Airbus officials say they are still evaluating whether to proceed with the A330neo, and that an announcement at the Farnborough Air Show next month is not a given.
John Leahy, COO-Customers, ticked off the considerations during the Airbus Innovation Days this week in Toulouse. These are corporate and strategic issues. A more tactical issue is what impact re-engining will have on maintenance costs, says Kiran Rao, EVP of Strategy and Marketing.
In his presentation, Rao said that the A330ceo has lower maintenance costs than the Boeing 787 (something Boeing would likely dispute), with engine maintenance costs being a notable factor.
In a sidebar press scrum after his presentation, we asked Rao about this. If the neo is equipped with either (or both) the Rolls-Royce Trent 1000 TEN or GE Aviation GEnx, or derivatives, what would the impact be on the claim of maintenance cost advantage?
Rao acknowledged this is a consideration. Using the 787’s engines, or derivatives, will narrow the maintenance cost, he said. “We’ll shoot ourselves in the foot [a bit],” he said. But the 787’s nacelles are proprietary to Boeing and the materials add dramatically to the maintenance costs. (According to our Market Intelligence, as much as $750,000 per engine is the cost of overhauling the nacelles, but this is unconfirmed.) Airbus will have to design its own nacelles for the A330neo, and according to our MI in the supply chain, it is seeking information about this.
Rao said it will be necessary to match the operating costs and fuel efficiency of the 787-8 with the neo. The lower capital costs will then give the neo a major advantage over the 788, he says.
The A330 wing is already very efficient (a conclusion reached independently by our Leeham Co EU analyst, who has an aeronautical engineering background).
“There’s not much more we can do with the wing or the winglets,” Rao said.”It doesn’t need a new wing.”
The A330 is fare more efficient than the 787 or the A350 on routes of 2-3 hours, he said, giving it a future in Asia and particularly China.
What’s the market potential for the A330neo?
At the IATA AGM, Leahy and Steven Udvar-Hazy, CEO of Air Lease Corp., said it’s 1,100-1,200. At dinner Wednesday night, Airbus CEO Fabrice Bregier was far more conservative, noting that Airbus Group CEO Tom Enders had previously said the potential was in the “hundreds.” We asked Bregier to be more specific. He replied, “between 200 and 900,” and suggested cutting this figure in half. This suggests around 400, a figure we heard that the engine OEMs projected the market.
Bregier then went on to say this wasn’t enough to launch a program.
With falling sales of the A330ceo and a production rate of 10/mo, we asked Bregier how long this rate could be sustained. He replied, “a few years,” and amplified that he thought the rate could be maintained through 2016.