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Airbus COO Dismisses Order Bubble Concerns, Cites Growth

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Airbus COO Dismisses Order Bubble Concerns, Cites Growth

Airbus COO Dismisses Order Bubble Concerns, Cites Growth
June 11
07:37 2014

TOULOUSE — Airbus COO-Customers John Leahy dismissed those who believe the aviation industry is facing an orders bubble. The comments, among others, were made during the opening remarks of the company’s annual media days.

“Is there a bubble? I don’t think so at all,” said Leahy. “What you’re seeing is developing countries…coming on strong.” Many industry analysts and experts had been questioning whether the recent spate of orders, both Airbus and Boeing pulled down record orders in 2013, have been fueling an orders bubble. Leahy wrote off those concerns, pointing specifically to the growth of developing economies and the general trend of worldwide air traffic doubling every fifteen years as the primary reasons for his dismissal.

Of course Leahy did not miss the opportunity to plug the Airbus line of products to help meet that predicted demand. In particular Leahy said that the industry “has to have more aircraft like the A380”, not only for long-haul but increasingly for dense regional routes such as in South East Asia along with congested and slot restricted airports. He also pointed to the success of the A320neo program, set to launch in 2015, along with the A350-900 vs the 787-10 (spoiler alert, Leahy says the -900 is better than the -10).

While the two companies remain roughly equal in the widebody market, Airbus continues to dominate the single aisle re-engined race. The A320 family, and the neo program in particular, continues to capture the majority of the market, a trend he forsees continuing into the future: “[the A320 family] is selling better, performing better, and we expect to maintain that lead.”

He added that the neo aircraft are likely to become even more popular with changes in capacity and increase cost advantages per seat mile. The A320neo has been expanded to a max of 189 seats, while the A321neo will be expanded to 240 seats in their densest configurations.

Among other interesting comments:
-Leahy remarked that China will become a serious competitor in the next twenty-five years.

-On the A380neo: “At the present time we are not planning to do it, but when your largest customer is encouraging you to study it, we will study it.”

-On the A330neo: It’s an “interesting idea, we go back and forth on it.” Leahy noted that the company was currently weighing the effects of an A330neo on potential A330ceo and A350 sales. He added that a neo launch “may not happen by Farnborough”, saying there was “nothing magical” about the show RE a launch.

-Leahy believes that the A350-900 can go up against the 787-10 effectively, and better. He added that the design remains flexible. -900 has greater range for same capacity as 787-10, or greater cargo capacity and lesser range. He added that they can de-rate the engines to meet any potential needs for less performance.

-Yes, it’s a been a slow year for Airbus’ order book, but Leahy said he thinks we’ll “see some orders at the airshow,” by which he means Farnborough in the UK, coming up in July.

 

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Jeremy Dwyer-Lindgren

Jeremy Dwyer-Lindgren

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