Airbus A350 XWB puts pressure on Boeing 777

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The A350’s recent order coup at Emirates has left US rival Boeing with much to think about in the 300/350-seat range

At the Dubai air show earlier this month the A350 XWB halted the Boeing 787’s inexorable advance through Airbus’s widebody customers when Emirates chose the new Airbus instead of its US rival to replace its huge fleet of A330/A340s and 777 Classics.

The Dubai flag carrier is the highest-profile scalp for the XWB since it was launched a year ago. The order comprises 70 firm orders for the XWB – 50 -900s and 20 -1000s, plus 50 options, with deliveries beginning in 2014. The twinjets will replace 29 A330-200s, eight A340-300s, nine 777-200/200ERs and 12 777-300s.

The selection of the XWB came after a three-year evaluation by Emirates of potential replacements for its older widebodies. The airline was a driving force behind the 787-10, following its early rejections of the 787-8 and -9 as being too small for its requirements. Emirates Airline president Tim Clark was one the first potential customers to call for an aircraft incorporating the 787’s step-change technology, but sized to replace the 777.

While Boeing reluctantly looked at a 787 “double-stretch” – the proposed 300-seat 787-10, after initial concerns about diluting its own market for the 777 – Airbus knew it had nothing to lose. After aborting A350 Mk1, the airframer galloped to Emirates’ aid with the XWB – a single family of aircraft that effectively bridges the 787 and 777 markets.

But developing such an aircraft is no easy task, as it requires the creation of a single wing and powerplant that can work optimally on both a 280-seat aircraft and a 350-seater. Inevitably, with the largest and most challenging XWB variant, the -1000, being the last to enter service, it is the least defined. This lack of definition was partly why British Airways chose to defer the “big twin” component of its refleeting deal until early 2009, to enable Airbus – and Boeing – to get their heads around exactly what they will be offering in the 350-seat category.

For Boeing, this is also proving a challenge. The 777-300ER has set a new benchmark in its category with its impressive combination of range and efficiency. With 777-200LR/300ER orders approaching 350 aircraft, the programme is well on the way to the 450-500 sales over 20 years forecast by Boeing and General Electric when they teamed up to develop the aircraft seven years ago – and it has all but destroyed the competition, with sales of the A340-600 virtually drying up.

But Boeing now finds itself where Airbus was five years ago with the A330 – under pressure to firm up a succession plan for an aircraft that is selling well but is under long-range threat from a new-technology rival. The A350-1000 is threatening to do to the 777-300ER what the 787 did to the A330.

“Boeing clearly needs to move ahead fast on new product development in the 300/350-seat range,” says Teal Group analyst Richard Aboulafia. “The A350-900 is nosing ahead to replace the fading 777-200ER. Worse, the A350-1000 could start to displace the all-important 777-300ER. Boeing may have won the 240/290-seat battle, but it’s in danger of falling behind in the equally important 300/350-seat segment.”

Influential customers Emirates and International Lease Finance have made it known that they want to see something new from Boeing in the -300ER’s category, be it an updated “777X” or an all-new design – the so-called “Yellowstone 3” 747/777 successor project.

While Clark does not rule out revisiting the 787 as and when Boeing decides what it is doing with the -10 variant, he says the airline’s focus is on a “new” 777-300ER: “We are pushing Boeing to produce a new -300ER, which is the same size and so on, but incorporates 787 design and technology. It would be a world beater.”

Clark has hedged his bets by ordering 20 A350-1000s as part of his XWB mega-deal. There are 50 options that could be exercised, but he is waiting to see what Boeing does to replace the -300ER.

The US airframer concedes that it is looking at ways to enhance the 777, but has given little away publicly so far about what it is examining. One observer wonders whether Boeing may have lost its appetite for a new -300ER in the near term because of the headaches it is suffering trying to get the
787 flight-test programme off the ground.

Having ordered/leased 71 777-300ERs (plus 10 -200LRs and eight 777Fs), Emirates’ Clark is one of the Boeing big twin’s most staunch supporters. He originally planned to use the high-gross-weight version of the A340-600 to underpin Emirates’ long-haul expansion, but was so impressed by how well the -300ER performed once in service that he cancelled the Airbus order and expanded his 777 commitment.

But Clark is already firming up the airline’s long-haul fleet plan for 2015 and beyond, and it will not have escaped the US airframer’s notice that it now includes 120 A350s and not one next-generation Boeing.