The A321XLR is special. We started assessing this model to offer the same level of disruption as the 787 on a smaller scale. It is the first A321 with a range rivaling the venerable 757-200, making it attractive to many airlines. A single-aisle with over 4,000 miles of range becomes a neat tool in network planning. But its strength increasingly looks like it also highlights its weak spot. Iberia, the XLR launch customer, started trans-Atlantic service from Madrid to Boston. It plans to add more XLR service to Brazil. Aer Lingus plans to serve several secondary markets in the United States from Dublin. This type of route exploitation plays right into the XLR's long range. This means new markets are opened at relatively low risk for the airline. If these markets mushroom, as is hoped, these two airlines can upsize to the A330. The process is well established in the industry. The key is always to have the perfect market opening tool. The 757-200 proved this approach for several US airlines flying from the US East Coast to secondary markets in Europe. Service Expectations Cabin service becomes increasingly important with each passing in-flight hour. In the US, transcon flights of around five hours routinely offer no meaningful service other than snacks and drinks. Americans have grown used to this as domestic in-flight service levels plummeted. However, when one considers international flights, the expectations are different. Americans are used to no in-flight meals on five-hour flights, even to locations as far south as Panama. When the flight is closer to ten hours, passengers expect to be fed an authentic meal. And here we hit the XLR's Achilles heel. This aircraft does not have the facilities to ensure economy passengers can get the service they likely expect. [caption id="attachment_90739" align="aligncenter" width="640"] Airbus Space Flex v2 lavatory view[/caption] Airbus was aware of this issue during flight tests. The XLR comes with the Airbus Cabin Flex, which might be what economy class cabin attendants use most. Take a look at this story. Iberia selected Airbus’ space-saving solution, dubbed Space-Flex, which halves the size of the galley. As the linked article notes: "The space at the back of the aircraft is shared with two lavatories, meaning that flight attendants will need to set up the food and beverage service in the same space where passengers are queuing to use the lavatories." This is what the layout looks like on Iberia. [caption id="attachment_90740" align="aligncenter" width="500"] Aerolopa.com[/caption] Here's the Aer Lingus layout. [caption id="attachment_90741" align="aligncenter" width="500"] Aerolopa.com[/caption] One flight back there is probably all it takes for economy passengers to look for another option. While the airlines selected this layout, Airbus offered a distinctly risky option for in-flight meal services. Both own the decision and how people react to their travel experience. The XLR Niche Consider that the XLR can do special missions and mimics the disruptive ability of the 787-8 in several ways. This may be why so many airlines have selected this model. Airbus has over 500 XLR orders. Boeing delivered a total of 1.069 757s. Will the XLR exceed this number? Or will it end up like the 757, is a niche? The XLR promises to deliver long-range flights for around 200 passengers at state-of-the-art fuel burn. This is irresistible to airlines that have international services. Being able to "hub-bust" your foreign competitors is among the most desirable outcomes. Having accomplished this, what's next? We have examples to guide us. British Airways used the 787-8 to open Austin, Texas, from Heathrow. In short order, the flight proved popular enough for the airline to upsize to the 777-200. Similarly, British Airways started service to Baltimore using the 787-8. That flight is frequently upsized to the 787-9 and even 777-200. Conclusion Market makers are potent tools. The A321XLR is like the 787-8 in that respect. Boeing delivered far more 787-9s than -8s. We believe Airbus will likely deliver far more A321LRs than XLRs. Airlines do not require big fleets of market makers. Like a master key, you only need a few to make things efficient. Every aircraft comes with tradeoffs. The XLR offers useful capability, and the cabin flex feature looks clever. Here is an example of an XLR cabin conversation on LinkedIn. This article has over 181,000 views among industry professionals. The extensive comments underscore how this galley/cabin issue has become better understood. It is essential to watch how XLR operators manage the galley/cabin challenge, even if the XLR is a niche model. Three BWB programs are in development on the US West Coast, focusing on the same segment as the A321. The 757 had the market to itself for a long time. The XLR's competition is going to be a step change. And the approach is already apparent.
