Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Dissecting Boeing CEO’s statement next new airplane will cost $50bn April 15, 2024
- Bjorn’s Corner: New engine development. Part 3. Propulsive efficiency April 12, 2024
- A350-1000 or 777-9? Part 2 April 11, 2024
- Pontifications: Boeing “transparency”–not so much. April 9, 2024
- Airbus charges and write-offs since 1999: more than €33bn April 8, 2024
Airbus announces 68 A320s, A333 “Lite” at Chinese air show
Airbus loves air shows as platforms for announcements, and the current event in China is no exception.
Airbus announced orders for 68 A320ceos and neos and launched the A330-300 Lite program (though no orders yet). Reports suggest Airbus expects the first Lite orders from China, hence the location and announcement at the air show.
Zhejiang Long Airlines signed an MOU for 11 ceos and 9 neos. This is a start-up carrier.
Qingdao Airlines ordered five ceos and 18 neos.
BOC Aviation, the long-established leasing company owned by the Bank of China, placed an order for 12 neos and 13 ceos.
The A333 has a range of 3,000nm and will carry about 400 passengers. The weight is 200 tons and Airbus says it will burn 15% less fuel than the all-up, 6,100nm version. Aviation Week has some additional detail.
Separately, Bloomberg reports that Vietjet (Vietnam) will order up to 100 A320 family airplanes. The order could be announced today, Bloomberg says.
- We’ve not commented on the Lufthansa Airlines order for Airbus A350-900s and Boeing 777-9s to any great extent because the deal was pretty straight-forward. But this Aviation Week article has a comment from the LH CEO saying it by-passed the 787-10 because its range (at 7,000nm) is to short. This is interesting in context of Boeing’s statements that the 787-10 will cover about 90% of the mission requirements of airlines. Just an observation.
As for the 330L:
If i’m correct, the 15% figure is related to the “per-seat” costs, not per plane.
This is based on the additionnal number of passenger, rather than the improved efficiency of the plane by itself.
The only fuel savings for a similar mission could come from:
– A few belly tanks beeing removed, albeit I doublt it would be the case.
– Reduced empty-frame weight by reducing the weight of the galleys, but I can’t see this not beeing of-setted by the increased number of seats.
– Slightly lower sfc on the engines because they would be de-rated, but I can’t really see how it would be lower as it’s only a FADEC software change.
The biggest savings between “regular” and “lite” would actually come from
– Reduced maintenance costs because of the de-rating of the engines, improving their life-cycle.
– Lower landing fees on the airports, as those are calculated based on the MTOW of the certificate. And this is the only real reason I can see for the “Regional” versions of 330 or 350. Saving fees by reducing 50t on a MTOW that would never be used on short range missions anyway is actually smart, but not that much in total (about 500k$ to 600k$ per year). But that’s a saving that is easy to get, and difficult to pass by for a company.
15% are probably per seat. There are no savings coming from airframe or engine changes. Low average weight provides good flight levels.
The A330 beats the B787 primarily due to cost of investment and availability. A short range aircraft cannot be utlized so much as a long range one. The B787-3 was a B787-8 with a clipped wing to fit into the same gates as the B767. It was actually worse in terms of performance than the B787-8.
400 pax on an A-333L seems like it is designed as a cattle car.
In fairness, that is effectively the idea when using an A330 (or any twin-aisle plane) on short haul to begin with.
Look at the capacity difference between the 787-8 and its regional sibling, the 787-3: 250 vs up to 330 seats (both in ANA’s configuration, which wasn’t even particularly aggressive) in an otherwise unchanged fuselage.
It could be “too small for 40% of the missions currently needed”. Its not as if their A333’s can fly FRA-EZE with full pax/payload. Their A333’s do the job very well and IMHO those would work with the B787-10X.
I think the A359XWB was the right choice for LH.
Apropos, congrats to Airbus on the multiple A32X orders!
Scott, It seems that the Lufthansa order was for the 747 and 340 replacements hence the focus on the 350-900 and 777-9x. Do you anticipate that they may go for the 787-10 as a replacement/upgauge for their a330s in the future? That would seem to be the natural fit if they expect more capacity and need more efficiency. On the other hand, the 747-8i does not look like it will garner much in the way of more orders certainly.
Bearing in mind that LH seems to take every type of equipment made to mankind, sure, it could take the 781.
I was just going to say “Hey! They never had any Ilyushins!” when I realised the GDR’s Interflug was initially called Lufthansa as well, and did operate Ilyushins. 😀
781? 78A, instead?
I think they use 773 for 777-300, and then 77W for 777-300ER. So letters are allowed.
Here we go again. Mr Leahy saying that the Boeing strategy is simple to beat. Add more seats to the exsiting A330, derate the engines for longer on wing life, and there you have a 99.4% performer. New technology, not important, because we are the company that builds trust through selling warmed over programs. How can you make your customers feel more dumb by not respecting that their needs are evolving. Noe technology addresses that, and yes there are growing pains but those growing pains are not forever. DOn’t play the industry as fools . Offer vaiants of the A350 family as your options and stop trying to slow down the momentum of your competition. It may have worked in the narrowbody world but the 787 is proving itself each and every day. It will eat up the A330, just as the A330 ate up the 767.
He did not say any of these things in the context of the A330R, although I realise you would have preferred if he had.
It’s really a very simple change, which the A330 lends itself to – it should be very easy to get a good ROI on this, even if they only sell 50 of these regional A330s. Which means it is a no-brainer if there is interest out there – which there is, given that Chinese authorities and airlines have asked for this type of plane.
Lack of competition also plays in the A330’s favour: There simply isn’t another plane in this size category optimised for regional operations on offer from Boeing. The 787-3 was canned (which would have been newer technology but also much more expensive), and I don’t think they are going to offer a regional 767 (self-evident) or 777 (having a 10t higher OEW than the A333).
Airbus just announced an extremely minimum change A330 variant and you’re all over it as if Airbus had just said that this tiny variant is going to kill the 787. Which they haven’t.
Wrong point. Just because you can doesn’t mean you should. Boeing has the wonderful 767-400, early version of the 737-900 that are examples of interesting strategies that failed. But saying that would mean I’m not a fan of either company, which then says my focus is analysis of bad strategies. This is a bad strategy and selling 50 frames is not a simple play. The real reason behind this is that Airbus has been making hay off the A330 line for the past few years. There are 11 booked orders this year and that number will not enable the company to continue to benefit from the highly profitable line. So you pull these ideas out with a hope that one of them sticks long enough to cover the cost of other non-profitable programs. Get my point now, and it had nothing to do with versions of the 787, just that the misfortunes of your competitor are not always the best selling tools for your business. Recognize when you are at the top of your S-curve and kill programs. Airbus has had a very tough time with killing programs. The A300 went on for far too long. Are the A340s really dead?
You’re using a different definition of “bad strategy” that I do if you’re saying that it’s a bad strategy to try and sell a few more of a very profitable product while they have a chance to, and all that at minimum risk and minimum cost for the customer and manufacturer alike.
Incorrect – 22 (12 as of 31-Aug, plus 10 for DL).
Are you suggesting that Airbus should kill the A330 instead of trying to sell a few more while they can (and while they still have a pretty healthy backlog)?
A300: Unless you have proof that Airbus were making them at a loss for the last few years, I don’t think they were produced for too long.
A340: Have been dead for almost two years now. Really. Easy to find out using your favourite search engine.
For balance: I do think the NEO is more compelling that MAX, which goes some way in explaining the 60:40 market share. However, I do think that 40% market share in the biggest single market in aviation is still nothing to be sneered at, and that it would be wrong to simply let that go (provided they still turn a profit on every plane sold, which I’m sure they will).
Can if you like and Mr. Leahy seems to enjoy doing such. Doing that puts you and the entire industry at a disadvantage. Without the mods aircraft lifecycles are long. I worked for a company that had not done any new product development programs for 15 years and when it came time to develop a clean sheet, the people who had led the process before were no where around. We fell on our face and wasted resources and significant dollars. All profits we had from the 15 year run was consumed. That’s my experience with upgrades. Lesson learned, exercise your organization and your suppliers so new products are not as challenging.
Number came from the Airbus website. Says 11 and the numbers you have may be included in the next update but are not shown now.
Compelling A320 strategy. I say it was done by a company that gained advantage by being a first mover. The challenge for Airbus may be that after selling all those aircraft and the performance is no more than 2-4% in real numbers, there may be some significant payouts. In both cases the frames are old and yes adding an engine to a old frame will produce some savings, but the frame is still the same, so there will be tradeoffs. Boeing should have stuck to introducing a new single isle. A reluctant “Me too” strategy is not effective. Bad strategies by your competitor can result in the first mover looking compelling. Another point to think about is that if the price of fuel drops 50% the value of NEO and MAX will be less compelling. WN was concerned about that happening and were not supporters of the MAX. As you look around the world you are now seeing the potential of that happening. Iran wanting to be more friendly, Brazil coming on line with that huge oil find, and the Midwest finds in the US. By the intro dates of both frames the world may be a very different place and compelling might be a interesting word for a host of reasons.
What the 787 is proving each and every day is that the airlines that chose it have MD-11 rates of reliability and they need enough spares hanging around to cover its many cancellations.
And as a program it will probably be in the red for Boeing for the foreseeable feature…
@l7room
Why go off on that sort of tangent? Nobody is saying technology is not important and above all nobody is holding customers for fools. Airbus is reinventing their product and they are able to compete. Right now they have the instruments to do so, above all delivery timeframe, which Boeing cannot match. Continuous improvement of their product also helps but there is only so far they can take it. Eventually 787 will come out on top but the A330 is a very solid performer, hence the popularity, which justifies its 10 a/c per month production rate.
In terms of the ‘Regional’ they are not doing anything incredible: de-rate the engines, certify to lower MTOW, update the maintenance programme for higher number of cycles and the customer can get their bird in around 2 years, with the flexibility to go its MTOW 242T later.
The question of what happens next is of more interest. I think they might do a straight re engine, postpone the A358 by 10-15 years until they can optimise it to be a true A332/3 replacement, taking into account all the experience of the A359 and A3510. If that theory holds, we will hear something next year, as the window of opportunity is closing fast.
Interesting you brought up the A-358. It is still scheduled to be the next member of the A-350 family to enter service. The A-3510 is the 3rd (and probably last) family member. It is still waiting on a new engine design from RR.
Airbus made another scheduling boo-boo with the sequence of the A-320NEO family. The A-320NEO is first, the slow selling A-319NEO is second, and the A-321NEO is the final family member.
Copy/Paste this post to Airbus in an email, they should take this up immediately.
Scott- Was the LH decision driven by buying from both ariframers, so range was used to justify the decision? Or were the concessions given for the A350s so good that it was too hard to pass up the pricing? Not trying to say that is the only way to sell an aircraft, but if the deal had been 100% Boeing it certainly would have been a major blow to Airbus. Local airline goes 100% across the pond.
Ah – how refreshing to read the suggestion that Airbus can only sell planes based on their price again. Haven’t seen that in at least a couple of days.
Did Scott clear that one up for you? I asked because I knew both had done so to try to get the winner take all. Had Airbus been able to offer slots and good pricing, with a total win it might have been worth the concessions. Back off please, I’m not here to support either company, but focus is understanding strategic approach. Have you heard that before?
Not trying to say that is the only way to sell an aircraft,- or did you miss that part?
Our information is that both OEMs were generous on pricing, and that earlier Airbus delivery dates helped clinch the deal for Airbus.
There was an article at FG indicating the split was to match capacity to potential growth rates across a 1-5% spread.
When I first thought about 2 months ago that the 787-10 is out, I couldn t believe it. At that time, rumors were more that it would all go Airbus (900 and 1000), which would have meant that they really sell it too cheap. Based on that I expected 30 350s and 15 777s.
I still believe that the 787, incl the -10 will enter the sub-brand fleets, especially Austrian, maybe also Swiss and then perhaps spill over to LH.
@l7room
You know, there is another side to that coin. Airbus had it in the bag with A359 and A3510 but Boeing offered exceptional 777X pricing. Theories and possibilities are endless. Another point of note is that LH always had a mixed widebody fleet. Nobody had it in the bag and a split deal was always on the cards.
Interesting point and it makes sense. Honestly, I was shocked Boeing took the largest quantity of firm orders. Given that so many have claimed the 747-8 has been such a disappointment. Why would LH even consider going back into the Boeing swamp? Maybe you are right the price was simply too good to pass on the deal.
Well, they went back to Airbus as well even though in hindsight, the 773ER might have been a better choice for LH than the A346 was. *shrug*
As for pricing – given the size of the order and the customer in question, I would fully expect both companies to go pretty low on price to win the deal.
Which is exactly what Scott is suggesting.
As we’re talking tactics, pricing, etc. here, there’s an interesting article out there that describes how these things go, using the example of Iberia shopping for 777 vs A340 a few years ago – worth a read if you don’t know it already:
http://faculty.washington.edu/sundar/MM-BBUS320/Fun-READINGS/Airbus-Boeing%20for%20Iberia%20Deal.pdf
(Note: I did not put that file up – I just found the link in another forum ages ago.)
Are you trying to channel KCB?
Just asking…
Rumour goes that it was not the absolute range that was the tipping point from the -787-10 in favour of the 350-900, but more that on the routes analyzed the 787-10 would have done range wise, but would not have been able to carry alot of cargo.
… which kind of ties in with the payload/range diagram discussed in the original order thread.
The A350-900 has wider seats, which is worth something. Also, the 748 has a wider cabin than the 777-9, is it too late to switch to 30 748s?
In regards to Lufthansa and the 787-10.
They just came out with a condemnation of Boeing (and Airbus) for putting out aircraft that emphasized range over capacity per Emirates etc and Lufthansa did not need range and B and A needed to address that. Boeing does exactly what they asked and Lufthansa then rejects it because it is too short range. I detect a buy European bias and the term clowns comes to mind in regards to Lufthansa management and money where their mouth is.
Do they just auto grouse?
Maybe the A350 does fit their ops, but it looks like a case of appeasing the European bias when the A350 product is not what they said they wanted.
I don’t think clowns is too strong a word.
Smokerr, is the decision to order the 777-9 additional evidence that LH is managed by clowns ?
When you see bias somewhere, shouldn’t you make sure that you are immune ?
As far as I know from reading just about everything on this specific issue there is nothing even remotely approaching a “buy European bias” in LH – nor has there ever been. We are well aware that such pressures to ‘buy American’ are constantly and publicly made in favour of Boeing when US carriers are buying, but such infantile nonsense is rare in this day and age outside the USA.
“New technology, not important, because we are the company that builds trust through selling warmed over programs. How can you make your customers feel more dumb by not respecting that their needs are evolving. Noe technology addresses that, and yes there are growing pains but those growing pains are not forever. DOn’t play the industry as fools” .
I assume that this is being written tongue in cheek, and you’re not a Boeing supporter who is conveniently overlooking the grand-daddy of all warmovers, the 737!
And the 777, and the 767. And if we really want to be honest the 707 because everything outside of the 747 is based on that design. So no tongue and cheek.
I still don’t see why LH can’t add the 787-10X when its time to retire the A333’s. Using data from Airfleets.net, LH’s A330’s are on average only 6.4 years old.
http://www.airfleets.net/ageflotte/Lufthansa.htm
You are right. A330 replacement is in a remote future. When the time comes, real life data are likely to weigh on the decision.
Makes sense.
In LH’s chart of lineups till 2025, A330s are a member.
Airbus seem to have been very successful in selling the CEO alongside the NEO – does anyone know if the CEO slots are sold out now – or if not, how many are left?
I am concerned about B737MAX. Looks like A320NEO series is beating MAX left and right. When will BOEING woke up? How many more customers they will lose? What’s actually their long term strategy? If the current trend continues I will not surprise if Airbus grab 70% market share in single aisle.
I’m not to sure that getting out of the narrow body business might be in the cards. If your profit margins are slim, you have to grant huge concessions on every sale, it might be time to say let the 737 run its course. Or you go after the customers you really want and make an appearance at the low value targets. If you can drive your competition to the point of losing money because it is willing to win share at all cost, why not offer your product at prices you know are unprofitable just to get the other guy to bite? Don’t understand it because getting to a closer split means both companies are in better financial shape. >60% means something is happening and the airlines or someone is winning. Let’s face it performance for both are equal so why the huge share shift? Scott what is driving the significant share shift?
I doubt Airbus’ production line will be able to handle having 70% of the market, so I don’t think it’ll ever get to that point.
The B737 is a dated plane and it shows. The Hamster-Pouch engine inlets, the exposed landing gear and the lack of Fly-by-Wire are all symptoms of a B737 that is looking quite old in comparison to the competition.
Then…there is the performance. I mean, I bet it’s hard to convince anyone that the 737 Max’s performance is going to equal the performance of the a320 NEO when it has those constricted “Hamster Pouch” inlets.
Also, the a320 NEO offers a choice of engines where the B737 Max does not. Choice is always preffered.
Last, I am not so sure that Boeing can make the B737 as efficiently as Airbus can the A320. Year after year, Airbus consistently produces aircraft more with fewer people than does Boeing.
When all these things are considered, then I don’t think that an eventual 70% position by Airbus in this market would be surprising. I think Airbus has got Boeing beat in both price and performance, and the only reason Airbus doesn’t sell more, is that it just can’t produce any more at this time. However, as Airbus expands its production capacity, then I believe this situation will change.
” the exposed landing gear”
Interestingly, if you look closely at the CSeries video in http://leehamnews.wordpress.com/2013/09/26/odds-and-ends-rr-airbus-milestone-c919-first-flight-videos/ when the gear is retracted, the wheels are exposed as with the 737.
Where to start:
1)Having engine choice is good but there are a multitude of other factors which plays a huge role in deciding a particular model
2)Granted the A32XNEO has had a great start, but since the launch of the B787MAX, sales have been pretty even with the A32XNEO having a lead.
3)Sales does not equate to profitability. Look at profit margins, Boeing’s profit margins and ROI has been much better than Airbus/EADS for the past number of years.
6)Lack of “fly-by-wire” has never stopped carriers from purchasing a particular type of plane.
5)Comments such as “Hamster-Pouch engine inlets” degrades your arguments.
Well…maybe I am wrong. Maybe the 737’s “Hamster-Pouch” Inlets, exposed landing gear and lack of Fly-By-Wire are not the signs of a dated design, but perhaps they are actually performance “Features”. Of course, I can’t explain why Boeing and Airbus didn’t include similar “Features” on their newest designs – or any of their other designs in the past 25 years. Perhaps they are saving all this “coolness” for the 737?
Just because a design is old does not mean it is not reliable and efficient. The B-737NG/MAX is still getting orders, just as the A-320CEO/NEO is.
@Jacobin
1)Having engine choice is good but there are a multitude of other factors which plays a huge role in deciding a particular model
Depends on the Programme, Airbus was taken to the cleaners for having no choice of engine for the A350 by some industry observers 🙂
2)Granted the A32XNEO has had a great start, but since the launch of the B787MAX, sales have been pretty even with the A32XNEO having a lead.
Actually since the launch dates of both projects, Airbus has been tracking 55% v 45% for the MAX.
3)Sales does not equate to profitability. Look at profit margins, Boeing’s profit margins and ROI has been much better than Airbus/EADS for the past number of years.
You know well that the accounting rules for both companies are different, hence the numbers is not an apples-to-apples comparison. What we do know is that A320/B737 programmes are the no1 profit drives for their respective manufacturers.
5)Comments such as “Hamster-Pouch engine inlets” degrades your arguments.
However those that use ‘Airbust’ or ‘Whalejet’ seem to think they use perfectly reasonable arguments 🙂
The A320neo has more sales because it will enter the market two years earlier. So that gives Airbus 42 (production rate per month) * 12 (months) * 2 (years) = 1008 extra delivery slots. That’s the difference we see in the order book (1,500 vs 2,400).
LH will operate B777X, A350XWB, B747-8 and A330/340-600. A very strange mix, and many aircraft are overlapping with each other. Four very different types of engines: GE9X, Trent XWB, GEnX Bleed, Trent 700 (A330) and Trent 500 (A346). Adding another type? No for two reasons:
LH has no authority to maintain GENx engines. The engine maintenance was a big issue in Air France order. LH pax airline is not the owner of LH Technik. But both are part of the LH group. The business case of the LH Technik is increasingly challenged as new engines cannot be maintained by them any more.
Second, I am not sure that performance-wise the B787-10 is any better than the A350.
For the 787-10 v A350-900, it all comes down to weight I think. The 787-10 is lighter than the A350, therefore, I believe it has been confirmed by SUH, that the 787-10 has the edge on shorter, “regional” routes, but the A350-900 will have the edge has the routes get longer.
I still see it as some kind of twisted logic (nuts?) that Lufthansa makes a major complaint that the range is too long and then buys super long range Aircraft.
I thought they had a valid point. Why should a few players dictate an industry when those few can do fuel stops. If the ones that need to do make them, the rest of the world bets more efficient aircraft.
If you look at Lufthansa there is not a more messed, convoluted and tangled divisions and aircraft types in the world. The C919 must fit in there nicely someplace.
The message is right but the messenger is a mess.
The only major airline that does not operate a 777 passenger type , maybe says it all
LH offers through its technical division service for all type of aircraft. The savings of commonality are therefore accessible despite small fleet size.
You would have to replace “Lufthansa” with “Deutsche Bahn” to give your insights any substance. If you require national affinity, that is . Elsewhere it looks like simplistic fleet management models and civil war like worker relations are the way to Chapter 11 or corporate death.
“”If you look at Lufthansa there is not a more messed, convoluted and tangled divisions and aircraft types in the world. The C919 must fit in there nicely someplace.””
It is also the one (together with BA and AF) that has the greatest variety of routes, in terms of load, range and cargo need. And is probably the most admired in the world in service, safety and management. Perhaps their model of multiple and route-matched types is preferable to the one devised by accountants and external consultants for other airlines.
11 are on the Airbus website. NEO more compelling? They are both the same aircraft as they were 10 years ago. Put new engines on both added some new software and one ends being more compelling? NEO got out there first and Boeing said, after American forced their hand, oh yeah me too. Airbus sold the concept to the industry that putting new engines on an old body will make something new and exciting happen. Compelling? Answer to the continue selling until you can’t sell any more is you tend to lose focus in you engineering and development teams if you fail to develop new products. Your suppliers get stale because not all supplier groups are involved in limited mods like this . The 787 and the A380 programs failed to meet initial marks because the supply base was weak in development. The A350 has benefited from the flexing done by the prior programs. At this point get the programs going and let the older ones go so the entire base goes through effective development cycles. Again, just because you can does not make it right.
You overlook that the CG of possible improvements is solidly in engine territory.
Expressly valid for the Dreamliner too. All the wonderfull innovative details either cause unending downtimes or were matured for the A380 😉
What?
“Airbus sold the concept to the industry that putting new engines on an old body will make something new and exciting happen. Compelling? Answer to the continue selling until you can’t sell any more is you tend to lose focus in you engineering and development teams if you fail to develop new products”
The 737NG was Boeing’s answer to the A320 once that began to gain a foothold in the market. What characterised it? New engines! They sold it until the end was in sight and certainly lost focus because they couldn’t decide whether to switch to a new design or re-engine again – and they chickened out
New engines is a card that can be played once in the life of an airframe but twice is perhaps once too far. I don’t see Airbus losing their ability to start new projects, they haven’t long finished the A380 or the A400 and they’re still working on two versions of the A350 and re-engining the A320 family- and I for one don’t believe they’ll sit on their hands once all those are done.
7,000nm is only the design range. A more realistic range is 5,000nm, which can’t cover 40% of Lufthansa’s A343 routes.
Check this payload-range chart: http://i298.photobucket.com/albums/mm262/ferpe_bucket/343787-10and350-900realPilotsPRchart_zpsb98cf23e.jpg
Is there any reason why Airbus would offer a regional A330-200 to fill the gap between the A321 and the 330-300 – that is a big jump in size for a regional route.
Airbus once planned to offer a regional 195 tonnes MTOW A330-100 (-/500) that was to be 8 fuselage frames, or 4.28m shorter than the A330-200.
http://www.flightglobal.com/pdfarchive/view/2000/2000-1%20-%200061.html?search=A330-500
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