Enthusiasm for ambitious projects seems to be in short supply in the commercial aircraft industry.
Airbus executives invited more than 150 journalists to Hamburg, Germany for the company’s Innovation Days: an annual event intended to trumpet its latest big ideas. With mid-July’s Farnborough air show around the corner, it seemed the perfect opportunity to set the stage for the launch of a stretched model of the A350-1000, which chief commercial officer for customers John Leahy had discussed positively in early March.
But Airbus instead did the opposite. During a dinner meeting with reporters, Leahy voiced new pessimism about whether a market exists for a third 400-seat airliner to follow Boeing’s 747-8 in production and the 777-9 in development. Chief executive Fabrice Brégier spoke more directly a day later, acknowledging concerns such an aircraft could cannibalise demand for the 350-seat A350-1000 already in development.
That sudden reversal of enthusiasm echoed a similar about-face made by Boeing executives in March. Despite having made a case for suppliers to get behind a so-called Middle of the Market (MoM) project last June, Boeing acknowledged that it was “very far” from closing the business case.
If the stretched “A350-2000” and MoM are eventually dropped from consideration, it would not be the first time a new clean-sheet or major derivative faded from certain-launch to historical footnote: other examples include Boeing’s Sonic Cruiser and a stretched A380-900.
In this case, new trends are forcing a new pragmatism on Airbus and Boeing product strategy. Airlines and lessors have made a deal with their two most important suppliers. In return for customers accepting a market-distorting duopoly, they must deliver products on time with the promised performance and the right price. The customers have done their part, filling a combined backlog with more than 12,000 firm orders. But Airbus and Boeing are struggling to meet their end of the deal, as the ramp-up has exposed the weakest links of a far-flung supply chain, limiting schedules and raising unexpected technical problems.
Airbus and Boeing would be wise to regroup and rally around executing their existing commitments. There will continue to be talk about launching new major variants, such as a 737 Max 10. But it will not be enough to persuade airlines to buy, and manufacturers require projects that don’t cause too much financial or technical disruption. Over the next two to three years, that is likely to become a significant challenge.