Monday, July 14, 2014

Airbus Made It Official Its Plan B-NEO

Airbus has announced its plan B response to the 787, The A330-800 and A330-900 NEO. It echos off the 787 -8 and 787-9 as its competitor. The A350-1000 cannot hold out against the 777-8X and 777-9X programs, as both those types have combined sales greater than the A350-1000. Qatar demonstrates a hissy fit towards both makers as it loses out on playing one airline producer against the other, so it castigates both as Airbus goes as being a second tier supplier for selling its airplanes. Qatar will be hard to play Airbus against Boeing in this scenario. Emerging airlines will want a faux "787" by ordering a cheaper A330. Qatar is a first class airline and can't play one against the other to achieve a solid order from either one as it now must chose between the A330 and 787. The A350 project is in shambles at this point, as it has failed at both ends of its family of aircraft where the A350-800 and A350-1000 are blocked and locked out of the game, hence the A330 NEO.

The claim, by Airbus, is 14% fuel economy improvement, which does not reach the 20% fuel improvement of the 787-8 offering. However, the lower cost of capitalization (Cheaper purchase price), and lower interest payments will pay the difference on fuel. What Airbus fails to note is the other cost associated with its airplane vs the 787. Boeing claims 30% less maintenance and wear and tear cost. The A330 NEO is a short term fix until Airbus can get its act together. There are those passengers who will eat fast foods on vacation or business and some who will eat at nicer restaurants as part of the vacation and business experience. Airlines that are emerging that have a skinny line of credit which could opt for an A330 NEO, as a "second tier customer", which is known in the commercial industry of moving passengers en mass on cheaper aircraft.

Keeping lower capitalization cost, Airbus will have to NEO the A330 with its own plug and play refinements. The engine builder is the key in this proposition.  Airbus does not have the wing technology that Boeing possesses. This will be an upgraded A330 to the best of Airbus' ability from its own off-the-shelf non plastic airplane technology. The End.