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Maturity gives Airbus price leverage over NMA: Scherer

Airbus has indicated that leeway on pricing is a strategic option open to the airframer in its effort to curb the competitive threat from Boeing’s proposed New Mid-market Airplane (NMA).

Chief commercial officer Christian Scherer, speaking during the Innovation Days event in Toulouse on 21 May, said Airbus did not believe there was sufficient technological justification to invest in an all-new aircraft.

Airbus is using the combination of the longer-range A321LR and the A330neo to bridge the tricky middle-market sector at which the Boeing NMA is aimed.

“There isn’t a one-solution-fits-all recipe for this,” says Scherer. “What Airbus has is, by far, the most competitive one.”

While he points out that the aircraft are fitted with modernised engines and cabins, he highlights the broader maturity of the A321 and A330 programmes on which the re-engined aircraft are based.

He says this combination of technology and maturity gives Airbus a “pricing flexibility”, giving it an advantage on the capital cost which the NMA would not be able to counter.

“We have a left hook, right hook approach to this middle-market segment,” adds Scherer.

Airbus is still examining ways to stretch the capabilities of the A321neo, particularly to meet requests for additional range – a project loosely dubbed the A321XLR.

But Scherer stresses that there is still strong unmet demand for the existing line.

“I wish I had more of the current ones to sell,” he says. “I wish I had significantly more aircraft to sell of existing versions.

“We’re starved for availability, I’m happy to say.”

Orders for the A321neo – more than 2,300 at the end of April this year – have far exceeded the total orders for its immediate conventional predecessor.

Airbus is still trying to smooth A321neo production but is maintaining its ambitious delivery target of 880-890 aircraft this year, a 10% hike on last year’s output.

Over the first four months of this year Airbus delivered 183 A320-family jets, 52 more than the 131 reached at the same point in 2018.

Forty-four of these deliveries were A321neos.

Executive vice-president for programmes Philippe Mhun says the A321neo is facing the “challenge” of industrialisation as new jigs and tools have been required for the redesigned ‘Airbus Cabin Flex’ fuselage.

He says customers are requiring “more complex” layouts for the type, and that Airbus is having to cope with several heads-of-version – initial examples of new customer configurations – which has added a further drag.

Mhun acknowledges that part of the problem lies in Airbus’s enhancement of range for the A321neo, which means carriers are tailoring its single-aisle layouts to suit long-haul passengers.

“The expectations for longer-range [travel] are different,” he says.

Mhun refers to the inclusion of new cabin fittings and in-flight entertainment, but highlights the particular issues presented by the system installations necessary to support the various features.

Airbus has already committed to nudging monthly single-aisle production up to 63 aircraft, but is still examining the potential risks of higher rates.

Planned rate increases will be split between the Toulouse and Hamburg lines, with output staying constant at the US plant at Mobile and the Chinese line at Tianjin.

“Engine supply is probably the bottleneck today,” says Mhun. “We’re having some discussions with both engine manufacturers as to what can be feasible.”

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