To neo or not to neo

This first appeared as a Comment in the 25 March edition of Flight International

Airbus has a small-widebody quandary. The -900 and -1000 variants of its A350 are selling well, but the smallest -800 is not.  In fact, its prospects are going backwards as customers up-gauge to bigger aircraft.
This up-sizing partly suits Airbus – the larger A350s will repay with interest Toulouse’s investment, and it has the A380 for those who want the ultimate up-gauge. However, it leaves a yawning gap between the A321neo and A350-900 in the 190- to 300-seat space.
Airbus seems unfazed. At the ISTAT Americas event, it insisted the priority remains marketing the A350 as a family of three, and that the other option for filling that gap – a re-engined A330 – was being ­discussed more in the market than in Toulouse.
That talk, however, is reaching an intensity Airbus cannot brush off, and around the corridors of Blagnac it will be receiving more attention that the manufacturer admits. At ISTAT, two of the most influential players in the leasing market, Steve Udvar-Hazy and CIT, hinted strongly that Airbus will launch an A330neo.
On the surface, giving its top-selling widebody a new lease of life appears a low-risk and low-cost ­option. An A330neo – delivering marked fuel savings – would be attractive to existing A330 operators, and others, unlikely to be enticed by the A350.
The onus would be on the engine to deliver the bulk of these economies. And while the size of the market would mean a single-source powerplant, one of the A330’s current three engine suppliers would almost certainly come forward with an attractive solution.
But stop there. The A330, due partly to delays with the A350 and 787, had a bumper 2013 in terms of ­deliveries and – while orders are tailing off – continues to be in demand. Some Airbus bosses would be happy to let the programme run its course. A bigger dilemma  for Airbus remains what to do with the A350-800. At ISTAT, Udvar-Hazy argued it would not be rational to launch an A330neo alongside the A350-800.
Although Airbus could re-engineer the -800 to ­provide closer to 300 seats, that would be pricey, delay entry into service and not address the problem of what to do in the 200-plus-seat segment. A likelier but humiliating option would be to scrap the -800 altogether.
One luxury Airbus does not have is time. As CIT points out, delaying a decision beyond this summer could mean the window of opportunity will start to close. Bet on Farnborough for clarification – one way or the other.

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