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When to let go? Why Airbus must avoid paying the price for A350 indecision

Airbus’s efforts to devise a strategy to respond to the Boeing 787, and the recent success of the new 777 models, have brought it perilously close to becoming the latest aerospace manufacturer to fall victim to the product development cycle trap.

Since the age of the piston-engined airliner, airframers and engine manufacturers have wrestled with the dilemma of whether to update and enhance a best-selling product or introduce an all-new replacement. As we have recounted on this page many times previously, the industry is littered with casualties who have called it wrong with their development strategy.

Two of the prime candidates are Lockheed, which missed out on the first phase of the jet era as it concentrated on developing its well-established Constellation/Starliner piston airliners, and McDonnell Douglas, which clung to the DC-9/DC-10 airframes for a generation too long and paid the ultimate price. Pratt & Whitney also blew its stranglehold on the small civil jet engine market it held with the JT8D when it ignored the threat posed by the embryonic CFM56 for too long.

But while the dilemma is not new to its rivals, Airbus did not have to concern itself with such worries during the first 25 years of its existence as the manufacturer expanded its product line and set new benchmarks for each market it entered with all-new designs. The arrival of Boeing’s 777 in the early 1990s after the original A330/A340 had been launched gave cause for concern, but it “fixed” that problem – at least for the short term – with the larger, Rolls-Royce Trent 500-powered -500/600 versions.

That the competitiveness of this new A340 family is somewhat lacking following the development of second-generation 777 models – the -200LR/300ER – should have been warning enough that Airbus needed to look carefully at how it responds to new developments from Seattle.

But, burdened with A380 development, the European manufacturer failed to heed that earlier warning when the 787 (or 7E7 as it was then) emerged in 2003. This has resulted in a series of false-start responses from Toulouse that continue to this day.

The new Boeing had come after a series of setbacks at the US manufacturer during a period when it appeared that Airbus could do no wrong. While Airbus was winning market share with its expanded A330 family and signing up a stellar list of A380 launch customers, Boeing could not decide on its response strategy.

This saw several trips down blind alleys – 747 and 767 development studies as well as the now legendary Sonic Cruiser transonic airliner project – until, like a wounded bear, Boeing responded aggressively with an all-new airliner constructed largely from carbonfibre and powered new-generation engines offering significant cost savings.

Airbus initially considered the 7E7 as little more than a “Chinese copy” of its A330 that it could see off with a warmed-up development of its widebody bestseller. It’s that old product development dilemma again – why trash a relatively young design that is still selling well and has so much life left in it?

Three years ago, Airbus’s chief salesman John Leahy was resolute in his belief that the A330 with 7E7-technology engines would suffice. But this was a naïve view that was quickly put straight by key customers like Emirates, and in late 2004 Airbus unveiled its A350 as major derivative of the A330.

Airbus missed an early opportunity to win back ground on its rival. Instead of recognising that it needed a cohesive plan to create an all-new twinjet successor to the A330 and A340, Airbus decided to target the 787 and smaller 777 variants with the A350 family, but continued to beat its “4 engines 4 long haul” drum, proposing yet another A340 revamp.

The A350 has undergone a series of significant revamps as potential customers pushed Airbus to try harder, culminating in some damaging public criticism recently from International Lease Finance chairman Steve Udvar-Hazy.

The result is that Airbus now appears ready to unveil that all-new widebody twinjet family to succeed not only the A330 but also the A340. But given the head start and early success of the Boeing offerings, Airbus must ensure this is not simply a “me-too” long-range twinjet. The aircraft will trail the 787 by at least three years, and Airbus must use this time to wring out every possible technical advantage, or risk paying for that earlier indecision.

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