Bernstein sees 'positive' risk of A350-800 cancellation

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Bernstein Research, in a 1 July report on EADS focusing on Airbus, sees a risk of cancellation of the A350-800 - a move that it views “positively”.

The conclusion comes following the announcement at the Paris Air Show that the -800 will be delayed two years and the A350-1000 by 18 months. Airbus rescheduled the -1000 in order to allow Rolls-Royce to provide a slightly larger engine to enable the aircraft to go another 400nm with an increased payload. But, to Bernstein’s disappointment, the passenger capacity remains the same at 350. Airbus delayed the -800, officials said, to concentrate resources on the A350-900. Forty-two orders for the -800 in the first two years of the original 2014 entry-into-service have switched to the larger -900, but more than 100 orders remain.

Bernstein views the -800 “as the least attractive of the family and believe it is ultimately at risk of cancellation—which we would view positively,” the 1 July report says.

Airbus denies is plans to cancel the -800, which competes with the Boeing 787-9.

“It appears that Airbus is willing to let Boeing have the lower end of the widebody market, while it concentrates on the high end. Boeing, however, is not willing to cede the high end to Airbus.”

The Boeing 787-8 and the morbid 767 compete with the A330-200 for the lower end. The A330-300 competes with the 777-200ER and the A350-900/1000 compete with the 777-200ER and 777-300ER respectively.

The 787-8 has sold more than 500 of the approximately 850 787s ordered to date. Airbus believes the 787 is generally sized too small and seems content to let the A330-200—which is slightly larger than the 787-8—defend this market segment. While the A330-200 will cost more to operate than the 787-8, the larger passenger and cargo capacity will generate more revenue and make the aircraft more profitable, Airbus argues.

Ironically, the same may be said for the 777-300ER vs. the slightly smaller A350-1000. EIS of the -1000 is now slated for 2017. EIS for the -900 has slipped to late 2013 and many—including Bernstein—expect it to slide to 2014, with a mere eight predicted for delivery.

Bernstein projects Airbus and Boeing deliveries through 2015. Boeing dominates the upper middle-twin aisle deliveries with the 777 while Airbus holds a slight lead in the lower twin-aisle markets. The numbers are somewhat skewed because Bernstein doesn’t separate the A330-300 out into the 777 marketplace.

Airbus holds a slight lead in the single-aisle market and the Very Large Aircraft segment. Overall, Boeing regains the market leadership next year as 787 and 747 deliveries finally kick in in earnest, retaining it through 2015, the last year of Bernstein’s current projections.

The A320neo is scheduled to begin delivery in October 2015.