Slightly more than a decade ago, it was Boeing’s turn to make a hard decision. Airbus had launched the A380, so the company weighed up whether to respond with a clean-sheet design or a simpler product revamp.
Boeing decided that the safer bet was to install a new engine and a composite wing on the 747, focus on the air cargo market and hope to pick off a few orders from the European superjumbo.
If Boeing had to make that decision all over again today, a hindsight-empowered executive team might select a third option: walk away, and leave the disappointing A380 market alone to its rival.
Airbus certainly now fears no competitive threat to the A380 in the very large aircraft segment. Instead of attacking the competitor’s product, Boeing’s 777-9X appears designed to strip any remaining demand for the passenger-carrying 747-8 Intercontinental, which – barring a massive swing in fortunes for the air cargo market – may not survive in production beyond 2020.
Airbus’s commercial aircraft executives today remain devoted to the A380 they helped deliver to the market in 2007, saying – despite the aircraft’s slower than expected sales, higher than projected costs and lack of a new generation of carbonfibre-based composites – the type will be re-engined. How the corporate leadership at the company perceives the wisdom of an A380neo programme is less clear.
There are plenty of reasons to think that a business case is feasible. Airlines have shown a bottomless appetite for re-engined aircraft. A 10% improvement in fuel efficiency – provided by a new engine and minor aerodynamic tweaks – appears enough to seal as many as 100 new orders from the A380’s largest customer, Emirates. And if there is a financial risk, it is of little concern to Airbus, because in a re-engining programme, the majority of the development cost is borne by the engine manufacturer. In Rolls-Royce, Airbus has a supplier that seems motivated and eager to accept that risk.
As a near-consensus of market analysts have pointed out, however, that is still not enough to justify launching the programme. In their view, the A380 has demonstrated that the very large aircraft market segment is not large enough to merit another euro of investment.
It will soon be the turn of Airbus leaders to make a fateful decision. With no competitive threat coming from Boeing and no clear sign of demand, doing nothing is the only option they would have no reason to regret after one more decade.
Source: Flight International