A new premium report from AirInsight says If it was to characterize the A350 program in one word, it would be volatile. “The aircraft has seen highs and lows repeatedly through the program, which continue today,” it said.
The Airbus A350XWB is now in service with Qatar Airways, which just took delivery of its third aircraft. “But despite the relatively smooth introduction into service, compared with A380, 787, and CSeries, deliveries of the aircraft are quite slow since the first aircraft was delivered in December 2014,” said the report.
The third aircraft was delivered to Qatar the week of May 4, reflecting a very slow production ramp-up which is now three aircraft in nearly five months, said AirInsight. “This would certainly seem less than Airbus’ planned production, indicating some teething pains in manufacturing. Airbus plans to deliver 17 A350s this year, or about 2.2 per month between May to December,” said the report. “While the original mid-2013 delivery date pushed back 18 months with program delays, those delays were lower than competitor delays in introducing new technology aircraft.”
Going back to the beginning of the program, the A350 concept began with a rocky start when Steve Udvar-Hazy criticized the original A350 design, which was more akin to today’s A330neo. That began a market reaction that forced Airbus back to the drawing board. That back-to-the-drawing-board exercise evolved into today’s A350XWB.
The subsequent design, with composite construction, was well received in the marketplace and immediately gained orders for the three models proposed, the base A350-900 and the smaller -800 and larger -1000 variants.
Originally a three-aircraft family, the smallest variant, the A350-800, was not selling particularly well, and its economics against the competing Boeing 787 were questioned by industry pundits, said the report. “With some customers seeking to change their -800 orders to the larger -900 model with better seat-mile economics, Airbus has been moving customers from the smallest variant to the larger -900 and -1000 variants, and will likely formally cancel the -800 once all of the existing customers are transitioned to other aircraft,” said the report. “From a peak of 56 orders for the -800, only 16 remain on the books, including 8 for Aeroflot and 8 for Asiana Airlines.”
Given the current geo-political situation, the Aeroflot orders appear to be at risk of deferral, if not cancellation, due to the economic impact of international sanctions, said the report. The Asiana order is likely to be renegotiated and transitioned to one of the larger models, each of which Asiana has ordered, it added.
Emirates cancelled an order for 50+20 A350-1000 aircraft on the day of last year’s Airbus Innovation Days, and appears to have selected the Boeing 777-8X instead, as the aircraft will be slightly larger and have better seat-mile economics. Competitively, the A350-1000 appears to be attractive, but lacks the size of the 777-8 and 777-9. With a wide gap between the A350-1000 and A380-800 – about 175 seats, the question now facing Airbus is whether they should introduce an additional stretched model of the A350 to better compete for the 400 seat market.
The realities of the market are if Airbus does not stretch the A350 further, it will cede a generation of wide-body replacements to the Boeing 777-X and enable its competitor, which has a more balanced line-up in terms of size, to seize control of the 350-450 seat market.