Saturday, July 19, 2014

Special Report: Airbus Launches A330neo as a Competitor for Boeing 787

By Vinay Bhaskara / Published July 14, 2014

A33neo-1-2FARNBOROUGH, UK: Airbus formally launched the Airbus A330neo at the Farnborough air show on Monday, composed of a smaller A330-800neo and a larger A330-900neo. The jet is set for entry into service (EIS) in the fourth quarter of 2017. At a briefing conducted by Chief Operating Officer, Customers John Leahy and CEO Fabrice Bregier, Airbus revealed several details about the new aircraft program.

While Airbus had been vacillating about the launch of the re-engined A330 for some time, with Mr. Leahy stating that the A330neo program’s fate was unclear as recently as June, Airbus proceeded with a full public launch on Monday. “The board of Airbus Group approved the launch of the A330neo unanimously this past weekend,” said Mr. Bregier, indicating that Airbus had grown comfortable with the sales prospects of the A330neo. Mr. Bregier indicated that Airbus expected to sell at least 1,000 A330neo aircraft over the next 15 years, with production extending at least until 2030.

In his role as Airbus’ pithy pitchman, Mr. Leahy is certainly wont to exaggerate sales prospects, but as per Airbus’ most recent projections, unfilled demand for 250-400 seat widebodies over the next 20 years includes 4,600 aircraft. Of those, 600 aircraft require more range than either A330neo model offers, while 2,600 aircraft aircraft are required by existing A330 customers.

Airbus President & CEO Fabrice Brégier speaks to reporters during the A330neo launch briefing on Monday in Farnborough.

Airbus President & CEO Fabrice Brégier speaks to reporters during the A330neo launch briefing on Monday in Farnborough.

Despite the apparent simplicity of the re-engined aircraft, Airbus will incur a development cost of between one and two billion euros (US $1.4 – 2.7 billion) for the A330neo, which will feature several changes from the existing platform. “This investment was not planned, so it has a very short term negative impact on Airbus Group in 2015,” said Mr. Bregier, who noted that the launch would have an impact of 0.7 percentage points on return on sales (ROS) for the year.

While the A330neo will retain 95% commonality with today’s A330, there are several changes to the aircraft that are aimed at improving its aerodynamics. The wingspan of the aircraft will be extended by 3.7 meters to 64 meters, with re-twisting used to further optimize the span. The wings will also feature the sharklets seen on the A350 XWB, but critically will retain Code E status, allowing them to fit into current A330-approved gates. “We do not need to make it look like a fighter aircraft with folding wings,” said Mr. Leahy in a pointed barb at rival Boeing’s folding wingtips for its upcoming 777X program. The aircraft will also feature new engine pylons, but will retain 95% spares commonality with the A330ceo and a common type rating with the A350 XWB.

In terms of weights, both the A330-800neo and the A330-900neo will retain the 242 ton maximum take off weight (MTOW) currently enjoyed by the A330-200 and A330-300. The A330-800neo will have a maximum landing weight (MLW) of 186 tons, and a maximum zero-fuel weight (MZFW) of 172 or 176 tons. It will be able to fly 252 passengers ( 36C / 216Y ) over a range of 7,450 nautical miles. The A330-900neo will have a MLW of 191 tons, and MZWF of 177 or 181 tons. It will be able to fly 310 passengers ( 36C / 274Y ) over a range of 6,200 nautical miles, and will have a list price of US $275 million.

The A330neo will be powered by the new Rolls-Royce Trent 7000 engine, a modification of the Trent 1000-Ten featured featured on the Boeing 787-10. The Trent 7000 will see an increase in fan size from the present A330′s 97.5 inches to 112 inches, critical for delivering the promised 11% improvement in fuel burn. The engine will also feature an electronic bleed air system (EBAS), between 68 and 72 thousand pounds of thrust, an increase in bypass ratio from 5:1 to 10:1, and an increase in pressure ratio from 35:1 to 50:1. 

That 11% improvement in fuel burn is critical to Airbus’ promise of 12% lower fuel burn per trip and 14% lower fuel burn per-seat for the A330-900neo versus the A330-300. 11% of the per-trip improvement comes from better engine performance and an additional 4% from aerodynamic improvements, while 3% is lost thanks to increases in weight and drag due to the larger engine and other modifications resulting in 12% lower trip cost.

Direct maintenance costs are set to decrease by 5%, with 2 percentage points of that improvement occurring due to the new EBAS. The remaining three percentage points arise due to changes in scheduled maintenance such as pushing back 2C evolution from 42 months to 48 months. In sum, these changes will reduce the maintenance man-hours required to service the A330neo over a 12-year program by 50%.

To reach a 14% reduction per-seat, Airbus is set to increase the seating capacity of both the A330-800neo and the A330-900neo. “With Kiran Rao’s Space-Flex, we can actually get 6-10 more seats in the airplane,” said Mr. Leahy, noting that the smaller of those two numbers (six seats) yielded the final 2% improvement.  “That is game-changing, 14%.” The Space-Flex program increases seating capacity by moving around lavatories and galleys on board the aircraft, and paired with ICE (Increased Cabin Efficiency) initiatives such as placing the crew rest area mid-underfloor, will allow Airbus to match Boeing’s 787 seating capacity and space efficiency. Airbus believes that it’s new interior offering will be extremely competitive. “The new interior will have exactly the same passenger experience and comfort as the A350 and 787,” said Mr. Leahy, “The only way a passenger will know that he’s not on a 787 [when flying the A330neo] is that his seat will be bigger.”

Indeed the comparison with the 787 is a key one for the A330neo program, with Mr. Leahy claiming that the A330neo will offer 1% lower cash operating costs versus the 787-8 and 787-9. Moreover, Airbus will be able to offer competitive pricing on the A330neo. “Because we’ve got an already paid off airplane, we can offer it at a much lower cost,” declared Mr. Leahy, who hinted that Airbus was aiming to provide 7% lower total operating costs than the 787. Steven Udvar-Hazy, the CEO of lessor Air Lease Corporation (who ordered 25 A330neos), agreed with Mr. Leahy on pricing in a subsequent press conference, opining, “I don’t believe they [Boeing] can close the pricing gap [with the A330neo] in any significant fashion.”

Boeing will likely point to the 787′s superior range, and even Mr. Leahy admits that “We [Airbus] are 1000-1500 miles short of the 787-9 & A350-900 range.” But Mr. Leahy predictably brushed off concerns that this extra range would confer an advantage for Boeing, stating “We cover 93% of required missions with the A330-neo… From London we can go all the way nonstop from London to Honolulu.”

Some may question the accelerated time frame for the A330neo’s development, which would see design freeze by the end of 2015, with the A330-900neo EIS scheduled for the fourth quarter of 2017 and the A330-800neo in early 2018. Mr. Bregier admitted that Airbus has been quite aggressive with its timeline, “We are able to do it [A330neo development] in only three and a half years, which is quite new in this business… We are doing the A330neo in one and a half years faster than the A320neo.”

Of course Airbus can leverage the existing strength of the A330 program.  “We have sold more A330s than Boeing 787s over the last five years,” said Mr. Bregier, adding that the A330neo was the culmination of a strategic shift at Airbus, “We insisted that we are launching brand-new products like the A350 when it makes sense, but we are also looking for faster incremental improvements.”

Despite the strength, the current-generation A330 does pose challenges in terms of bridging the production gap between current production and EIS at the end of 2017. “We have a couple-hundred sales to fill,” said Mr. Leahy, also noting that ”[Airbus] had virtually no conversion of A330ceos into neos.” Sales of a the existing A330 freighter could help buoy the gap, as Airbus are not planning a freighter version of the A330neo at present. And Mr. Leahy concluded his briefing by emphatically proclaiming, “We don’t worry about bridging the gap between the A330ceo and the A330neo.”

Ray Conner, CEO Boeing Commercial Airplanes, talks to reporters during a press briefing Monday in Farnborough.

Ray Conner, CEO Boeing Commercial Airplanes, talks to reporters during a press briefing Monday in Farnborough.

Meanwhile, one room over, Boeing Commercial Airplanes CEO Ray Conner was giving a briefing on its myriad programs. When asked his opinion on the jet and the coming competition versus Boeing’s 787, Conner stated simply “I look forward to it.”

Boeing executives have displayed a strong, confident, and fairly dismissive position thus far on the topic of Airbus’ new neo. Conner said they’ve known the airplane in the 1980s and in 2004, adding that he knows what the airframe can do, particularly in comparison to Boeing products. Reporters attempted to fill in Conner on the new details of the neo, including the improved wingtips, only to be batted down. ” We understand all that,” said Conner, “And we’re still very comfortable with where we’re at.”

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Contact the author at Vinay.Bhaskara@Airchive.com
Jeremy Dwyer-Lindgren contributed to this report.

Photos by Jeremy Dwyer-Lindgren / Airchive

 

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