• News
  • Does Paris A320neo order surge mean some customers risk missing the boat?

Does Paris A320neo order surge mean some customers risk missing the boat?

The order rush for Airbus's A320neo at the Paris air show saw commitments for the re-engined narrowbody soar to over 1,000 units, leaving observers pondering whether some potential customers may have missed the boat for early delivery slots.

Airbus's chief salesman John Leahy was riding high at Le Bourget, as customers almost had to form a queue at the manufacturer's chalet to announce A320neo deals. The highlight of its busy week was Tony Fernandes' raucous signing ceremony, where he announced a record-breaking deal for 200 A320neos.

Powered by either the CFM International Leap-X or Pratt & Whitney PW1000G engine, Airbus claims that the A320neo will deliver 15% lower fuel burn than current A320s.

In total, it signed up 667 Neo commitments at the June air show, taking the total to 1,029 from 19 customers since its launch last December. A quarter of these are from lessors.

"When I went to the board last year to have approval for the A320neo, I promised strong sales for many years," says Airbus chief executive Tom Enders. "But I have to admit, I didn't think it would be such a best-seller only six months after the launch."

Deliveries are slated to begin in late 2015, with production integrated with the current version of the twinjet until at least 2018, although Airbus has said that output of the older models could continue until the early 2020s.

"Now that they have such a real backlog on the A320neo, I suspect Airbus will be incentivised to try to accelerate the transition [from the old version], because of the complexities of running lines with so many different kinds of engine choices," Eddy Pieniazek, global head of consultancy at Ascend, told delegates at July's Flightglobal Aviation Finance Europe conference in London.

However, Phil Seymour, president of consultants IBA, told the conference that Airbus might need to keep production of the older variants running for longer, to protect residual values: "Airbus knows that it may impair residuals on the classic A320s even more severely if they suddenly say they're going all-Neo from 2018.

"There's an element at Airbus that will be saying 'we need to keep this line open and show that the neo isn't the only engine option, and that we're still producing classic A320s for those operators who don't get the economic benefit'."

Leahy says that Neo delivery slots are becoming "tight" and indicates that the first openings are in 2018/2019. However sources say that there may be some earlier positions earmarked for potential deals with strategically important customers, such as American Airlines or Air France.

"I guess Airbus is holding back some slots for strategic purposes," said Pieniazek. "There are some customers out there that they'd like to try and capture."

With so much noise around the A320neo at Paris, pressure mounted on Boeing as it continued to send out confusing signals about its strategy in the single-aisle sector.

The airframer's official line is that it still hasn't decided whether to counter the Neo with a re-engined 737, or develop an all-new design.

Related Content