Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Teamsters, Boeing have a new contract April 29, 2025
- Boeing wants to remarket China’s airplanes. It’s costly and time consuming. April 28, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 19. April 25, 2025
- How good is the C929? Part 2. April 24, 2025
- Boeing First Quarter Results Update: China is 10% of the backlog, with 500 in “Unidentified” April 24, 2025
Airbus lowers range of A350 on increased capacity assumptions
Airbus this week quietly lowered range for the A350 family on increased capacity assumptions.
The range changes appeared without fanfare on the company’s website. When we inquired, a spokesman said,“Seat figures in our public documents have been changed from typical three-class to two-class layouts, as it’s turned out to be a more realistic scenario for most of our customers. Consequently, as passenger capacity has gone up, the new pax numbers and their calculated weight give lower range figures.”
However, as of Thursday’s close of business, the website still refered to three-class configurations:
A350-800 landing page:
The A350-800 is the shortest fuselage version in Airbus’ new A350 XWB all-new family of mid-sized widebody airliners. It accommodates 276 passengers in a typical three-class cabin configuration, with a flight range of 8,250 nautical miles.
A350-900 landing page:
This jetliner typically accommodates 315 passengers in a three-class configuration, while offering unbeatable economics in high-density seating and true long-haul capability with a range of up to 7,750 nautical miles.
The A350-900 Specification page still contained this statement:
The A350-900 offering a typical passenger capacity of 314 seats (in a three-class layout) and operating range 8,100 nautical miles.
A350-1000 landing page:
In a typical three-class configuration, the A350-1000 seats a total of 369 passengers. Combined with a range of 8,000 nautical miles, this represents a significant revenue-generating advantage for operators. The aircraft also can be configured for a higher-density layout to accommodate up to 400 passengers.
The ranges were previously 8,400nm, 8,100nm and 8,400nm respectively. The previous three-class seating configurations listed were 250, 301 and 350 respectively.
By Friday morning (PST), these landing pages had been fixed, and these now refer to two-class configurations with the capacities as listed above: 276, 315 and 369.
Assessing the 777X events for Washington State, IAM, Boeing
Update, Nov. 6, 10:00am PST: A summary by IAM 751 of the contract details is here.
Original Post:
Here’s our take on the news that the IAM and Boeing reached a tentative agreement leading to the selection of Washington State as the assembly site for the 777X, contingent on contract ratification and the Legislature approving an incentive package:
- IAM 751 is both a winner and a loser. Members lose the defined pension plan benefits and pays more for health care benefits. But they keep jobs assembling the 777X, and the siting of the composite wing production here reinforces the expertise of composite development in the Seattle area. These wins outweigh the loss of the benefits.
- Washington State is a winner. This is self evident. The fact that a transportation package is a must–one has been stalled for a long time–not only benefits Boeing but it benefits the state as a whole. Let’s hope the “no new taxes under any circumstances” Republican Party finally wakes up and votes for this thing. These extremists could kill the entire deal.
- Boeing is a winner. It gets labor peace from the IAM through 2024. It gets an experienced, high quality workforce instead of gambling Boeing Charleston–which remains problematic–would be up to the task in five years, when assembly begins. It gets cost reductions on the pension plans and health care benefits.
- Customers are winners. See number 3 re: Everett vs Charleston.
- SPEEA is probably a winner. With the wing and airframe coming to Puget Sound, SPEEA engineers here will certainly get its share of the work, despite the recent announcement that Boeing was putting engineering everywhere but here.
- Boeing Charleston and South Carolina, the presumptive alternative site, are losers. No explanation required.
A big question mark:
As we previously wrote, extending the 787 tax breaks to the 777X through 2040 (with a value of $8bn, more or less) is problematic. These were ruled illegal by the World Trade Organization in the US (Boeing) vs Europe (Airbus) trade dispute claims and counter-claims. The finding is under appeal, but what happens if the finding is upheld? Then what?
Lots to do:
The IAM membership has to approve the tentative contract; a vote is planned next week. Members will have to get past the benefit reductions, offset to some degree by a generous signing bonus and additional benefits for early retirees.
The Legislature has a lot of moving parts to look at in the next week. The challenges are daunting.
Recommendation:
IAM: Although perhaps painful and anathema, ratify the contract.
Legislature: Approve the package, including the new transportation taxes.
Airbus’ A350-800 dilemma
Last week we discussed Airbus’ A350-1000 dilemma. The -1000 will be a fine airplane, but we concluded the company needs to go forward with a larger capacity “A350-1100” to match the size of the Boeing 777-9X, but take the Boeing 787-10 approach and be content with sacrificing range in lieu of designing a new wing and engines.
Airbus’ A350 dilemma doesn’t end there. What’s it to do with the A350-800? One fleet planner told us a year or more ago that the “-800 is an expensive A330-300” with the same operating costs as the larger capacity A350-900.
Airbus has been encouraging customers to move up to the larger A350-900, with Hawaiian Airlines and US Airways the key hold outs. Conventional wisdom says US Airways will swap its order once the merger with American Airlines goes through (which is looking more and more likely, given settlement talks with the Department of Justice). American has a large order for the Boeing 787-9, making the -800 unnecessary in a combined carrier fleet plan.
There are now around 80 -800s in Airbus’ backlog, and even officials at Airbus have been ambiguous about green-lighting production of the -800, which is supposed to enter service in 2016 (after the -900 but before the -1000). We have written several posts in which we concluded the -800 would be re-sequenced to 2018, after the 2017 EIS of the -1000.
We believe there is a very good chance the A350-800 will be dropped in favor of proceeding with an A350-1100.
So what’s Airbus to do in the 250-300 seat space now occupied by the -800 and the aging A330 family?
Airbus’ A350-1000 dilemma
Airbus has a dilemma with what to do about the A350-1000.
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Does the OEM stick with the -1000 as it is, ceding the 400 seat segment to Boeing with its new 777-9X? Or does it stretch the -1000 (we’ll call it the “1100” for a placeholder) for what appears to be a very limited market segment?
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If Airbus does stretch the -1000, what does this stretch look like? One that will match the 9X range and capacity? Or one that matches the capacity but not the range?
Here are the implications of the dilemma facing Airbus.
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Stay the Course
For a long time, Airbus officials said they were satisfied with the design, once tweaked, of the -1000 and they didn’t need to respond to a “paper” airplane. The characterization had a ring to it, for that’s what Boeing officials often said about the -1000: it wasn’t a “real” airplane, they didn’t know what it was, it was a “paper” airplane or some variation thereto.
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Of course, this was rhetoric by both parties. Lufthansa Airlines ordered 34 777-9s. A huge order+option commitment is anticipated at the Dubai Air Show from Emriates Airlines for the -9 and the smaller, ultra-long range (ULR) -8 that is sized directly across from the -1000. Airbus is now faced with the prospect of Boeing once more having a monopoly position with the 777-9 as it did for many years with the 777-300ER.
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Does Airbus want to cede the 400-seat segment to a Boeing monopoly? The question is, how big is this segment? Is there a business case to build the airplane, or one that’s big enough for two airplanes?
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Boeing’s current 20 year forecast indicated there is a need for 4,530 “small” twin aisle, 200-300 seat jets and 3,300 for “medium” twin aisle jets, 300-400 seats, for a total 7,830. Airbus forecasts a need for 4,694 250-300 seat jets and 2,085 350-400 seaters, for 6,779 jets, a difference of nearly 1,100-but, then, Airbus doesn’t have a competitor to the 787-8 at the lower end of the small jet sector.
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Airbus further breaks out its forecast: 2,438 250-seat and 2,256 300-seat jets within the “small” twin; and 1,306 350-seat and 779 400-seat jets within the “medium” twin category. Boeing doesn’t subdivide its forecast.
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The 777-9 will kill the near-dormant 747-8 Intercontinental and will likely eat into sales of the Airbus A380. Does Airbus avoid cannibalizing its own product or does it allow Boeing the monopoly to do so?
Source: Great Circle Mapper
Match the 777-9
Airbus could decide that, despite a its own narrow forecast for a 400 seat segment, it would be better to play in this sandbox, whatever the impact on the A380, than to cede this segment to Boeing. The question then arises, does an A350-1100 match the 777-9 in seats (or come close to it) and range, around 8,100nm-8,400nm?
To match means a major undertaking for a small number of airlines that need a plane with this range. It means a new wing–typically a $3bn project, more or less–and new engines in the 104,000-105,000 lb thrust range. The Rolls-Royce Trent XWB on the A350-1000 is 97,000 lbs and it can’t be pushed any farther, our information tells us. The cost of developing an entirely new engine for such a narrow market doesn’t have a business case. One might exist on the presumption that engines have to get bigger, and a new engine design would provide the basis for an entirely new generation of engines. After all, the Trent fundamentally has been around since the A330. It may well be time, but is an A350-1100 the product from which to develop it? Furthermore, it takes at least seven years to develop a new engine and probably a lot longer. The engine is the pacing item, far more than the airframe. Even if the go-ahead were given this minute, Airbus and RR would be hard-pressed to come up with an A350-1100 by 2020, when the 777-9 EIS is anticipated. So…
The 787-10 Approach
The most viable option for stretching the A350-1000 appears to be following the approach Boeing took with the 787-10: a couple of simple fuselage plugs, some enhancements to the existing engines, the same wing and reduced range that covers 90% of the markets required by the airlines–foregoing the miniscule need by Emirates Airlines for that last 5%-10%.
Source: Great Circle Mapper
An A350-1100 with reduced range of 7,000nm-7,500nm and a 400 seat capacity would have highly favorable cost per available seat miles. It wouldn’t get you from Paris to Tahiti, but how big is this market? It wouldn’t get you from Dubai to Los Angeles, but are billions of dollars worth of R&D to do so going to get the return on investment to make sense for this airplane?
The clear choice, the financially responsible choice, and the expeditious choice appears to follow the Boeing approach and develop an A350-1100 (or, perhaps, the “A350-1000-10”).
CFM LEAP accelerating in test program; Airbus and the A350-800
Aviation Week has a long, detailed story about the test program for the CFM LEAP engine, which is accelerating rapidly.
In its 737 MAX program update yesterday, Boeing said the LEAP-1B has begun testing and it will benefit from the testing already underway for the LEAP-1A, the version that is designed for the Airbus A320neo family. The LEAP-1C for the COMAC C919 is on its original schedule for certification in 2015, despite the fact the C919 has slipped to at least 2017, reports AvWeek.
The 737 MAX is exclusively powered by the LEAP, as is the C919. The former has more than 1,600 firm orders and the latter just hit its 400th order/commitment. CFM faces competition on the A320neo family from Pratt & Whitney’s P1000G Geared Turbo Fan, where PW holds a 49% market share against CFM, which previously held a larger, more dominate position in the A320ceo competition. A large number of orders don’t yet have an engine selection.
PW is the sole-source engine provider for the Bombardier CSeries, the Mitsubishi MRJ and the Embraer E-Jet E2. PW splits the engine choice on the Irkut MC-21 (soon to be renamed the YAK 242) with a Russian engine.
Just as Boeing’s LEAP-1B will benefit from the experience of the LEAP-1A now in testing for Airbus, Airbus will benefit from the testing and experience of PW’s testing of the GTF on the Bombardier CSeries.
Aviation Week also has a story about the Airbus A350-800 with the blunt headline, The airplane Airbus doesn’t want to build. This refers to the A350-800. AvWeek muses that the outcome of the merger between US Airways, now the largest customer for the airplane, and American Airlines, may be the deciding factor for the airplane. We agree. With American’s large order for the Boeing 787-9, the A350-800 would be unnecessary.
That would then leave Hawaiian Airlines as a key decision-maker. We hear in the market that Hawaiian is just sitting back and waiting to see what kind of incentives Airbus will offer to entice a switch to the larger A350-900.