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March 07, 2007

Airbus: the bad news continues

Thomas Lifson
More evidence accumulates that Airbus' focus on it's a 380 super jumbo has robbed the company of the ability to produce competitive aircraft in other, much larger and more important market segments. Airwise.com reports that Airbus orders for new aircraft have fallen to a six month low, with no wide body sales at all in the last month.
"Airbus plane orders have been increasingly dominated by lower-margin single-aisle jets as it wrestles with development problems in its 200-350 seaters and its delayed superjumbo."
Air Canada, which has been a very good customer for Airbus, is replacing its young fleet of four engine A 340 wide bodies with Boeing 777 twin engine models. Here is a statement by its CEO from the companys recent annual report:
"Beginning in March, we will begin replacing our 10 A340-300s and some of our oldest Boeing 767s with a combination of Boeing 777-300ER and 777-200LR twin-engine aircraft. The 777s have a lower cost per available seat-mile than both of our four-engine A340 models - up to 26 per cent lower - and can fly further with a full payload. Two engines versus four mean better fuel efficiency and less maintenance expense."
As I have previously noted, the Airbus' A 320, which is the only airplane for which it got orders last month, faces increasing competition from below. The Air Canada CEO continues his review of fleet replacement as follows:
"Within North America, passengers are giving us positive feedback on our new 93-seat Embraer E-190s with their spacious cabin and extra legroom. In situations where 93 seats are enough, the E-190s carry the same revenue but cost 18 per cent less to operate than our next largest aircraft. With 27 more 190s coming this year and in 2008 for a total of 45, the E-190 fleet is allowing us to strengthen the network and replace some A319s and A320s as part of fleet renewal and rightsizing capacity to our needs to improve our operating margins."
So the company's workers are striking and protesting, its existing aircraft line-up is aging and being replaced by more competitive alternatives, and the company's resources are concentrated on the A 380 boondoggle, instead of producing competitors for the more advanced long range models of the 737, the more efficient existing 777, and the even more efficient 787, coming years before the promised but still uncertain rival A 350XWB.

Hat tip: Airliners.net

Posted at 01:24 PM | Email | | Share Share
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