Tuesday, October 10, 2017

AirAsia X Has(d) 66 A330 NEO's

AirAsia X has entered negotiations with Airbus into converting 66 A-330-900's it had already ordered into a like number of A-350-900's. It also mentioned talking to Boeing about its 787 as if an insertion into this news slice. This also opens up a huge topic for Airbus. It only shows 206 A-330-900 NEO's ordered program-to-date, noting zero booked for 2017. If it does switch that order to 66 A-350's, it would harm the A-330 NEO program immensely. As an Airbus A-350 switch deal confirmed, Airbus could then show only show 140 A-330-900's in a one for one deal. AirAsia X holds the the life force of the Airbus aspirations for its A-330 NEO campaign.

Currently, Airbus has Booked 858 A-350's with 114 of its type delivered. An AirAsia X switch to the A-350 from the A-330-900 NEO would effectively stun the Airbus NEO program. The other part of the program is the A-330-800 with only 6 ordered. The NEO program would shrink to 146 A-330-NEO's booked which places that Airbus program as a lost leader program feeding into its A-350. 

Airbus plan "B": If an Airbus deal is struck for switching to 66 A-350's from the A-330 NEO's it will not catch Boeing's hold on the medium wide body market. In fact this may be something of Airbus' own making. In addition the deal may only involve going from 66 A-330 NEO's to 50 Airbus A-350's. There are many possibilities in this transaction, but all have Boeing's gun held to the Airbus' head.

Airbus could conceivably flip its A-330 NEO customers into A-350 customers as a last ditch maneuver. If it did do a flipping maneuver it, would signal the A-330 is a non starter and the A-350 needs support from its other offerings. Sixty-six is a big number and Airbus could make a better impression on the wide body market place by turning AirAsia X into a large A-350  customer since it already has 10 A-350's on order.

Boeing was mentioned earlier, and it would seem it has little or no chance disrupting this situation. The mere mention of Boeing to Airbus through media reporting benefits AirAsia X for receiving a favorable pricing offer from Airbus. It has a disadvantage with AirAsia X for it too can lever a favorable market price offering. It's an AirAsia X gotcha effort. 

If Boeing were to give away the 787 to AirAsia X in a bid, Airbus would be inclined to do so in response. It's coming down to a medium wide body end-game. 

If AirAsia X wants to kill the A-330-NEO program it can by accepting an A-350 like order. If Boeing wants to kill Airbus aspirations in this market segment it can give away some airplane as if making an Airbus kill shot targeting two of its programs at the same time. 

However,  Boeing may have more fish to fry elsewhere and will probably defer its WB order efforts in a different direction and let Airbus kill 66 of its own A-330-NEO's and enhance its A-350 order using low ball pricing for AirAsia X. Boeing will go north of 1,300 787 orders this year without squeezing off an forced deal in this direction.