Leeham News and Analysis
There's more to real news than a news release.
There's more to real news than a news release.
Leeham News and Analysis
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- Bjorn’s Corner: New engine development. Part 4. Propulsive efficiency April 19, 2024
- Boeing unlikely to meet FAA’s 90-day deadline for new safety program April 18, 2024
Podcast: 10 Minutes About the Airbus A330neo
Feb. 3, 2021, © Leeham News: The Airbus A330neo is technically a good airplane. But sales never took off. There are only 331 orders for the
airplane and easily more than 100 are iffy. Airbus publicly said there was potential for 1,000 orders when it launched the program. Why hasn’t the neo taken off any better? This week’s 10 Minutes About the A330neo explains why.
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Chiming with the idea that the A330neo was an opportunistic plane to put price pressure on Boeing, is it not true to say that — in view of the amortized A330 production line and the low A330neo development cost — Airbus can offer very attractive prices on the A330neo and still make a margin?
In the post-CoViD world of airlines with severely weakened balance sheets, airlines that are in a position to buy from an OEM rather than from the secondhard market may find that the A330neo is the cheapest new widebody available to them. Of course, Boeing could counter by trying to sell 787s at (even more of) a loss, but that type of behavior is unsustainable — particularly in view of Boeing’s already appalling balance sheet.
@Bryce: “Chiming with the idea that the A330neo was an opportunistic plane to put price pressure on Boeing, is it not true to say that —”
Tell that to John Leahy, who told me.
Hamilton
@ Scott
Not sure I understand your comment: I was agreeing with you — I said “is it”…not “it is”.
I can very much believe that the plane was introduced (predominantly) for this purpose. Boeing certainly took the bait in the case of the Hawaiian deal 😉
Between 4000 and 5500nm the A330-900 is the best widebody.
A podcast with John L, that sounds like a splendid idea! Randy T probably also has something to tell 😉
On this side of the Pond it would be like bringing back Howard Cosell, please, no, anyone but that.
Bryce:
You mistake 787 issues with a current loss and that is not true for what they are selling it at and for.
The loss has come down 15 billion or so, they are making money on each copy.
Airbus has its undies in a twist as they decided that Boeing was not playing fair and not making as much money on each copy as Airbus decided they should.
As Airbus decided how much money Boeing has to make, they then priced the A330NEO under that.
Wallah! Boeing op toed to make less money and undercut the A330NEO.
That is what happens when you try to decide fro someone else what they can or can’t do.
Boeing can decide to make zero return on a 787, kill the A330NEO and then move back to making money (and Airbus can do the same).
But no one TELLs the other guy what they can sell for, its stupid to think you can.
US is not known for the EU touchy feely we are going to agree and not say it sort of thing.
“”Boeing can decide to make zero return on a 787, kill the A330NEO and then move back to making money (and Airbus can do the same)””
Boeing would lose much more money.
And now, Boeing will pay to keep Dreamliners in the air (negative return), because they started QC.
Airbus needs to do nothing, Boeing’s enemy is Boeing.
BA makes good money on 787 when they are making 10, 14 a month. How about at a rate of five?? (CFO said they were just above break-even before the latest cut!)
How long can suppliers sustain without a price raise or compensation???
Interesting discussion. Agree that the A330NEO was an opportunistic development. I also think Airbus was expecting to take advantage of production issues with the 787 and the lack of early delivery slots of that plane. Also that the 787 cost more to make than the 787. Airbus would be able to offer a cheaper aircraft sooner. In the event Boeing brought down the production costs and the backlog quicker than expected
As you speed, airlines happy with the A330CEO may top up orders for a more up-to-date version, so can be kept within the Airbus fold for a while longer.
For these reasons I see the A330NEO as similar to the 737-10. It’s not as good as the competing plane, but makes sense as a tactical play for not too much money. But they will need another solution in the medium term.
I think we know where the players stand and now we have to stand back and see how it plays out.
Hazy went nuts and said 1000 A330NEO. That sure is not happening.
I have nothing against the A330. NEO have not historically been a success (the A320 has been but it is one data bit in a whole bunch of data that says it does not work)
You don”t go by one data bit.
It may be down the road the 787 and A350 are good candidates for an NEO. But that is 15 years away.
And you have to figure that the EU is buggy on Hydrogen and the US (Boeing) is not and that plays into it all.
I think the EU got into the rule by committee and nodding their head yes much like they did on Covd vaccines.
hello, 777-300ER, 747-400, A32x, 737 classic, 737NG, MD80/90
all NEOs all exceptionally successful.
Just call neo the “next generation” then it would be fine to TW.
Dont forget the neo’s for the Caravelle , 707 and DC-8 when they switched from turbo jet to fan, the DC8 got a second round with CFM56
The A330 neo also made sense for Airbus because they now have the 5, 6, 8, 9 seats across market covered. The 5 seater came later and 10 seater has gone
> NEO have not historically been a success
Well the 737 neos were till the Max (and it may yet be). As were the 747s till the last. In all I think you will find more successful derivatives than originals.
The A330 backlog sure looks weak at this stage. I think Airbus is ok with producing ~4-5 a month this decade. They need to maintain a backlog of 3-4 years, including MRTT’s and freighters.
Looking back, A330 deliveries peaked 2005-2015, so intensivation of the A330CEO replacement cycles will start later this decade. https://en.wikipedia.org/wiki/Airbus_A330#Orders_and_deliveries
Agree with Vincent, Airbus probably won’t consider discontinuing the A330 line, before the middle of that replacement cycle. Meanwhile they’ll probably launch NEO variants of the freighter and MRTT and maybe introduce an extra engine option.
https://www.bloomberg.com/news/articles/2020-02-19/ge-tries-to-break-rolls-royce-grip-on-engines-for-airbus-jet
Maybe they will go after a KC-Y bid, for a locally build MRTT tanker, with GE and LM.
https://www.defensenews.com/air/2018/12/05/lockheed-airbus-venture-ups-the-pressure-on-boeing-to-deliver-its-us-air-force-tankers/
Pronounced toast several times, the A330 refuses to go away. Also because its competitor ain’t trouble free.
https://simpleflying.com/wp-content/uploads/2018/12/A339-7879-dimens-keesje_zps1afcfjgm-700×483.jpg
“I think Airbus is ok with producing ~4-5 a month this decade.”
I like the airplane, but I think that is wishful thinking at best. The podcast is talking about 2 a month, potentially reduced to 1 a month.
I think the sentient question of the podcast is if the neo can survive the order drought brought on by covid. The market has shown it to be an “excess demand” aircraft, one that’s ordered if an airline can’t get a 787 or a350 on their time schedule. They likely can for the foreseeable future and the promises of lower costs haven’t been borne out so the question is when there stop being enough orders to keep it running. It is also ordered by airlines seeking cheap lift, and the cheaper option will be many of the used aircraft that will be victims of the pandemic. Add to that no airlines are in expansion mode now and there is a timeline the neo would have to wait out with an already shaky order book. It was an opportunistic aircraft built on some assumptions that haven’t held true.
There is a system.
1. A320neo and A321neo can reach 3500nm.
2. The A321LR can reach 4000nm.
3. Between 4000 and 5500nm the A330-900 is very good. The 787-9 can’t beat it in fuel burn.
4. From 6000nm on the A350-900 is the better choice because it can carry more payload.
The A330-900 can more than compensate its weight with the big wings, much better than the 777-9.
465sqm wings / 247t MTOW = 1.883 A330neo
516.7sqm / 351.5t = 1.47 B777-9
Many A330ceo are still young, there can’t be many orders now.
According to Airbus the A330-900 has 310 seats in a 2-class configuration.
According to Boeing from 2018 the 777-9 has 414 seats in 2-class. Boeing’s 426 seat number is from 2015.
The OEW of the A330-900 is 135.3t. To match the OEW per seat the 777-9 needs to have 180.7t OEW. Seeking Alpha expects the 777-9 OEW to be 184.6t.
The costs for the A330neo are $2b and $13b for the 777X. The difference is $11b. The difference is needed for comparisons. $11b more for 191 B777X frames, $57.6m per frame.
Even with Boeing’s old 426 seat number from 2015, the 777-9 has 116 more seats for $57.6m more, and this is only the development cost.
These $57.6m for 116 seats equals a purchase price of $153.9m for the 310 seat A339 and $211.5m for the 426 seat 777-9.
And this $211.5m is only for a 3/4 B777-9, the costs to produce the other 1/4 frame is not included.
With $153.9m Airbus could earn much more on the A330-900 than Boeing with the 777-9.
Where’s that 13B come from? Not that I couldn’t believe it, just that I’ve never seen any solid references to 777x cost.
$6.5b development costs plus $6.5b accounting for less production units.
Some customers of the A330ceo might wait to see if the RR T7000 gets into troubles as it is based on the T1000, so waiting in the shadows and keep operating the A330. The 787-10 reengine is also a factor to reduce seat mile cost to way best in its class. The slight reduction in Power of the T7000 vs the T1000 and the new hardware Rolling in will by time assure customers it will be an effective and reliable addition to its fleet. The A330 has been declared dead many times…
As RR has shelved the Ultra Fan plans I think they are focusing on fixing their problems.
In this case they have time to get ahead of it if they can figure out what the fix is.
It may not be the same as the TEN (and the 1000 while being fixed is a dead duck as no more will be produced)
Other question is the so called XWB that is a 1000 derivative.
No money
At 2B development costs, it seems like the break even production number might be only 200 units. Hopefully Delta chose it for it’s wider seats. It is a counterweight to the degradation of seat width, so I hope for it’s continued success.
When things get back to “normal,” Delta will make money using this plane. As far as the overall outlook for existing and new models, it’s good long term. This is really a strange period in aerospace at the moment. Boeing needs to re-invent itself, and Airbus cannot rest on its laurels. If governments need to help them, so be it. It will take some people with Vision to deal with the environmental and engineering challenges going forward.
Between 4000-5500 the 787-9 will lift more, fly faster, burn less fuel and is less expensive to maintain. The only advantage for A330 was earlier delivery and that is no longer the case.
“”lift more””
The A330neo has enough payload for pax and some cargo.
If more payload is needed the A359 has much more than 789.
“”fly faster””
It depends on the speed pilots choose. Since fuel burn and range depends on speed many airlines might not fly faster.
“”burn less fuel””
Engines are the same generation, Neo engines are even newer.
A330 trims with weight, without stab angle and drag.
A330neo has much more wing surface, contributing to efficiency.
“”earlier delivery and that is no longer the case””
Boeing can’t deliver now.
“The operating costs for the A330-900 and the 787-9 are close.
The difference can be compensated with lower capital costs. Monthly lease rates for the A330-900 are below the 787-9 lease rates.”
More details behind the paywall
https://leehamnews.com/2018/06/07/how-competitive-is-a330neo-part-3/
Which range and which MTOW for the A330-900 was chosen for the comparison?
“”A330neo part 1:
They are also aerodynamically closely matched.””
This is about the A330-900 and 787-9.
465sqm wings / 247t MTOW = 1.883 A330-900
377sqm / 254t = 1.484 B787-9
27% more wing surface per t can’t be close.
A330 trim without drag is also much better.
We kept hearing the A380 was too soon and wait a few years, until they canned production.
Such is the way of business. Everything is “great” until it isn’t. Saying “we’re in trouble” is a way to make sure no one orders your product with a 10-20 year commitment. The question will be if it becomes another MD90 where engines and systems are different enough that it becomes very un economical to have a small fleet, or if it retains enough ceo and T1000 commonality that engine shops don’t charge a fortune every overhaul due to differences.
Isn’t the A330NEO actually the replacement for the A340-200 and A340-300 in Airbus offering. With many airlines phasing out the (smaller) A340’s, I actually think some airlines will take several A330NEO’s to replace the phased out material. This will happen when the Covid-19 pandemic is behind us and air-travel demand has recovered. Possibly with lower demand, smaller sized aircraft actually work better economically.
The A330/A340 program started delivering in 1993. So the oldest planes are 27 years old.
From the 246 delivered A340-200/-300 there are 118 left in operation according to Airbus O&D. This might go to 0.
– From 645 delivered A330-200; 600 are operational,
– From 771 delivered A330-300; 742 are operational.
– All 38 A330-200F are operational.
– EFW is converting A330CEO’s into freighters. (AFAIK 9 completed)
Realistic A330CEO backlog is 8 frames for MRTT (rest already in conversion) and 2 for Beluga XL conversion.
I actually didn’t get why Airbus launched the A321XLR, with the already huge A321NEO/LR backlog. While A330NEO already was looking weak.
What if Airbus went back to it’s roots; a replacement for the A300-600?
Possibly this could launch in 2023 when Covid is behind us. I expect this will lead to a A330NEO replacement EIS around 2030.
The trouble with that is that airbus will then be in the middle of a large development project when Boeing launches its NSA /757 thing, making it difficult to respond.
>I actually didn’t get why Airbus launched the A321XLR
Because airlines told them they wanted that aircraft and then backed that up with orders.
4t more MTOW and the new tank might not have been expensive to do and parts of it can improve the whole family.
Also it might not be about the 4700nm range only, the payload till 4000nm increase too.
And now they are designing a new much needed wing.
A great prospect for airlines.
On my browser (Firefox), all reader comments seem to have been removed from this article (Feb 4).
Me too, and I had said so many things that could have changed the world……
There were technical issues that blew up the comments on all the podcasts. Sorry to all the readers. They can’t be recovered.
Scott, where they so bad? 😉
Technical issues are fixed, comments recovered.
On A330 tanker variants, some indications on the KC-Y competition.
“The KC-Y is “what we call the bridge tanker,” she elaborated. There will “be a full and open competition for a non-developmental tanker — in other words a commercial capability that’s out there, or can be developed. Right now I know of two types that are out there, Airbus and Boeing.”
https://breakingdefense.com/2021/02/amc-hopes-to-wrap-analysis-of-next-gen-tanker-options-in-2022/
I wonder though, if the KC-CX ope ncompetition didn’t learn us an open competition, selection process is a waste of time if congress has already made up their mind. Specially if Boeing needs help badly. Maybe just put the specification in front of Boeing and LM and request a joint proposal. It might be the requirements have to be “upgraded”, “clarified” to match a platform, but nothing new to that.
The KC-Y program (or bridge tanker) will be competitively bid. Lockheed will present the Airbus MRTT alternative, Boeing will present the KC-46 alternative. USAF will evaluate and we’ll see what they decide.
Right now there are no specs or defined mission for the KC-Y program. Those likely will not be developed until the KC-46 reaches combat readiness. When those are released, there will be a clearer picture.
A third option that may come into play is commercial tanking services. That could lower risk and spread resources as contractors could choose their own aircraft.