Airbus has given its strongest signal yet that it will seek to overturn Boeing’s dominant position in the lucrative long-range passenger jet market by embarking on a major overhaul of its popular A330 aircraft.
In an interview with the Financial Times ahead of this month’s Farnborough air show, Fabrice Brégier, chief executive of Airbus’ passenger jet business, said the probability was “growing every day” that the company would launch an A330 with more fuel-efficient engines.
“If we can find a solution to improve this aircraft I believe it will confirm that we intend to lead the wide-body segment of our market,” he added.
Airbus is finalising a strategy to try to overtake Boeing in the wide-body jet market because, although the two manufacturers sell fewer of these compared to short-range aircraft, they usually secure higher profit margins on the larger models.
Boeing has so far made bolder moves than Airbus in the market for long-range jets with two engines, by building the 787 Dreamliner – which has suffered significant teething troubles but notched up orders for more than 1,000 aircraft – and the 777X, a new version of the US manufacturer’s larger wide-body jet.
Airbus’ initial response to the Dreamliner has been the A350, the European manufacturer’s first new jet in seven years – and, like the 787, this aircraft involves a step change in technology because it is mainly made from a lightweight composite material rather than traditional aluminium, to reduce fuel burn.
The A350 is Fabrice Brégier’s baby – and the single biggest risk at Airbus group’s largest subsidiary, because new aircraft programmes have a recent record of running into large delays and big cost over-runs. However, the chief executive had a “pretty high” level of confidence that the A350 would be delivered to Qatar Airways, Airbus’ first customer, in line with the planned timetable of the fourth quarter of this year
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Mr Brégier is now seeking to strengthen the company’s response to Boeing by also producing a new version of the smaller A330 featuring more fuel-efficient engines – to be made by either Rolls-Royce or General Electric, or both – although no final decisions have been taken.
Airbus has been considering launching the A330 Neo – or new engine option – at the Farnborough air show, but this prospect is fading because the jet revamp appears to be more complex than originally anticipated.
For example, Mr Brégier said Airbus is studying “significant” modification of the A330’s wings, not just to accommodate the new engines – which would be heavier compared to existing ones – but to improve the aircraft’s aerodynamics and therefore help further reduce fuel burn.
However, in contrast to the 777X, which will have composite wings, the A330’s structure would continue to be made from aluminium.
Mr Brégier claimed the A330 Neo would “probably” have “identical” fuel burn to the Boeing aircraft it would compete against – the small and medium-sized versions of the Dreamliner. Boeing rejects this assertion.
He went on to say it may be possible to sell more than 1,000 A330 Neos because the aircraft will be cheaper than the Dreamliner, although analysts are divided on whether this figure is attainable.
Airbus needs to take action to extend the life of the A330, which entered service in 1994, because, although it has sold more than 1,300 aircraft, there are just less than 250 remaining on the books to deliver to customers – about two years’ worth of production.
The A330 programme is profitable, and therefore important to Airbus – particularly because the A350 is expected to be lossmaking until the end of the decade, and the A380 superjumbo is only due to reach break-even next year.
The four-engine A380 has struggled to secure large sales – for example, no US airline has bought the superjumbo – but Mr Brégier insisted there was “no urgency” to put new engines on the aircraft to improve its attractiveness.
Emirates Airline, the largest operator of the A380, would like more fuel-efficient engines for the superjumbo, and Mr Brégier said this change could come after 2020.
But he warned of “one big caveat” – Mr Brégier called on European countries to react to how Boeing and its suppliers had secured tax breaks worth $8.7bn for the 777X programme from Washington state’s politicians.
He said one “one possibility” for this response could be financial support from European governments for a revamped A380 featuring new engines, adding: “I can compete against Boeing and achieve 50 per cent market share on the wide-body aircraft, but I need, for that, a level playing field.”
Mr Brégier strongly defended the company’s strategy in the wide-body market, rejecting suggestions that the company was wrong to seek limited improvements to the A330 rather than build a new aircraft.
It is a similar strategy to the narrow-body market, where Airbus’ has enjoyed success following a decision in 2010 to put new engines on its existing A320 – the company has so far sold more than 2,800 of these jets, well ahead of Boeing’s equivalent.
“If there are opportunities to incrementally improve the performance of our aircraft . . . without huge costs for the group . . . and which correspond to the requirements of our customers, why should we tell them ‘No . . . wait another five, six, seven years, and we’ll come up with a brand new programme?’ ” said Mr Brégier.
Brégier confident his baby will fly on time
To his regret, Fabrice Brégier never got to fly on Concorde, the European aerospace industry’s most famous passenger jet. He was offered the chance to fly on the last supersonic flight by an Air France Concorde, but was unable to make it.
However, the chief executive of Airbus’s passenger jet business can console himself with becoming the first civilian to fly on the company’s new A350 aircraft – he took part in a test flight last August, and even spent some time in the co-pilot’s seat.
The A350 is Mr Brégier’s baby – and the single biggest risk at Airbus group’s largest subsidiary, because new aircraft programmes have a recent record of running into large delays and big cost over-runs.
However, Mr Brégier appears to be on course to win a bet he placed with the Financial Times in 2012 that the A350 would not suffer the same level of delay in entering commercial service as Boeing’s Dreamliner. The 787 was more than three years late when delivered to its first airline customer in 2011, but the A350 is so far only running up to 18 months behind schedule.
Mr Brégier said he had a “pretty high” level of confidence that the A350 would be delivered to Qatar Airways, Airbus’ first customer, in line with the planned timetable of the fourth quarter of this year, adding he intends to celebrate winning his bet with a “very good bottle of Bordeaux”.
Emirates Airline dropped a contract for 70 A350s last month – Airbus’ largest ever order cancellation, worth $16bn at catalogue prices – partly because of concerns about the aircraft’s weight, and therefore its fuel consumption.
Although the protype A350s doing test flights are three tonnes heavier than the specification of the midsized version of the aircraft, Mr Brégier said this would not be an issue with the jets delivered to customers, adding: “We will deliver . . . the performance we guaranteed to our customers.”
Mr Brégier, 52, has enjoyed a good first two years as head of Airbus’s passenger jet business, reporting a 33 per cent increase in underlying earnings in 2013.
He listed his top three priorities as the A350, a planned new version of Airbus A320 narrow-body jet, and fostering a culture inside Airbus that enables “faster” innovation.
Educated at the Ecole Polytechnique and Ecole des Mines, France’s elite technical universities, Mr Brégier is the obvious eventual successor to Tom Enders, Airbus group’s chief executive.
In an interview with the Financial Times ahead of this month’s Farnborough air show, Fabrice Brégier, chief executive of Airbus’ passenger jet business, said the probability was “growing every day” that the company would launch an A330 with more fuel-efficient engines.
“If we can find a solution to improve this aircraft I believe it will confirm that we intend to lead the wide-body segment of our market,” he added.
Airbus is finalising a strategy to try to overtake Boeing in the wide-body jet market because, although the two manufacturers sell fewer of these compared to short-range aircraft, they usually secure higher profit margins on the larger models.
Boeing has so far made bolder moves than Airbus in the market for long-range jets with two engines, by building the 787 Dreamliner – which has suffered significant teething troubles but notched up orders for more than 1,000 aircraft – and the 777X, a new version of the US manufacturer’s larger wide-body jet.
Airbus’ initial response to the Dreamliner has been the A350, the European manufacturer’s first new jet in seven years – and, like the 787, this aircraft involves a step change in technology because it is mainly made from a lightweight composite material rather than traditional aluminium, to reduce fuel burn.
The A350 is Fabrice Brégier’s baby – and the single biggest risk at Airbus group’s largest subsidiary, because new aircraft programmes have a recent record of running into large delays and big cost over-runs. However, the chief executive had a “pretty high” level of confidence that the A350 would be delivered to Qatar Airways, Airbus’ first customer, in line with the planned timetable of the fourth quarter of this year
See below
Mr Brégier is now seeking to strengthen the company’s response to Boeing by also producing a new version of the smaller A330 featuring more fuel-efficient engines – to be made by either Rolls-Royce or General Electric, or both – although no final decisions have been taken.
Airbus has been considering launching the A330 Neo – or new engine option – at the Farnborough air show, but this prospect is fading because the jet revamp appears to be more complex than originally anticipated.
For example, Mr Brégier said Airbus is studying “significant” modification of the A330’s wings, not just to accommodate the new engines – which would be heavier compared to existing ones – but to improve the aircraft’s aerodynamics and therefore help further reduce fuel burn.
However, in contrast to the 777X, which will have composite wings, the A330’s structure would continue to be made from aluminium.
Mr Brégier claimed the A330 Neo would “probably” have “identical” fuel burn to the Boeing aircraft it would compete against – the small and medium-sized versions of the Dreamliner. Boeing rejects this assertion.
He went on to say it may be possible to sell more than 1,000 A330 Neos because the aircraft will be cheaper than the Dreamliner, although analysts are divided on whether this figure is attainable.
Airbus needs to take action to extend the life of the A330, which entered service in 1994, because, although it has sold more than 1,300 aircraft, there are just less than 250 remaining on the books to deliver to customers – about two years’ worth of production.
The A330 programme is profitable, and therefore important to Airbus – particularly because the A350 is expected to be lossmaking until the end of the decade, and the A380 superjumbo is only due to reach break-even next year.
The four-engine A380 has struggled to secure large sales – for example, no US airline has bought the superjumbo – but Mr Brégier insisted there was “no urgency” to put new engines on the aircraft to improve its attractiveness.
Emirates Airline, the largest operator of the A380, would like more fuel-efficient engines for the superjumbo, and Mr Brégier said this change could come after 2020.
But he warned of “one big caveat” – Mr Brégier called on European countries to react to how Boeing and its suppliers had secured tax breaks worth $8.7bn for the 777X programme from Washington state’s politicians.
He said one “one possibility” for this response could be financial support from European governments for a revamped A380 featuring new engines, adding: “I can compete against Boeing and achieve 50 per cent market share on the wide-body aircraft, but I need, for that, a level playing field.”
Mr Brégier strongly defended the company’s strategy in the wide-body market, rejecting suggestions that the company was wrong to seek limited improvements to the A330 rather than build a new aircraft.
It is a similar strategy to the narrow-body market, where Airbus’ has enjoyed success following a decision in 2010 to put new engines on its existing A320 – the company has so far sold more than 2,800 of these jets, well ahead of Boeing’s equivalent.
“If there are opportunities to incrementally improve the performance of our aircraft . . . without huge costs for the group . . . and which correspond to the requirements of our customers, why should we tell them ‘No . . . wait another five, six, seven years, and we’ll come up with a brand new programme?’ ” said Mr Brégier.
Brégier confident his baby will fly on time
To his regret, Fabrice Brégier never got to fly on Concorde, the European aerospace industry’s most famous passenger jet. He was offered the chance to fly on the last supersonic flight by an Air France Concorde, but was unable to make it.
However, the chief executive of Airbus’s passenger jet business can console himself with becoming the first civilian to fly on the company’s new A350 aircraft – he took part in a test flight last August, and even spent some time in the co-pilot’s seat.
The A350 is Mr Brégier’s baby – and the single biggest risk at Airbus group’s largest subsidiary, because new aircraft programmes have a recent record of running into large delays and big cost over-runs.
However, Mr Brégier appears to be on course to win a bet he placed with the Financial Times in 2012 that the A350 would not suffer the same level of delay in entering commercial service as Boeing’s Dreamliner. The 787 was more than three years late when delivered to its first airline customer in 2011, but the A350 is so far only running up to 18 months behind schedule.
Mr Brégier said he had a “pretty high” level of confidence that the A350 would be delivered to Qatar Airways, Airbus’ first customer, in line with the planned timetable of the fourth quarter of this year, adding he intends to celebrate winning his bet with a “very good bottle of Bordeaux”.
Emirates Airline dropped a contract for 70 A350s last month – Airbus’ largest ever order cancellation, worth $16bn at catalogue prices – partly because of concerns about the aircraft’s weight, and therefore its fuel consumption.
Although the protype A350s doing test flights are three tonnes heavier than the specification of the midsized version of the aircraft, Mr Brégier said this would not be an issue with the jets delivered to customers, adding: “We will deliver . . . the performance we guaranteed to our customers.”
Mr Brégier, 52, has enjoyed a good first two years as head of Airbus’s passenger jet business, reporting a 33 per cent increase in underlying earnings in 2013.
He listed his top three priorities as the A350, a planned new version of Airbus A320 narrow-body jet, and fostering a culture inside Airbus that enables “faster” innovation.
Educated at the Ecole Polytechnique and Ecole des Mines, France’s elite technical universities, Mr Brégier is the obvious eventual successor to Tom Enders, Airbus group’s chief executive.
