Airbus (EADSY, Financial) did give a stellar performance at Farnborough Airshow leading in the order count and beating its rival, Boeing (BA, Financial) this time at the Airshow. Customers flocked in huge numbers to have a glimpse of its fuel efficient aircrafts which helped in stealing the attention of low cost carriers and leasers who want to buy airplanes which consume less fuel and aid in retaining substantial profit margins.
Airbus has been in a fight with Boeing since the last few years, mainly in the wide bodied segment where it has lagged behind the latter and is still playing a catch up game to generate more orders for its wide bodied airplanes. This time at Farnborough, both the narrow bodied and wide bodied airplane segments of Airbus got their due attention, and in each category there was a best-selling plane. Here’s the snapshot of the total story.
The A-320 neo. Source: Airbus
The A320 re-engineered version gets the limelight
Airbus has always reigned supreme in the narrow bodied aircraft family and has ruled over Boeing through the years. The A320 has long given a dogfight with Boeing 737, and now its re-engineered version announced in December 2010, the A320 neo, has set the stage on fire.
The A320 neo family that would provide 15% more fuel savings that its predecessor has clearly demonstrated its market leadership right from the month of its launch. As per Senior Vice President of the A320 neo program, Klaus Roewe- “This ongoing market demand is based on a successful recipe. If you want to have a tasteful meal, you need to have good ingredients – so you need to have good materials and you need to have a good process.”
Interestingly quite matching his words, the A320 neo family has eclipsed the 3,000 order milestone as a result of commercial activity, with the jetliners’ booked by 57 customers since its formal launch. And something to indicate that the new engine option grabbed the limelight of the show is that this milestone was crossed after garnering an impressive 363 commitments worth $39 billion at this Paris Airshow.
This milestone which was like icing on the cake was reached when SMBC Aviation Capital ordered 110 A320 neo aircrafts marking the biggest vote of confidence for Airbus’ leading single aisle aircraft family. The 363 commitments included 317 A320 neo and A321 neo aircraft worth $34.4 billion which clearly reflects how the A320 family still continues to outpace competition.
The A-330 neo mockup. Source: Airbus
The A330 neo adds ultimate value to the A330 family
Airbus’ decision to upgrade the A330 was announced on the first day of the Farnborough airshow with the launch of the A330 neo in two variants – A330-800 neo and A330-900 neo versions having passenger carrying capacity of 252 and 310 respectively. The new engine option is more aerodynamic and has upgraded fuel efficiency features, both being customer attraction points.
Airbus’ CEO, Tom Enders stated during its launch – “The A330 is one of the most reliable and efficient commercial aircraft ever. With our decision to re-engine the plane, we will keep the A330 flying high for many more years to come.”
He emphasized on investment in A330 neo production from 2015-2017 with the airplane entering the delivery schedule by end of 2017. And all his words were proved right as the bulk first time orders started pouring in Airbus order book soon after the launch.
Several leasing companies opted for the A330-800 neo which is the smaller version of the re-engineered aircraft. For the larger version, the first order came in from Los Angeles based Air Lease Corporation that signed a provisional deal for 25 A330-900 neo version, along with a firm order for 60 smaller A321 neo planes. The landmark deal for A330 neo was struck after Air Asia signed a deal for 50 A330-900 neos worth $13.8 billion.
Orders from other large firms such as Avalon and CIT also poured in after the launch of the A330 neo version. The dying A330 is currently facing dearth in orders and at such a juncture the launch of A330 neo version serves as a silver lining.
In total, 121 MOU commitments were signed at the airshow with customers for the A330 jetliners in the A330-800 neo and A330-900 neo configurations.
The final conclusion
The European planemaker knows well how to use existing platforms for making upgraded aircrafts which can strike gold for the company at the right time. The A320 and A330 neo versions of Airbus have intensified its battle with Boeing and are selling like hot cakes.
