Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
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Emirates cancels A350 order, could be boost for slow-selling 777 Classic
Airbus announced Wednesday morning French time that Emirates Airlines canceled its firm order for 70 A350 XWBs.
In a statement, Airbus said:
Airbus confirms that Emirates Airline has decided to cancel its order of 70 A350 XWB aircraft. The decision follows on-going discussions with the airline in light of their fleet requirement review, as demonstrated by their order of 50 additional A380 at the last Dubai Airshow and their continuous interest in the program
Airbus and Emirates Airline benefit from a long-standing relationship and the airline recently reiterated its confidence in Airbus products particularly by praising the A380 and the benefits the aircraft brings to their operations.
The order of 50 A350-900 and 20 A350-1000 was originally placed by Emirates Airline in 2007 with first delivery slots scheduled from 2019.
This cancellation could open a hole in Emirates’ fleet plan. The so-called middle market for wide body twins is the heart of the market. This cancellation could open an opportunity for Boeing to step in with the slow-selling 777-300ER, which has a major production gap beginning in 2017. Rather than introduce a new fleet type, Emirates could opt to stay with the 777-300ER for commonality, or perhaps its huge order for 150 Boeing 777-8/9s may supply fleet needs.
Airbus has more than 800 orders, options and LOIs for the A350 even after cancellation.
More than 800 orders? I count 742 firm orders after Emirates’ cancellation. There is now a chance for the A350 net order to be negative this year.
Sorry, that’s orders, options and LOIs. Corrected.
This could also mean that Emirates is deviating from its “current” operating model. Emirates has 135 B777 in operation, average age 6.1 years. See here:
http://www.airfleets.net/flottecie/Emirates.htm
Assuming
– that additional frequency doesn’t work out due to congestion, and
– that there isn’t much sense in disposing a 12-year old B777-300ER for a factory new,
Emirates might simply fly its current B777s until they head for the scrap heap after 20ish years. They will need some attrition replacements as the -200 become old (Emirates operates LN0020, a non-ER B777-200) and the A340s and A330s leave the fleet.
If growth is slowing down, then there is simply no need for 70 additional aircraft.
Sounds sensible to me. I thought though that the 350 was bought in competition with the 787 though. So, coupled with the timing (in advance of Farnborough so they can announce an alternate order there, with the cancellation far enough in advance) I wonder if this means the -1000 orders will be switched to existing or new 777s and the -900 orders (ie bulk of the orders) to 787s.
For me it smells like a heap of cheap 300ER.
On the other side the NEO. We will see.
If they were planning on switching to 330neo I would have thought this would have been done at the same time as cancelling the 350, as no embarrassment for Airbus. The timing to me feels like a ‘get it out of the way’ before Farnborough, to switch to Boeing product (if in fact they do order anything).
This is a Giant cancellation! Stay tuned there must be much more behind this announcement.. I gues EK got a lot of early A350 slots so the delivery schedule will also go through the shredder!
This certainly is an unanticipated developement. No rumors ahead, nothing.
.. or was this quietly integral to the A380 “fill up” ?
..or did Boeing manage to preempt another Airbus sale ala “we take your A340 and give you 777”
What sort of penalty is ussualy associated with this kind of cancelations?
As Emirates ordered another A380 and Airbus is critically dependent on Emirates for the A380 program, I strongly doubt that any cancellation penalty is associated with this. Actually, for Airbus the slots of the A350 will be easy to sell.
Meanwhile Boeing is trying to get the authorities to give them a free pass on “two critical flight systems deemed non-compliant with airworthiness regulations” to get the 787-9 delivered in time. This is very disturbing news of putting business before safety.
http://www.flightglobal.com/news/articles/boeing-seeks-faa-waivers-to-deliver-first-787-9-in-june-400273/
Doesn’t sound too bad. I guess there a number of more disturbing issues that are simply unregulated or undiscovered.
Ugh. No doubt it’ll be waived through, maybe with restricted ETOPS or sumfink (i.e. a condition that has no meaning). No doubt I’ll not get on a 787-9 until this has been resolved either.
Sure a lot of people can see a 300ER order coming, followed by the much anticipated A380’NEO’ (for want of a better name) launch order.
The A350 may simply be too small for Emirates?
Perhaps there is an unpublicized issue with the A-350 found in flight testing that EK doesn’t like?
No flight issue.
I personally think that Emirates finally realized they were ordering way too many airplanes. Or perhaps they felt the need to utilize the boatload of A380s (with more to come) and 777s (with more to come) to their fullest potential and adding what could be too much capacity would not be smart.
Perhaps there is publicized issue with the 787-9.
We will see how the airlines will like folding wing tips…
Perhaps we should wait until Farnborough with such speculations.
There are rumors that it may be too heavy
We will not know the full story until Tim Clark speaks, but we can make some guesses: Clark has never been happy with how A announced the latest version of the -1000. He complained publicly that they had not consulted him, which may have meant that he remained materially dissatisfied with the -1000. Also if I recall correctly, Scot has said that the 777-8X is “Tim Clark’s plane,” and Clark has said that the -8X will play a role equal to the -9X. But he is also cancelling the 359s. Clark is in discussions finalizing the performance of the 777X, and maybe he and B have gotten the -8 exactly where he wants it, so that it will replace his 772ER/LRs/345s. This line of reasoning may make sense in that Clark may not be looking to replace -300ERs with the -8X. He will not have to replace the ones he has and has ordered for years, and likely will replace them with -9Xs or a combo of 8s and 9s.. If I am right, then the -1000 cancellation should not impact that variant’s sales as a -300ER replacemen.
Power of the RR XWB engine for the -1000 was never comfortable for the EK. Boeing had to get GE to boost the thrust for the 777X. A350-900 is doing fine just not what EK wants in that size and performance range. For Airbus the challenge will be how you deal with this while trying to push the NEO.
Boeing tends to build runway hogs. So this probably is not directly applicable to Airbus frames.
“Boeing tends to build runway hogs.”
Citation please.
Just go over the ACAPS runway length required at MTOW data.
Neutron73, we can begin with almost any version of the 737, the 767-300…
Reading the other threads on this subject I enjoy seeing that this order will be transferred to A330NEO orders, and that may be what happens. Here’s another twist. What if there are some -300ER buys but the real buy is for 50 787-10s that come in to the EK fleet in 2019? Small order but the order establishes the -10 as EK’s regional frame. Anyone with a NEO competing against a -10 loses in the seat count war, and if CASM is a real metric then the NEO value prop goes to the wind. The-10 will work because it is common to the 777. 200 announcements for NEOs at the airshow against a small play of -10s. The A350 might be too small overall for EK and they might be forcing other airlines to come to the same conclusion? Again, I got my popcorn and this has just gotten real good. Scott your thoughts?
EK 787-10? Back to the future ’05..
http://www.flightglobal.com/news/articles/emirates-pushes-boeing-on-787-10x-202221/
“Emirates could opt to stay with the 777-300ER for commonality, or perhaps its huge order for 150 Boeing 777-8/9s may supply fleet needs.”
Both the A350 and the 777X had a similar delivery timeframe. It could be that it was going to be one or the other. At the time they placed the A350 order, there was nothing better to replace the existing 777 fleet.
However, as the 777X order becomes defined and closes to a completion, they may have felt that the time is right to be relieve themselves of the A350 order.
Speculation. But we’ll see if a 77W order does indeed materialise.
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Interesting how this came out almost immediately after Boeing went to Dubai to peddle the 747-8i to them. I´m not gonna imply, I just think that it´s interesting. After the news of the cancellation, I did a little research into the A350 vs the 777. Based off of the cross section between the two, there is more logic in staying with the 777. There is a 30 cm difference in cross section. That means one less aisle of seats in the A350 compared to the 777. When you subtract that row, that´s probably a little over 50 extra seats unavailable. With EK´s projected growth to continue the way it is, I seriously doubt that they would be willing to purchase an aircraft that would potentially stunt that growth. What they have is actually just fine. They could probably use more A380´s. The 777 is just the better aircraft for the needs of the airline. It´s not like it´s really that big of an issue. This just opens up slots to other airlines for earlier delivery.
The A350’s are better served flying for smaller airlines that are focused on quality and comfort as opposed to Emirates which suffers from megalomania. Great window of opportunity for competitors to capitalize on this strategy.
All they have to do is show the picture of a passenger in the coach cabin of an A350 and another in the coach cabin of the 777-x and ask; Where would you rather be?
“…quality and comfort as opposed to Emirates which suffers from megalomania.”
When you combine both, you get the A380, which they have a ton of…
Emirates needs the B777-X, not many other airlines seem much interested, so Clark is going to have to buy a lot of them to ensure it gets built. QED A350s will be surplus to his needs.
Agreed.