Airbus looks to China to release pent-up A330 demand

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Airbus expects demand for its A330 widebody twinjet family to pick up again despite having managed to add only eight aircraft to the type's firm order backlog during the first half of 2013.

Production is currently running at a record rate of 10 aircraft per month after sales of 88, 99 and 80 A330 models in 2010, 2011 and 2012 respectively, leaving the firm backlog at 260 aircraft at the end of June.

Airbus chief operating officer for customers John Leahy points to Europe's Emissions Trading System (ETS) as a continuing headache, with Chinese opposition to the scheme holding up order approvals. Leasing companies are, in turn, reluctant to commit to orders while unsure of being able to place their aircraft with Chinese carriers, he adds.

"We've got a lot of campaigns. On the A330 right now my biggest issue remains China, where there's a lot of demand but they've all gotten the word that until this ETS issue has been resolved they can talk to us all they want, but the government's not going to approve any orders," he says.

"We have 45 [aircraft] in backlog there - 18 got approved but not the whole amount. Airlines can see that so they're talking to us about orders but they keep looking to Beijing to see when they're going to get approved. You can get a full circle on that because then you have lessors who would like to buy an aircraft to lease it into China, but if they can't get approval from the Chinese for the lease then they're hesitant."

Given the Airbus view that demand for the A330 family remains fundamentally strong, Leahy says the manufacturer is committed to maintaining the 10-per-month production rate through 2015, adding that there is "no question" the type will remain in production "beyond 2020".

Although the new technology engines equipping the rival Boeing 787 provide roughly 10% lower fuel burn, Leahy argues the A330 remains competitive thanks to its "30% lower capital costs, wider seats and better reliability".

He says: "Aircraft get phased out when something comes in that can do more. I've got the same range as a 787-8, the same number of passengers for whatever configuration you want to put in, and I've got 18in seats while they've got 16.9in or 16.8in [at nine-abreast].

"I've got 99%-plus dispatch reliability but they've probably got 80-something percent. I've got lower engine maintenance cost but higher fuel burn probably, by about 10% or so, but I've got a capital cost that's probably $300,000 a month less than them. Put all that into your Excel spreadsheet and it says the A330 has the lowest seat-mile costs."