Part I
The first
thing that comes to mind with the above headline is that Airbus recognizes it
has lost the wide body war when it comes to its technology. Boeing claims that
title. After a six month huddle behind closed doors and diminishing wide body
order book, the Airbus coaches have instructed its team to come out with a zone
flood of A330-800 and A330-900 metal NEO's, raising a white flag over the A350
family of aircraft who has developed two ailing A350 types in the A330-800 and
A350-1000. Airbus even hinted at building an A350-1100, which to my knowledge
remains under consideration. Delivery for the A350-900 begins in earnest at the
end of 2014.
The
Airplane "Board Game" has changed positions for Airbus. It is now
lined up at its Waterloo! They will bring in battalions of older and remolded
A330's, fixed up under 24 months of engineering and plug and play Airbus
dynamics. They will also feature Commercial Off The Shelf Technology (COTST) in
engine alignments and avionics. Airbus will expand its A330 interiors with
hopes of impressing travelers with "Smoke and Mirror" COTST plug-ins
so passengers will delight in an air crafts play room. It still will remain an
A330 with a new Tag called NEO. Airbus hopes to swamp its airline customers
with the promise of equivalence to the 787 up to a mileage limit. Its the
Airbus version of the cancelled 787-300 plan of a "Hub Router", and
is not a "dedicated line" to where you want to fly anywhere in the
world. Computer junkies will understand these previous sentence. The
trade off is price remains under its competitor the 787 families and airlines
can buy a marginal amount of additional (stable priced $$) fuel, since Airbus
claims a similar fuel burn, A significant fuel increase wipes out the Airbus
strategy. If fuel jumps up a dollar a gallon then the Airbus arguments
disappears.re a greater cost of a fill-up then would eat into airline cash
flows.
The
lesson here is numbers. Boeing compares its advances on fuel burn with the 767,
thus getting a unprecedented 22% improvement over the 767. Airbus comes in with
its 14% improvement over its own A330, derived from engine technology and wing
applications that improve the drag coefficient.
A330-200 767-300
Fuel Cost (Per Nautical Mile) $29.40 $24.02
The chart
above shows base model comparisons how Airbus shows a comparable fuel burn.
Using a A330 NEO 800 and the 787 is a bit convoluted as is most Airbus
statistical data. The cost by revenue seat is an objective of comparative
performance data point. The A330 goes farther than the 767-300 by holding more
fuel. The seat mile cost increase on the A330 can be attributed to fuel weight
on board the A330-200, an acute issue on the long legged routes. Airlines fuel
the aircraft with an optimized load based on route length needs, rather than
running at full load of fuel. It is fuel compensated also for passenger loads.
Therefore, the seat cost per mile is an important statistic..
In this case a 14% percent NEO improvement compared the A330-200 would reduce
its seat cost by about $3.00 per mile down to $26.40 from its above $29.40. It
is important to know the A330 carries more fuel and passengers than the 767.
The seat mile representation takes that into consideration. For the 767 it
achieves better than $5.38 a seat/mile cost savings over the A-330, but the
A330 goes farther. As will the A330 NEO and the 787 family of aircraft. Lets
see the head to head A330 NEO/787 comparisons on seat mile statistics, when the
A330 NEO flies.
The A330 NEO is a 14% improvement over its former self, and that
compares with the 787 being 22% better than the 767? In all this comparison, it
is apparent that the A330 NEO will fall short of the 787 on several fronts. The fuel
burn will be close during short hops comparing with the 787. Classified as
traveling Hub to Hub routes, but it will lose or come up short when comparing
actual percentages with the 787 no matter what distance the 787 travels with
the A330 NEO following the identical 787 route. For that matter, someone
like Delta Airlines may opt for a cheap fix on its fleets by purchasing many
puffed up A330 NEOs on an airplane replacement order for its fleet, at
heavily discounted prices. When Delta routes go further out to- the-Orient,
they will want the 787-10 or the 787-9's. The only way Boeing wins the Delta
replacement order is from internal analysis of operational savings from the
787. That advantage is gained from maintenance with Boeing operational systems
and improved 787 technology, which
can save up to 30% more for the operator over the 767 example. This Boeing
claim has not been discussed much since the 787 delivery into service, and
should by now be the topic of discussion. How well does the improved systems
help the the operator and how much money is saved by the operator when
employing the advanced 787 maintenance systems and equipment improvements?
When there are hard numbers found for that Boeing claim of 30% improvement on
maintenance programs with the 787, it will be echoed in this blog. The A330 NEO
must take that Boeing claim of 30% on ground savings into account as well as
the 22% 787 fuel savings per seat/mile as illustrated above with the 767. They
certainly did not want to compare the A330 NEO straight across with the 787,
where it would open it up to a real comparison. The book price of an A330-200
is about 141 million. What will be the cost of a A330 NEO- 800? If Airbus has
to retool the A330 program to the NEO style, then it may have drain another
several billion into the program using quick and dirty engineering short cuts
to make it by 2017 for the first A330 NEO delivery. Its a lot more aircraft
than the A320 NEO. Airbus of course will bring lessons learned from its first
A320 NEO project to the A330 NEO. How the time issue is worked out for its
customers, indicates many short cuts taken, and a departure from new technology
application a must. The A330 NEO will become a works in progress after first
delivery. New applications can be added later after it delivers in the form of
upgrades.
The Airbus strategy is rapid deployment with what they have on the cheap. Keep
the start-up project under 2 Billion $US, and done by 2017. That gives Boeing
another 2.5 years to deliver 787's. The current number stands at 171 units delivered,
by 2017 that number will gain by at least 10 a month over the Next 30 months.
Add 300 787's flying in service by January 2017 for a total of 471 787
airborne. Leaving about 600 more to build before depleting the backlog.
However, Boeing will sell more 787's in the next 30 months. They may keep up
the selling pace with the build rate of 120 units a year. In 2015 I have predicted
a sales rebound year for the 787. The last 6 months has been quieter than its
early years in the program. This current pause period is where Airbus
establishes the new line announcing the A330 NEO. The Airbus strategy assumes
it can grab customers who are waiting for a Boeing Backlog shrinkage, before
ordering, and Airbus will count on Boeing customers jumping ship from Boeing
going to the front of the A330 NEO line.
Even though, Airbus gained 121 orders for the A330 NEO at Farnborough, it is not
a significant number when analyzing that part of the Airbus order book members
and purpose for buying. That group did not explain if they were in pursuit of
the 787, and then switched back to the A330 NEO. Instead, they explained it was
an opportunity for a cheap ungraded aircraft where they could compete on
intermediate routes. The A330 NEO is limited to those routes. The 787 can do
those routes as well as going on long thin routes when the need arises. You
will pay more for 787 flexibly and value, but not that much more. The bargain
hunters would never buy a 787 in the first place, because it’s not part of its
business plan. The Delta business model, who is considering an A330 NEO is a
stop gap order where they could consider leasing the A330 NEO. Does this A330
consideration over the A350 mean a failure for Airbus? Yes, it does and it
signifies panic in the board room. Billions on the A350 and A380 without a
significant victory over Boeing is panic in itself. The Re-emergence of the
A330-NEO is the finger in the dyke.
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