Sales slowing for larger, Airbus, Boeing twin-aisle jets

Discussion

A350/777X

There is no discernible interest in the 365-passenger A350-1000, the 350-passenger 777-8 and the 407-

Airbus A350-1000. Airbus photo.

passenger 777-9 as Air Lease Corp. works the industry to place its own aircraft, President and Chief Operating Officer John Plueger told LNC during an interview at the annual ISTAT Americas conference early this month.

“Nobody’s talking about the A350-1000 or the 777X,” Plueger said.

Indeed, among US carriers, the A350-1000 is too big, fleet planners have told LNC. So is the 777-9. There might be interest some time in the next decade, but not now.

The 777-8, an Ultra Long Haul (ULH) airplane that carries an advertised 350 passengers in multi-class configuration, is an aircraft with capabilities needed for only about 5% of the world’s routes. It’s a heavy airplane for the other 95% of the routes. The competing A350-1000, with a handful more passengers, it’s significantly lighter. According to an analysis of our propriety model, the -1000 is notably more economical than the -8 (despite Boeing claims to the contrary).

Demand for ULH aircraft historically has been limited.

The much larger 777-9 recorded only 20 orders, last June, and none since. Before that, 200 orders were recorded the previous July from Emirates Airlines and Qatar Airways, launch customers which announced their deals at the November 2013 Dubai Air Show. All Nippon Airways recorded an order for 20 the same month.

There are 306 firm orders for the 777X from just six identified customers, plus 10 more from one or more Unidentified customers. Two hundred and 10 of these are from the Big Three Middle Eastern airlines.

Sales of the 777-300ER have slowed. Last year, only 38 orders were recorded, short of the 40-60 Boeing needed to maintain a production rate of 8.3/mo through the entry-into-service of the 777-9 in 2020. Only 22 of these were the -300ER.

So far this year, Boeing recorded 10 -300ER sales.

Low fuel prices

Low fuel prices should favor current airplane designs, and in fact have, for single-aisle aircraft and the Airbus A330ceo. But there has been little increased interest in the 777-300ER. Its nominal passenger capacity, 365, in multi-class configuration is too large for many airlines.

“An airline can fill a 240-seat 787-8 on a new route a lot more easily than a 365-seat 777-300ER. And the 787 is also more fuel efficient than the larger jets,” wrote Dominic Gates of The Seattle Times in a story focusing on the 787 and A350-900 as ideal airplanes for long-thin routes.

Smaller appears to be the favored aircraft. Airbus last year sold 156 A330ceos, the current generation airplane. The low fuel prices, early availability and low capital cost helped sales. This year, Airbus is concentrating on the A330neo, the re-engined version.

Boeing sold 99 787s last year.

Both airplanes are considerably smaller than the -300ER, the -1000 and the 777X.

Boeing may have made a mistake to effectively discontinue the 777-200ER, a 301 passenger airplane. Although this model continues to be included in Boeing’s current price listing, there hasn’t been an order since 2005. Originally offered with engines from all three makers, the engines have effectively been discontinued, according to a former sales rep for one of the three.

If the -200ER were still in production, Boeing could have offered this for a low price to help fill the production gap and undersell the A350-900.

Outlook for 2016

There is one big order for wide-bodies that is supposed to come down this year: the Emirates deal for a reported 70 787-10s or A350-900s. (There have been press reports that that 787-9 may have been added to the mix.)

Tim Clark, the president of Emirates, has been vocal in saying that the 787-10’s engines aren’t powerful enough for the hot conditions combined with the routes he wants to fly. But he’s also been very vociferous in his disappointment that Airbus is dawdling on whether to proceed with an A380neo, and even more so now that Airbus appears to be favoring the potential development of a stretched A350-1000.

Boeing still needs to find customers for the 777 Classic. But with interest waning for the -300ER, and continued weakness in the world cargo market that limits interest in the 777F, Boeing’s work it cut out for it.

Airbus says this should be the year for the A330neo. This remains to be seen.

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