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Analysis: Airbus Launches Lower Weight A330 For Regional Operations

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Analysis: Airbus Launches Lower Weight A330 For Regional Operations

Analysis: Airbus Launches Lower Weight A330 For Regional Operations
September 25
14:18 2013

MIAMI — Earlier today at the Aviation Expo China (Beijing Air Show), European original equipment manufacturer (OEM) Airbus announced the launch of a regional version of its popular Airbus A330-300 aircraft. The new lower-weight A330-300 will be optimized for domestic and regional routes in high growth markets with space or slot constrained airports. The announcement was made in Beijing by Fabrice Bregier, President and CEO of Airbus, who said:

The new lower weight A330-300 variant specially designed for regional and domestic use is Airbus’ solution for markets with large populations and fast growing, concentrated air traffic flows. Operators of the new A330-300 variant will benefit from a proven, mature and reliable aircraft that brings relief to limited airspace, airport congestion and pilot shortage.

Airchive first broke the news of a regional version of the A330’s regional version back in July. The aircraft will be certified with a maximum takeoff weight (MTOW) around 40 metric tons lower than the current 242 ton MTOW for the standard A330-300. Customers will be allowed to choose an individual MTOW for their aircraft, ranging from slightly less than 200 tons to 206.207 tons. The A330-300’s General Electric CF6-80E1, Pratt & Whitney PW4000, and Rolls-Royce Trent 700 will be de-rated for regional operations. Currently, these engines provide between 70,000 and 72,000 pound-feet of thrust. The de-rated engines will feature somewhere between 64,000 and 68,000 pound-feet of thrust.

The current A330-300 has a stated range of 6,100 nautical miles (nm), but the lower weight variant will be optimized to carry 400 passengers on routes up to 3,000 nm. Airbus claims that per-seat costs for the regional A330-300 will be 15% lower than existing A330-300s, which when combined with discount pricing, could bring the regional A330-300 to near cost parity with rival Boeing’s 787 on shorter haul routes.

The A330-300 regional will also receive an upgraded cockpit that will benefit from technologies introduced on the A350 and A380 programs, including dual head-up display and the latest navigational systems. Cabin technology will also be updated to take into account the latest advancements in seating (such as slim-line seats) and inflight entertainment and connectivity (IFEC).

The new A330-300 regional will save money for airlines in several ways. Much of the 15% cost improvement is driven by the nearly 33% increase in seats from today’s standard seating of around 300 passengers in a 2-class configuration, but the A330-300 regional will be more fuel efficient due to its lower weight (airlines will be able to load less fuel before hitting MTOW; ergo the lower range). Since the performance and specifications of the aircraft are less than that of the standard A330-300, the purchase price will also be lower, helping airlines save on finance charges. Airport charges are primarily charged based on weight, so the lower MTOW will reduce these costs as well. De-rated engines are also cheaper to maintain.

The A330-300 regional will be certified for more cycles (flights) but fewer hours than the standard A330-300, which will require a new maintenance program for airlines operating the type. Essentially, the changes in certification will allow airlines to operate more flights (albeit for less hours) between mandatory maintenance overhauls.

Airbus has set a timeline of late 2015 or early 2016 for the first delivery of the A330 regional according to Eric Chen, president of Airbus China. While this seems like a long timeline for what amounts to a change in certification, Airbus has to undergo a rigorous verification of the safety performance with all relevant certification authorities such as the European Aviation Safety Agency (EASA) or the Federal Aviation Administration (FAA). Airbus will also have to produce new safety and training manuals for the aircraft. For example, the A330 regional will require a new flight crew operations manual (FCOM). All of these regulatory activities will take time; hence the EIS in 2015/16.

The A330-300 regional is not the first widebody to be offered with de-rated engines and a lower MTOW; for years, Singapore Airlines has flown a subfleet of de-rated Boeing 777-200ERs on regional flights within Asia. Customers will be allowed to change the certification of the regional A330-300 back to that of the full 242 ton MTOW A330-300, but will be required to bear the cost of doing so. Singapore Airlines actually did just that with its regional 777-200ERs, certifying the aircraft back up to their full long haul capabilities as the airline built up a dedicated fleet of A330-300s for its Asian operations.

The new A330-300 regional appears targeted towards Asian carriers, in particular Chinese ones. Airbus and Boeing both have been known to announce new products or product enhancements at airshows in the region of key customers (Boeing, for example, is likely to launch its 777X program at the Dubai Air Show later this year as Emirates is expected to be the type’s largest customer), and Bregier hinted at the fact that Chinese carriers are expected to be the biggest purchasers of the variant:

This [the A330 regional] is what is requested by the Chinese authorities and Chinese airlines

The A330-300 is already the most efficient aircraft for the Asian market today, though airlines use a hodge-podge mix of nearly every widebody aircraft in their fleets on key intra-Asian routes for utilization purposes. However, with the new generation of widebody twins, namely the A350XWB and 787 coming online, Airbus stood to lose out on a significant share of customers in the region. In particular, the recently-launched 787-10 seemed to be a natural replacement for the A330 regional on intra-Asian routes, but now Airbus should be able to retain at least a 35% share in the segment until it launches its own successor to the A330 after 2022.

China is an apt market for the A330-300 regional due to its rapidly growing air travel demand, and more importantly rapidly growing congestion at major Chinese airports. Delays are rampant at major Chinese airports like Beijing Capital and Guangzhou-Baiyu – Chinese airports routinely rank at the bottom of global airport-wise on time performance rankings from sources such as Flightstats.com. International airlines struggle to find suitable slot timings at Beijing Capital, and more generally, the explosive growth of Chinese cities has led to increased space constraints at Chinese airports. Chinese facilities like Kunming, Chengdu, and Xian are all getting massive new terminal buildings, but new runways have not been added at the same pace.

Amongst major Chinese airports, Guangzhou Baiyun might have space for one more parallel runway, but it is otherwise somewhat constrained. Beijing Capital may have the world’s largest terminal building, but it has no space for additional parallel runways. Chengdu might have space to the southwest of its airfield for a third parallel runway, but it would be a project of significant engineering complexity. Shanghai Hongqiao (the primary Shanghai domestic airport) is again completely surrounded by the city, and only Shanghai Pudong has unfettered space for runway expansion.

So it would make sense for Chinese carriers to use the A330-300 regional (and other widebody aircraft) on domestic operations to help relieve some of this congestion. Several Chinese domestic city pairs are amongst the busiest in the world (in particular the air route between Beijing and Shanghai) and the promised stabilization of demand with the advent of inter-city high speed rail in China has not materialized, thanks in part to a series of high profile and deadly high speed rail accidents over the past two years.

Other parts of Asia are prime candidates for the A330-300 regional; Hong Kong based Cathay Pacific (and/or regional subsidiary Dragonair) might look to purchase the type for Asian operations, and pretty much any major Asian carrier can be added to the list, save perhaps Singapore Airlines, who has already ordered 30 787-10s.

The Middle Eastern Big Three carriers plus Turkish Airlines (MEB3 + 1) could also be an underrated source of demand for regional widebodies in coming years. These carriers (excluding Emirates) operate a ton of short haul narrowbody routes to the Middle East, Africa, and South Asia that are right in the A330-300 regional’s sweet spot under 2,500 nm. Keep in mind that the Middle Eastern hubs are highly concentrated geographically, which will make for constrained air space and potential delays throughout the region. Turkish Airlines’ primary hub at Istanbul Ataturk is already space constrained as well, so it will be interesting to see whether any of the major Middle Eastern carriers select the A330-300 regional. Airbus expects the first orders for the A330-300 regional to be formally placed within the next 6-12 months.

The A330-300 regional is just another example of Airbus’ ability to successfully compete with Boeing’s 787 program. When the 787 was announced in the early 2000s, many speculated that its entry into service (EIS) would be the death knell for the A330 program. But thanks to several delays and hiccups in the 787 program, the A330 has sold extremely well. Since 2007, when the 787 entered production, Airbus has sold 561 A330s, representing more than 40% of the program’s total order-book.

And the timing of the announcement makes sense, as Boeing is pre-occupied with getting the 787-8 program up to spec, ensuring that the 787-9 has its EIS on time and on spec, and launching the 787-10 and 777X. Boeing actually had a short range variant of the 787, the 787-3, lined up for this market segment, but it was delayed indefinitely in 2008, and cancelled in December 2010, after winning orders from just two customers; Japan Airlines and All Nippon Airways. And who could blame Boeing at the time? China was just coming up on the tail end of its enormous airport building spree, and even though the demand growth was already known, no one could have predicted the degree to which airport congestion has ramped up in Chinese airports.

It’s also interesting to note just how heavily Airbus stressed the word reliability in its communication about the A330-300 regional. The 787 is struggling with reliability; dispatch reliability is down at 98% (the target range for most aircraft is above 99.4%), and operators such as Norwegian Air Shuttle are unhappy with the adverse effect on operations. The A330 is a mature and proven platform, and as Boeing continues to grapple with the 787s issues, Airbus might be able to win customers for shorter haul routes, where poor dispatch reliability has a more significant impact (e.g. a one hour delay is more harmful on a 3 hour flight than on a 7 hour one).

Airbus has taken an intermediate step with the A330-300 regional that pretty much preserves the status quo; the duopoly between Airbus and Boeing. It will be interesting to see how the variant holds up as the 787 program matures over time.

 

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A Global Review of Commercial Flight since 1994: the leading Commercial Aviation publication in North America and 35 nations worldwide. Based in Miami, Florida.

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