At the A350-1000 delivery today in Toulouse, Airbus has made it clear they are not focusing on a further stretch.  “For the time being, there are no plans. We don’t see the need,” Marisa Lucas-Ugena, head of A350 XWB Marketing, told Reuters in Toulouse.

A further stretch of the A350, beyond the -1000, is thought by some to be necessary to better compete with the 777-9.  But what does the market look like?

The first chart shows that the newer in service (3Y17) are tending towards four seating segments, from most popular to least: 250-300, >400, <250 and 301-350.  As the fleet age increases beyond 15 years we can see the fleet seating segments have changed.

To get another view of the active fleet, we cut off beyond 20 years and see the same data as in the first chart in another form.  What we see is relative fleet sizes.

If that is what the market looks like, where do the two big OEMs stand?  First Airbus.  As we can see Airbus’ strength is in the 251-300 segment.  It also has strength in the >400 seat segment.  The former is A330 territory and the latter is the A380 territory.  The growing A350-900 fleet is in the 301-350 seat segment, which has been a relative weakness for Airbus. The A350-1000 should be in the next category up with 366 seats, which has been another relatively weak spot for Airbus.

Next, we look at Boeing.  Boeing is doing well in the <250 segment with its -8 which is helping to recover fleet size after the running down of the 767.   The 787-9 is boosting fleet size in the next segment from 251-300 seats, where its previous strength came from the tiny 777-200LR fleet.   In the 301-350 segment, Boeing is seeing declining fleet as the 777-200ER fades.  The hope must be that the -10 takes over and recovers that segment.  The 351-400 seat segment is the Boeing’s sweet spot with the powerhouse 777-300ER.

Finally, putting the data together for the segments we see the following.  The most market activity is in the Airbus stronghold from 251-300 seats.  This is the segment where the -9 and A330neo will face off.  Airbus also offers the A350-900 in this segment.  The next big segment is between 351-400 seats where the 777-8 and the A350-1000 will face off.

The third segment is the <250 seat market, where the -8 operates.  Airbus is trying to push its A321 into this space and combine it with the A330neo.  The current fleet is about 640 aircraft, of which 38% are 767-300ERs.  Can Airbus make airlines a better offer using a combination of the A330neo and A321neo?  A tough call as the A330-800 has no traction.  Boeing is likely to push its NMA into this segment which leaves one wondering what happens with the 787-8?  There is a limit to how one slices a segment.

Is there a market for the “A350-1100”?  Since that will be competing with the 777-9, which is expected to seat 400-425, it is important to know there are only 346 aircraft in that segment in service.  Of those, 62% are A380s and the balance are 747s.  Boeing has 273 orders for the 777-9.   This is a niche market – but we think it is bound to grow because of airport congestion.

The has a list price of $389m and the A380 is listed at $446m.  The 777-9 seats 77% of the A380’s capacity and is priced at 87% of its list price.  This makes the 777-9 relatively expensive; Boeing is likely to argue they can charge a premium.  The market currently looks small to add an “A350-1000”.   There is probably too much risk for Airbus. Besides, what will they use for an engine?

Airbus might be better placed to focus on the <250 seat segment as this is an 85% larger market.  This where Boeing is focusing next with its NMA.

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