Airbus faces challenges for its newest mid-sized aircraft line as two customers reconsider their orders. The A330neo, a re-engined version of the company’s successful twin-aisle aircraft, faces competition from Boeing, of course, but also from Airbus’ own A350 line. With relatively light sales so far (210 firm orders) and potential defections from those confirmed orders, the future of the model could be in jeopardy, even as its first flight is slated for next week.
Hawaiian Airlines never really wanted the A330neo in the first place. The carrier was a customer for the A350-800, the smallest variant of that type, but Airbus received insufficient orders and ended up bailing on the model. As part of that move the airframer pushed Hawaiian to the A330-800 to realize similar range and capacity. Alas, Hawaiian is the only customer for that type and with only 6 frames on order that’s not a good place to be. Hawaiian is a big Airbus customer, converting from 767s to A330s over the past few years and adding the A321neo to its fleet this year. But prudence suggests not being the only customer for an aircraft type. Even Emirates is hesitant to be the only ongoing A380 customer with a huge number of that type in service.
And once the A330-800 is off the table for Hawaiian its choices from Airbus are slim. The A330-900 has shorter range and higher passenger capacity. Neither of those are particularly appealing to Hawaiian. Filling in those gaps are Boeing products in the form of the 787 Dreamliner. Hawaiian can likely convert the A330neo order to A321neos or otherwise defer in a way so as to not lose its initial deposits should a vendor swap come about.
AirAsia X Adjusts
The largest firm order for the A330neo is a 66 plane deal struck with AirAsia X in December 2014. The carrier covers 30% of the order book and as of this week CEO Tony Fernandes is talking about adjusting the plans to something a bit bigger. Fernandes is eying the A350 line as an option, not because he wants the longer range that type offers but because of the higher passenger capacity it enables. AirAsia’s current order book lists both the A330neo and the A350 as future deliveries. The company now appears keen to choose just one type to operate. Fernandes also suggested that the 787 is in play, though the group is an all-Airbus operator today.
AirAsia’s hesitation is also tied to “slipping” of delivery dates on the A330neo. And, yes, the A350 also faced delays but that program is stabilized now. Switching to the A350 likely means a much more consistent aircraft delivery schedule for the planes, something a growing airline depends on.
The A350 is slightly more expensive at list price (~10%) than the A330neo but it is unclear that would necessarily carry through to the discounted rates airlines typically negotiate for large orders. And the initial cost of the aircraft is not the only consideration. Representing a third of the operating fleet in a single airline carries some risks.
And, while Airbus “wins” by selling more of the more expensive plane it could be a Pyrrhic victory. A premature end to the A330 family future sales channel is probably far worse overall than the few hundred million extra dollars it gets for an “upgraded” sale to Air Asia X.
I also cannot help but wonder if Airbus did itself a disservice making the A330neo and A350 so similar in size and range. Had the A330neo come in as a regional model, covering up to 4000 miles and way cheaper to operate, the market may have looked very, very different. There is precedent for such. Airbus has an A330-300 Regional model with reduced maximum thrust and total weight that drops OpEx by 26% according to the company. That’s the sort of deal the regional and LCCs carriers were looking for.
Header Image: Air Asia X A330-300 via Kentaro IEMOTO/Flickr/CC-BY-SA
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Poor strategic planning by Airbus. 330 was their bread and butter (I assume, based on how many thousands of them are out there).
It looks like they tried to replicate the 757 role and just missed.
The 757 is significantly smaller and with a much shorter range. The A321neo meets about 90% of the 752 missions, though not nearly as sporty.
The A330neo theoretically was to compete with the 787 and the A350 to the 777. But both Airbus and Boeing kept going bigger with their planes in addition to more efficient. On one hand that makes sense as airport and ATC congestion are real and pax count continues to grow. But that also assumes some historical trends like hub-and-spoke and smaller regional routes continue. With the much higher density of passengers in Asia (also where growth is fastest) a need for larger regional (4-6 hour trip) aircraft is pressing. Neither Boeing nor Airbus has a viable option dedicated to that segment. They both built for bigger/longer and that’s hurting now as there is too much overlap.
The 757 is also a 40 year old design, so yeah, I’m sure the more modern airframes can fill the role. Still, Boeing is aiming their 797 at a mid-market aircraft between the 737 MAX and 787-8. I saw their preview images and it looks like they lopped 10 feet off a 787. No sonic cruiser for us I guess.
totally agree on the 330neo Regional concept would’ve been MUCH better. Other than DL, no one else is all that excited about the 330neo.
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