when” and not “if”, but a number of things need to come together for that to happen. Firstly, we have to bring our A220 program industrially to maturity, which means having it ramped up to its full rate of 14 aircraft per month (by 2026). A lot of that is having the program stable. Let’s be clear about that: Covid caused all kinds of disruptions to the supply chain at every level. That ramp-up is taking us longer to achieve than we were expecting pre-Covid.” “Then when we look at the situation of the engine manufacturers globally, they are going through a torrid time because of their own supply chain issues. So we need to have this stability in the system to be able to incorporate that stability into our own plans. Those two things need to happen before we will take any decision.” AirInsight – The A220 is now a year part of the Airbus program. There are now two assembly lines: Mirabel and Mobile. Mobile was launched in response to the threat of trade sanctions by the US after Delta Air Lines ordered the Bombardier CSeries. But with the low rates Mobile is doing, can the program ever make money there? Bob Lange – “Indeed, we have two final assembly lines, but as you know in our Airbus processes, the final assembly line is actually a small portion of the manhours that go into an aircraft. It is the very visible end part of the process, but as you start to look at the aerostructures part, the fuselage sections, and wings, we are not equally duplicating those to the same standards. We have the process in place to get to break even on the A220. It is just the supply chain issues that are taking us longer to achieve than we hoped.” Airbus CCO Christian Scherer (left) and Bob Lange during the 2019 Global Market Forecast presentation (Airbus) Order bubble AirInsight – Then the last topic: the aircraft market itself. Airbus and Boeing both have huge order backlogs. Some analysts say that many of these aircraft on order will never be delivered and the market is in a bubble that will burst. You have been in this business for many years – have you seen similar moments in your career? Bob Lange – “Many times. But if you look at the historical data, you don’t see so much the aircraft that don’t get delivered unless you actually see huge crises like 9/11 or Covid, when production rates are going just downwards. What tends to happen, and this happens in normal business, is that airlines commit to significant volumes of aircraft over contracted periods. Why do they do so? Because, ultimately, for particular sizes of aircraft, an airline only has a choice of two or three models and suppliers to choose from.” “Airlines are competing with each other. They want the aircraft they prefer at the best pricing they can get. The best way to lock in good pricing is to commit to significant numbers of aircraft because it is the only way a manufacturer can justify lower pricing by having lower costs by producing more of the same thing. An airline that knows it can provide that stability, knows it can then expect a better deal because of that. But it is a two-sided process because the airline also knows they have to hold up their part of the bargain. So you see the bigger, stronger airlines choose very carefully when they choose to commit.” “What you are seeing at the moment is a phenomenon which is the industry catching up from what was already starting to happen pre-Covid. Pre-Covid, and the data shows this, we were starting to see a slowdown in aircraft retirements below what normal trends were. During Covid, aircraft were being parked and stored but they weren’t retired or parted out. As demand bounced back after Covid, aircraft were put back into service. But because of this dip in Covid, there were, in the case of single-aisle aircraft, close to 2.000 aircraft that weren’t produced and about 400 widebodies. So if you look at the backlog of delayed retirements, the aircraft that weren’t produced. At the same time, you look at the imperative for decarbonization. We talked earlier if SAF is coming fast enough. Those are elements of uncertainty.” “The one thing that is certain is that today, only 25 percent of the world’s fleet is latest-generation technology, which is accessible today by placing orders. So if you have the financial strength, and it will be evident in the end-of-year IATA profitability figures, you can see why airlines have the confidence to commit. They know they are committing to a scarce resource, so they are choosing to make their commitments now. But these deliveries won’t disappear. If there are rocks in the road later, they may end up being spread out, but they don’t disappear.”

US Flight Planner - US DoT On-Time Data	Airbus vs Boeing - Official OEM Data
US Airline Schedule Performance - US DoT Data	Daily OEM Production & Deliveries -

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