Industry analysts are questioning the wisdom of the proposed Airbus A3XX family of very large aircraft, warning that it could introduce excess capacity into the market and might act as a catalyst for financial catastrophe within the industry at large.

During a panel session at the International Air Transport Association's finance summit in New York in April, speakers urged airlines to be disciplined about seat capacity control. Steve Skinner, a partner at the McKinsey & Company consultancy in Georgia warned that the sheer size of the proposed 500-600-seat aircraft could prove too unwieldy for airlines attempting to fine tune capacity and demand. "There is a real danger that capacity will be added in blocks that are too large to be managed," said Skinner.

Skinner added that a "snowball effect" might result if other carriers, that would not otherwise have considered the A3XX, were forced to take the aircraft in order to cope with falling yields and to keep pace with the handful of major airline launch customers.

Les Weal, chief analyst at UK-based Airclaims, appeared also to have concerns. "It's clear now that Airbus will launch the A3XX. But for every two 777s that are sold, that's one less A3XX that's needed; it's small aircraft that the passenger wants. I think the A3XX makes a better case as a freighter, but I see no room for it in the next 10 years."

Robert van der Burg, managing director of KLM Financial Services, added that the A3XX is "very dangerous" because it limits the ability to be flexible. "Any decision to purchase this aircraft will be political," he warned. "The rationale is not there for this aircraft right now."

Source: Airline Business