Tuesday, July 15, 2014

Making The A330 NEO Get Legs

The press always remarked this story has legs. Otherwise known as a story with validity which continues to give readers more information as it travels through the press junkit. The A330 NEO legs comes from buyers of that NEO as they try to convince its competitors the NEO is going to the throat of Boeing's family of 787's. Here lies the truth. The A330 NEO doesn't have time to load up on a raft of new technology for competing with the 787. It Doesn't incorporate plastic  as a  787 and it will only take on new sharklets and accessories it has developed from its A321 NEO program. It may barrow from the A350 which is already losing against both the 787 and the 777X Boeing programs. Don't forget new engines just like Boeing's new Rolls Royce engines on the 787. All the bluster coming from John Leahy and his loyal minions don't take into account the saturation's of the 787 program in three years. The 787 will have lowered the construction cost and build time significantly in three years. Reliability, will be at 99% compared to a questioned marked A330 NEO. If the A330 sells for 150 mullion US in 2017, then a high priced 787 will out perform significantly for 200 million. The 50 million savings will go off faster from fuel cost and less efficient maintenance cost on the A330 NEO.

This all remains to be seen much like John Leahy salesman claims for the NEO project. The A330 is hiding under the name NEO, as it won't have as great of an ROI as the 787 does. The 787 will fly for a longer duration in time than the all metal aircraft. Once the customers catch up to 787 technology they will understand the advantages are so significant for its airplane, that a NEO seems so yesterday.

By 2020 Airbus must have a better plan than the A350. Boeing is not waiting for them as it continues to improve the "All New" technology incorporated, since the first tests on the 787.  The return on Boeing's technology by 2020 will assure the success of Boeing owners. The long legs of the 787 and 777X will matter in the future.

The A330 NEO is fine for new emerging airlines who can't afford the 787, but will eventually need the 787 in order to compete, as it own business matures into a legacy airline. The fly-by-night types will want the A330 NEO. Airbus is making itself a second tier manufacturer, and builder of aircraft with 20 year old technology. It will be 40 years old by 2030 when Boeing continued upgrades on its currently fresh technology on the 787. They will make a less expensive 787 by millions in 2020, just when the A330 NEO following understands the market better, and starts ordering 787 at that time. A hub to hub network is a dime and nickel way to build an airline business. Direct routes from any airport is the cash cow concept that Boeing has researched out, and Airbus failed to recognize when building its behemoth, The A380.

Its recent comments from new owners of the A330 NEO echo John Leahy sentiment, that the A330 NEO attacks Boeing's throat directly. All this in a metal airplane with only three years ramp -up time? Cheap price then, is the "new Airbus technology". A cheaper aircraft that does less is for dumb-down customers who can't get on board the 787 fast enough making a difference for its own operations. The A330 NEO is rapidly becoming a disposable aircraft. Get rid of it once you qualify to buy a 787 directly, and cancel the lease on a A330 NEO runabout.

I see the smart acquisition programs of several A330 NEO launch customers going the lease route. They don't intend to stay with the A330 NEO but is a useful stop gap methodology of leasing the NEO, until it's ready to purchase the 787's or 777X when it settles down. News flash The 787 is settling down rapidly with a large order backlog. The hands of second tier airlines are tied at this time for getting in line for a 787. An A330 NEO is a cheap knock-off (Rolex) 787, while it bridges the airline maturation gap until it becomes one of the legacy big boys, and they can buy a full suite of aircraft from Airbus competitors. What's remains for Airbus is to redo the A350 program correctly by 2030.