Published 05 Mar 2018 by Airfinance Journal
Special to Leeham News.
March 8, 2018, (c) Airfinance Journal: A leading appraisal firm questions whether Airbus should respond to Boeing’s proposed new midsize aircraft (NMA) simply by enhancing its existing product line.
“There is a gap, a natural gap that needs to be filled, so I am not sure whether the A330 coming down…and the A321 coming up, fills the gap,” said John Vitale, president and chief executive officer of Avitas, speaking on a panel of appraisers at Airfinance Journal’s Korean Airfinance event, adding: “Airbus claims the A321 has all this range and that they can put in as many seats as they are talking about. Well, no you can’t in an equal comfort level.”
However, Vitale acknowledges a possible further stretch by Airbus of its A321neo, the A322, or enhanced versions, such as the ‘A321neo-plus’, or even an ‘A321neo-plus-plus’“pushes out the timing of the NMA aircraft.”
Vitale recalls a similar move by Airbus when Boeing came to market with talks of an all-new narrowbody aircraft. “Airbus moved the needle with the Neo,” he says, adding: “I think we all can agree it was a successful strategy for Airbus.
However, he admits any move to enhance Airbus’ existing programmes does not eliminate the “gap that needs to be fulfilled somehow.”
“But perhaps Airbus is waiting for a second-mover advantage to see what Boeing comes out with, so they can design something that is just a bit better with the second one.”
Boeing’s forthcoming mid-sized aircraft, informally dubbed the Boeing 797, is expected to come to market in 2026. The aircraft would have two variants: one with 225 seats, with 5,000 nautical miles of range; the other could seat 275 and fly up to 4,500 nautical miles. Boeing is targeting a 30% unit-cost improvement over its 757 and 767 models.
Speaking on a fourth-quarter earnings call, Air Lease chairman Steven Udvar-Hazy noted that while Airbus had a little scope to alter the A321neo, it was the lessor’s belief that “with the current management changes and issues Airbus is facing” the stretch probably was not “their number one priority right now.”
Separately, Vitale and David Tokoph, chief operating officer, Morten Beyer & Agnew, indicated at the event that they did not believe the A330-800 would be part of Airbus’ product line in five years’ time. The two appraisers were asked for their views on the future of the widebody following Hawaiian Airlines’ move to swap its order for the Boeing 787-9s.
“Boeing’s effort to displace the Airbus A330neo at Hawaiian is part of an all-out, hand-to-hand combat campaign by Boeing to kill the A330neo programme in advance of the potential launch of the Boeing 797,” reported Leeham News on 22 February.
The campaign has been underway for months and the outcome was expected, it adds. “Airbus offered to cut the price on the -800 and also offered the A350-900. The latter always was considered too big by carrier executives.”