Shortly after Boeing’s 787 twin-aisle jet program was launched in 2004, Airbus proposed an upgrade of its A330 to counter the threat. The concept was rejected as insufficient by leasing guru Steven Udvar-Hazy and other top customers, however, and the manufacturer ultimately moved forward instead with an all-new airplane, the A350.

Last week, Airbus began development of the reengined A330, dubbed the A330neo, essentially killing off one member of the A350 family, the A350-800. And in an ironic twist, it was Udvar-Hazy, now chairman and CEO of Air Lease Corp., who placed the first order for an aircraft whose basic concept he rejected a decade ago.

The unveiling of the A330neo at last week’s Farnborough air show also brings full circle the widebody competition between Airbus and Boeing. The 787 was initially designed to compete in the A330 market. Now Airbus is developing a new version of its legacy widebody twin to take on its challenger. 

The A330neo not only fortifies Airbus’s position in the medium-sized widebody market it also is evidence of the increasing transatlantic split between European and North American aerospace giants. The closer alliances between Boeing and General Electric Aviation, as well as Airbus and Rolls-Royce, are solidifying, and single-engine supplier programs may become the norm rather than the exception.

As widely expected, Airbus launched the A330neo with the Rolls-Royce Trent 7000 engine, a derivative of the Trent 1000-TEN (see page 25). The aircraft is designed to deliver a 14% reduction in fuel burn per seat compared to the current A330. Following a 3.5-year development period, Airbus plans to deliver the first A330-900neo in the fourth quarter of 2017 and the smaller A330-800neo a few months later.

The new A330 family will be made up of the A330-800neo, replacing the A330-200, and the A330-900neo, succeeding the A330-300. “We are able to do it in 3.5 years because we can take an off-the-shelf engine,” Airbus President and CEO Fabrice Bregier notes.

The aircraft’s maximum range will  be 400 nm longer. However, Airbus is arguing that for most long-haul routes, the range capabilities of the Boeing 787—and arguably the A350—are not needed, so the A330neo will be able to cover more than 90% of all missions. “Around 75-80% of all long-haul missions are up to 8 hr.,” Udvar-Hazy says.

In addition to the engines, the aircraft is to incorporate a new winglet, increased wingspan, new engine pylons as well as an upgraded cabin and avionics.

Airbus says the A330-800neo will reach the same fuel burn per seat as the Boeing 787-8, and the A330-900neo will be as efficient as the 787-9. According to John Leahy, chief operating officer for customers, the -800 will have a range of 7,450 nm and seat 252 passengers. Its maximum takeoff weight (MTOW) is unchanged from the latest A330 version (242 tons). The -900 will have an identical MTOW, seat 310 passengers and have a 6,200-nm range. Airbus figures suggest that the -900 range will be 1,300 nm shorter than the 787-9’s, while the -800 will have 400 nm more range than the 787-8.

Of the 14% fuel-burn improvement per seat, 11% is coming from the engine and another 3% is from aerodynamic improvements and an extension of the wing, which will be 3.7 meters (12 ft.) longer than the current 60.3-meter wingspan. An additional 2% in efficiency is gained from using a different cabin layout that will allow airlines to add 6-10 more seats. There are also some penalties to be counteracted: 1% because of increased drag (the fan diameter is increased to 112 from 97 in.) and 2% because of additional weight. The Trent 7000 engine’s bypass ratio is planned to be 10:1.

There will be no changes to the center wing box, but the wing will be extended, twisted and strengthened to handle the 5 tons of additional weight.

As a result of the A330neo launch, Airbus looks set to finally drop the A350-800; orders for the variant were down to 34 before the start of the air show. “I believe all of our customers will either convert to the A350-900 or the A330neo,” Bregier says. “The A330neo is the more efficient solution” compared to the A350-800, he notes.

It will be a challenge for Airbus to transition to the Neo, though. Bregier and Leahy concede that production rates will likely have to come down somewhat from the current 10 aircraft per month, “but I prefer not to go down too far, because that would make it more difficult to get back up again,” Leahy says. The last current-generation A330 is to be built in 2019.

Tom Williams, executive vice president of programs, says the A330neo will have to go down to what he terms a more sustainable production rate of 7-8 aircraft per month for the long term, but Leahy says he has “no problem” with a rate of 10 per month once the transition is completed. He insists that the A330neo is here to stay for the long term. “It will sell very well until Boeing is doing something new,” he says. He argues that the A330-900 will be on par in terms of operating costs with the 787-9 but will be available at 25% lower capital costs.

A330neo Basic Aircraft Data
  A330-800neo A330-900neo
Standard Seating 252 Seats 310 Seats
  (36 business/216 economy) (36 business/274 economy)
Maximum Design Weights Takeoff 242 tons 242 tons
  Landing 186 tons 191 tons
  Zero Fuel 172/176 tons 177/181 tons
Engines Trent 7000 Trent 7000
  (72,000 lb. thrust) (72,000 lb. thrust)
Maximum Fuel Capacity 139,090 liters 139,090 liters
Maximum Passenger Range 7,450 nm 6,200 nm
Source: Airbus

 

Not surprisingly, Boeing Vice Chairman and Commercial Airplanes CEO Ray Conner is openly dismissive of the A330neo. “We know the aircraft really well, and we knew it in 2004 when it came out with a GE engine on it. We know the engine really well because it is the same as we have on the 787. This is the same aircraft Airbus brought forward in 2004, but the airplane is much heavier and the wing was designed in 1980. We will be more efficient, and that’s what the customer is looking for.”

Conner is particularly scathing about Airbus’s statements that the A330-neo’s direct operating costs are on a par with the 787. “The aircraft is 20,000 lb. heavier and has the same engine as we have. It doesn’t have a new wing, and although there are some modifications and improvements, it is basically the same aerodynamics as it has today,” he says. “So the 787-10 is almost 30% better on a per-seat basis compared to the A330-300 today—a new engine isn’t going to get you there.” He does, however, tacitly acknowledge that the A330neo represents something of a force in the market. “I didn’t say it wasn’t a threat,” he adds.

The A330neo puts more pressure on Boeing as it seeks to reduce supplier costs and recoup its investment in the 787. Top executives from Tier 1 suppliers to both Boeing and Airbus tell Aviation Week they estimate Boeing will have to deliver 850-1,000 787s before it starts making money on the jet, which entered service three years late due to technical and production problems.

The selection of the Rolls-Royce engine for the A330neo is the clearest indication yet that the GE-Boeing and Rolls-Airbus duopoly is not only deepening, but becoming a self-fulfilling prophecy. The growing polarization of the leading U.S. and European airframe and engine makers over the Airbus A340-500/600, A350 and Boeing 747-8, 777 and 777X appears to have entered a positive feedback loop where the award of exclusive deals for future widebodies not only will stay within the established team but will become almost impossible to break out from.

With potentially limited sales, both GE and Rolls demanded exclusivity on the A330neo, while Airbus hoped to offer a choice of engines. The airframer and its candidate A330neo customers conducted a two-phase engine selection process, which initially competed the powerplants on a technical level. Both engines remained on a par at that phase but changed during the second phase that focused on financial aspects.

Industry sources indicate that GE was unable to match Rolls’s bid, which heavily leveraged its existing majority share of the current A330 with the Trent 700, as well as its exclusive position on the A350 with the Trent XWB. In the end, the decision for GE not to participate further in the A330neo campaign with a derivative dubbed the GEnx-1A “was mutual,” GE Aviation President David Joyce says. “I’ve got more business than I know what to do with over the next 5-8 years. If it fitted into the portfolio with the right economic value, I might have made a different decision,” he adds.

Joyce disputes the notion that a duopoly exists or is growing, citing GE’s heavy involvement in Airbus mainly through its CFM joint venture with Snecma on the CFM56 and forthcoming Leap programs. “By the end of the year, we might be north of 70% of orders for the A320neo. We cherish the relationship with Airbus.”

Airbus’s Williams notes that “both [engine makers] were clear: they needed to be single-source.” But he says that “there is no strategic dimension to this [engine decision].”

While it may make things more difficult commercially, Williams points out advantages on the industrial side. “The engine affects pylon design, and at the same we time we are squeezing fuel [efficiency] to the absolute limit,” he says. Bad integration could cost 1.25% in fuel efficiency. However, Airbus also needs to be aware of limits in engineering resources and timing. “We would have been pressured into two development teams,” Williams says.

Key Airbus customers support suggestions that Airbus could sell more than 1,000 A330neos by 2030. Alan McArtor, chairman and CEO of Airbus Americas, forecasts sales of 1,500 aircraft, but Boeing officials predict those numbers will be much lower. At the air show here, Airbus concluded deals for 121 of the aircraft. Lessor involvement in the launch customer group indicates that investors believe the A330neo program will be a long-term one. 

Air Lease Corp. became the first customer to sign up for the aircraft, ordering 25 A330-900neos that are to be delivered starting in 2018. “There is a compelling price difference between the A330neo and any other widebody aircraft,” President and Chief Operating Officer John Plueger says. Udvar-Hazy says he does not think “Boeing can close the pricing gap.”

AirAsia X has been a driving force in the airline industry, pushing Airbus for years to go ahead with the A330 reengining. “We have been encouraging Airbus to launch this new version of the A330 for some time now, AirAsia X Co-founder Tony Fernandes says. “We are 100% sure that the A330neo will be quite unbeatable in its size category.”

The airline’s decision is of particular importance to Airbus because it signals the A330neo could become an important player in the emerging long-haul, low-cost sector that more and more carriers are embracing. Following Qan-tas with its Jetstar unit, Lufthansa has announced plans to launch its own long-haul, low-cost affiliate next year based initially on A330s or Boeing 767s.

AirAsia X last year ordered an additional 20 A330-300s last year and now has firm orders for 51. The airline operates 20 aircraft now, including leased units.

Russia’s Transaero became the second airline to commit to the A330neo, signing a letter of intent for 12 aircraft.

Lessors CIT and Avolon ordered 15 A330neos each. “The sweet spot [for the A330neo] is Asia,” says Avolon CEO Domhnal Slattery. He projects that the average range required for widebodies will come down over time, and thinks that the A330neo could take 25-35% of a potential market for 4,000 aircraft in that segment over the next 20 years. Avolon also has ordered the Boeing 787-9 but says it is an aircraft for a different market niche requiring longer ranges.

BOC Aviation CEO Robert Martin, a large A330 customer, says “the time is right [for the A330neo] and it should not be delayed. It should come now.” Traffic flows, particularly in Asia, will require large-capacity aircraft that are optimized for shorter ranges, he says.

Leahy believes most airlines will order the larger variant of the A330neo, but he has not considered dropping the smaller version as Airbus neared the reengining decision. “Most airlines will order the A330-900, but I still want to be in that category,” he says. 

With Joseph C. Anselmo at Farnborough.

 

Photo Gallery See Airbus and Boeing aircraft and other participants in the flying display at this year’s Farnborough air show.
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