Why The Airbus A350 Was The Make It Or Break It Aircraft For Airbus
Why The Airbus A350 Was The Make It Or Break It Aircraft For Airbus
Exactly 6 years ago, on June 14th, 2013, the Airbus A350 made its first flight.
On that day, everyone at Airbus was generally anxious – the Airbus A350 will either lift the company up or, if unsuccessful, would spiral Airbus into a slow failure.
At the beginning of the day, the workers at Toulouse watching the first Airbus A350 flight live and the people at other Airbus manufacturing sites watching live streams were nervously waiting for the lift-off of the A350.
At the end of the day, a collective sigh of relief could probably be heard all over Europe.
But why? Why was the Airbus A350 so important to the company?
In short, wide-body aircraft.
On a longer note, let’s try to understand the at-the-time situation at Airbus, the wide-body market and how did it all turn out, 6 years later.
The Airbus A350 similarities with the Boeing 737 MAX
Ironically, just like Boeing had a huge headache with the Airbus A320neo in 2011, so did Airbus with the Boeing 787. Initially, Airbus thought that the Boeing 787 Dreamliner would go head-to-head with the Airbus A330, but as time went on, Airbus realized that they needed a response to the Dreamliner.
In addition, Airbus was already investing a lot of money into the Airbus A380, as Airbus saw a gap in the very large aircraft market. The Airbus A380 recorded its first test flight in 2005. A year earlier, in a private meeting with various airlines, Airbus CEO Noël Forgeard announced a new model that did not have a name at the time.
The new model was supposed to complement the existing A330. A new aircraft would be dubbed the A330-200 Lite and promise an increased range – the fuselage would stay the same, meaning no extra passengers would be seated on the aircraft. But the 787 promised to do everything better than the A330 Lite – more range, more passengers and most importantly, it was more economical due to the new engines and materials used on the frame.
Anyhow, airlines initially were not very keen – Airbus received limited attention to its new project, as customers wanted something new and better than the Boeing 787 or the Airbus A330. If Airbus wanted to beat Boeing in the twin-engine long-haul aircraft market, it would need something revolutionary to sway airlines from ordering the Dreamliner.
And an A330 Lite was not the solution.
Airbus was back to the drawing board under a difficult time – the A380 had its own fair share of production issues and the aviation sector was facing a downturn. But Airbus had to do something, as Boeing was dominating the industry at the time.
Drawing the wide-body market
In the late '90s to early 2000s when Airbus announced the A350 for the first time in 2004, the commercial aviation looked quite different from what it is today.
Boeing was clearly ahead of Airbus, as it had several wide-body jets out at the time – 747, 767 and the 777.
Meanwhile, Airbus had the A300, A310, A330 and the A340.
In addition, you had the tri-jet wide-bodies at the time – the DC-10 and the Lockheed L-1011 TriStar.
But the tri-jets were nearing their expiration date and Boeing absorbed McDonnell Douglas, including all of their aircraft, as McDonnell Douglas was heavily struggling with the repercussions from their decision to release the MD-11 with three engines. At a time when everyone in the aviation industry started to tilt towards twin-engine configurations, someone had to be the stubborn guy, right?
The Queen Of The Skies had free reign, as the A380 would only make its debut in 2007 and the Boeing 767 safely handled Airbus‘ competition of the A300 and the A310.
The Airbus A330 and the Boeing 777 are fairly similar in size and passenger capacity, with the 777 having the slight advantage in both categories. However, the Airbus A330 had more range (except on the 777‘s ER and LR versions) and was much cheaper to purchase back in those days.
Nevertheless, the two jets had found their comfortable place under the sun. They are both getting updated with the A330neo already flying commercially since last December with TAP Portugal, while the new 777X is set to make its commercial debut in the summer of 2020. Engine issues might delay that date, as GE is experiencing problems with the new GE9X engine.
While McDonnell Douglas managed to shut their coffin with the final nail called the MD-11, Airbus made the same mistake with the A340. Fortunately, the mistake did not cost them the company.
Simply put, the A340 shared a lot of the same parts with the A330, reducing the R&D and production costs for the European conglomerate.
But in the late 1980s, when tri-jets like the L-1011 became obsolete due to ETOPS rules when twin-engine aircraft like the Airbus A300 or the Boeing 767 could cross oceans and fly between North America and Europe.
Great news followed in 1989 when American Airlines crossed the Pacific Ocean on a validation flight from Dallas to Hawaii with a Boeing 767-300 ER. The FAA granted American Airlines their 180-minute ETOPS certificate and the doors to twin engines operating long-haul routes, previously unavailable to them, opened up.
In short, ETOPS was a rule for twin-engine aircraft in order to guarantee their safety. On a commercial flight, an aircraft with two engines could not fly a route that did not have an airport within a 60-minute flight distance to divert to. Aviation authorities increased the time period for diversions, which resulted in the 1989 breakthrough for airplanes with two engines.
But two years after the 1989 ETOPS extension, Airbus introduced a new aircraft – the A340.
With four engines.
Meanwhile, Boeing officially introduced the 777 in 1989 and the American manufacturer began taking orders from airlines for their newest wide-body.
At the time, the future was clear – Boeing had seen the slowing orders for the 747 and the fact that airline executives did not want new trijets.
Somehow, Airbus missed the memo.
While the A330 became one of the most successful aircraft of the Airbus range, the A340 did not. In total, airlines ordered only 377 Airbus A340s.
In contrast, airlines already ordered 230 Airbus A330neos, according to Airbus’ order and deliveries files up to May 2019.
On the other side of the competition, airlines have ordered 2033 Boeing 777s, with 217 of them being Freighters.
Importance of the Airbus A350
Looking at the numbers alone, the message is clear – the Airbus A340 was not successful. While it might have been a record-breaker at the time for performance, airlines were not very keen on the project and when fuel prices soared, so did the operational costs of the airliner. In order to avoid making a loss each flight, carriers placed the quad-engine aircraft on a limited number of routes or tried to sell them.
But Airbus had a saving grace – the A340 shared a lot of the same parts with the A330. Thus, the company saved itself from being riddled with huge debts.
Nevertheless, we can outline two main reasons for the A350:
Firstly, Boeing announced the 787 that Airbus had no answer for;
Secondly, Airbus still had a gap left in the market that the A340 failed to fill.
Looking in hindsight, if Airbus would have decided against the decision to design the A350, it would lose a total of 893 orders it currently has for the aircraft. Potentially, the market of ultra-long-haul jets is at 2333 aircraft, combining both the 787 and the A350 orders.
Essentially, if Airbus still wanted to have a say in the big wide-body market, the A350 was a must.
Orders are slowly picking up after airlines order very big numbers of the A350 in 2013, 2008 and 2007. Apart those years, airline orders were scarce and at the lowest point, carriers only ordered 10 Airbus A350’s in 2011.
But more airlines are looking into the A350.
In the grand scheme of things, a BBC article published in 2013 estimates the development costs to be around € 11 billion. At the 2009 Paris Air Show, Tom Enders, who recently retired from the position of CEO at Airbus, has also indicated the cost to be €11 billion. In a press release discussing the financial results of 2018, Airbus has noted that the company plans to break-even on the A350 program in 2019.
As production increases, so does the general profit of the program. According to several sources, Airbus currently produces 10 A350’s a month. The European manufacturer achieved this target rate at the end of 2018.
As a result, Airbus has its hands full with the production of the A350 – a happy change from the dry sea of the A340 orders. So, essentially Airbus achieved one of its goals – it replaced the sub-par sales performance of the A340 and the program looks like it has a bright future ahead of it.
What about providing an answer to the Boeing 787 Dreamliner?
The Airbus A350 model range, when compared to the 787 range has the bigger range (including ULR flights), can seat more passengers and has more cargo capacity.
However, the Boeing 787 is significantly cheaper. Although aircraft manufacturers publish base prices, the real prices airlines pay for aircraft are kept in the dark between the two parties. Nevertheless, they can still indicate that the Airbus A350 is much more expensive.
For example, when comparing the A350-1000 and the 787-10, the latter is $28 million cheaper. The same story repeats itself when comparing the A350-900 and the 787-9, as both manufacturers list the price to be at $317.4 million and $292.5 million respectively.
In reality, airlines will pay much less for the two aircraft. It all depends on how much discount both manufacturers can provide. Considering that the Dreamliner has been in production for 3 more years, Boeing has a lot more flexibility regarding the price.
Nevertheless, Airbus has provided excellent competition for the 787 and has regained ground in the industry.
Future of the A350
With Airbus’ response to the 787, Boeing has realized they have to come up with an answer of their own – the 777X family.
With revolutionary wing-tips and an engine that is as wide as the 737, Boeing promises something that airlines are craving for – even more efficiency. According to Boeing, when comparing the 777X and the Airbus A350, the 777X promises 10% lower operating costs with even more range than Airbus’ aircraft.
While for now, Airbus has enough orders to make a profit in the near future, the next decade in the battle for the best ultra-long-haul jet will be spicy.
Airbus has teased that they plan to stretch the A350 to compete with the 777X. However, Airbus‘ own Guillaume Faury was very reluctant to provide a definitive answer regarding the capability upgrade of the A350:
Airbus President Guillaume Faury was *very careful* not to set expectations, or even speak about the heavier #A350-1000 they’re working on to compete with 777X.— Alex Macheras (@AlexInAir) February 15, 2019
He smiled, and side-stepped around it...#aviation pic.twitter.com/IiDNaBxzGt
Until then, we can only speculate what Airbus has in their pockets regarding the future of the A350 program. Even though airlines can debate the decision between the A350 and the 787, the 777X safely brings back Boeing into the dominant position in the long-haul wide-body market.
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