Airbus should redesign A350 says ILFC CEO

[rotornut]

ILFC CEO urges Airbus to redesign A350-paper

Wed Mar 29, 2006 9:31 AM ET

NEW YORK, March 29 (Reuters) - The head of U.S.-based aircraft leasing firm ILFC has urged Airbus to redesign its planned A350 midsize widebody plane or risk getting badly beaten by Boeing Co.'s competing 787 Dreamliner, the Seattle Times reported on Wednesday.

Speaking at an industry conference, Steven Udvar-Hazy, chairman, chief executive and founder of International Lease Finance Corp., called on Airbus, the world's leading commercial jet maker, to scrap its plan for the A350, the paper said.

The A350, based on the fuselage of Airbus' existing A330 jet, was developed as a rival to Boeing's hot-selling 787, which makes extensive use of composite materials and will use about 20 percent less fuel than current models.

Udvar-Hazy said Airbus could risk being stuck with a 25 percent market share in the mid-sized widebody segment if it failed to build a brand new fuselage and wing for its next generation plane.

Seconding his comments, the newspaper said, was Henry Hubschman, president of General Electric Co.'s aircraft lessor, the world's largest.

Udvar-Hazy's made the comments even though ILFC, a unit of insurer American International Group, in November agreed to buy 12 A350 planes with options for eight more. GE Commercial Aviation Services has also ordered 10 of the planes.

Boeing last year outsold Airbus in the market for widebody planes, helped by the popularity of the 787, although Airbus still outsold Boeing overall.

Udvar-Hazy warned that a complete redesign would be a tough decision for Airbus, as it would cost $8 billion to $10 billion more than the company currently plans to spend.

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[Dani]

What even some industrial leaders fail to see is that Airbus' design is already as advanced that it only needs partial effort to come to an equal result with a B787. Some may remember that Airbus initial answer to the dreamliner was a A330 with the new B787 engine.

Even strong Boeing enthusiasts will soon realize that 787 and 350 will soon be about the same technological stage (do I have to say bleedles engine?).

The dreamliner will be a great aircraft, but most of its advances show against the aircraft generation its supposed to replace, i.e. 767/757, and not against more modern concept from the other side.

It was a pleasure to stear up the upcoming discussion ;-)

Dani

[JohnDKeller]

Actually, the 2 big leasing firms are quite emphatic about the current program at Airbus......
http://seattletimes.nwsource.com/html/businesstechnology/2002896362_boeing29.html
EXCERPT:
Udvar-Hazy said Airbus should go for an all-new design to replace not only the current A330 twin-engine jets but also the larger four-engine A340s — "a new family of aircraft that will be the backbone of their wide-body midsize product line for the next 20 to 25 years."
Udvar-Hazy and Hubschman, president of GECAS, the aircraft-finance division of General Electric, lead organizations that are quite simply the rival plane makers' most powerful customers.
In the corridor after the conference session he shared with Udvar-Hazy, Hubschman said he thought that some action at Airbus should come within the next three months.
Udvar-Hazy said in the interview that as a leasing company attuned to an airplane as a long-term financial investment, "we want to have long-term residual value in the A350. ... We're not interested in a Band-aid reaction to the 787."
He said Airbus should develop a new family "that incorporates even more of the new technologies the 787 is doing." It should have a larger diameter fuselage to at least match the dimensions of the 787 interior, and a faster, more swept-back wing to give it the 787's speed.
That would be "a nightmare for Boeing," he said.
But for Airbus, it would be a big gamble. "It's going to cost a lot of money and it's going to cost delay," Udvar-Hazy said.
Analysts at the conference said such a move would delay the Airbus program by at least a year. The A350 is already 2-½ or three years behind the 787.
But Udvar-Hazy believes Airbus has little choice. If it doesn't, he said, Boeing will dominate the entire midsize wide-body segment of the market, with its 787 outselling the A350 and the 777 outgunning the A340.
He said sales of the superjumbo A380 — at best "300 or 400 airplanes," he estimated — cannot compensate for missing out in the much larger midsize wide-body market.
Last year, Boeing opened up a big gap in wide-body sales with big wins selling 787s and 777s to airlines including Air Canada, Korean Air, Qantas, Air India and Emirates.
"It's the marketplace that is going to dictate whether they do this or not do this," said Udvar-Hazy. "They have some big sales campaigns against Boeing. If they continue to lose, if Airbus loses two or three more critical campaigns, what choice do they have? They can't be out of this segment of the business.
"Otherwise, what happens to the A340? Do they make one a month or one every two months? Where is that headed, the whole A340 product line, after say 2008?"
Udvar-Hazy said time is not on Airbus' side because Airbus is already spending on the A350 program, and because airlines may get edgy with uncertainty and decide to go for the 787.
"That's a huge financial decision. It can't be delayed very long," said Udvar-Hazy. "If they are going to make a course correction, it's got to happen I think in the next four or five months."
"Time is an enemy," he said. "They've got to tell the market clearly."
By speaking publicly and in front of John Leahy, Udvar-Hazy is also trying to influence Airbus' decision.
"There are forces within Airbus that like the current approach; it's the lowest investment and lowest risk," he said. "And then there are others that are perhaps more visionary. They're saying let's think this through very carefully. There are alternatives."

[crazypilot]

I have no doubt that the A350 will deliver results as promised.

The big problem however is that when they first marketed it as a 'warmed-over A330' seen just as a knee-jerk reaction to 787 - rather than a new plane, any human looking at two products - one being a brand new state-of-the-art futuristic looking thing and the other being basically something that's 10 years old with a few new bits, which would you go for?

Airbus Marketing really need to get out there and turn the perception around which will be pretty tough. As for a complete redesign I think this would be way too risky - Boeing will in the meantime have collected the entire market share for this sector. On the other hand, if Airbus don't get the ball rolling with changing the face of A350, then they will lose the sector anyways.

[Austin_Danger_Powers]

If you compare orders of the B777 and the A330/340/350 you will see, that Boeing has beaten Airbus already.

No one wants the A340-300 anymore (exept Finair:bored: ) also the A340-600 is not the cashcow they expected and the A340-500......no orders.

IMO Airbus will get big trouble in the future. A380 wont create profit pretty soon (maybe never) A340´s time is over and if they really built the A350 the A330 will be also history.

Airbus has to realize that the times of the 4 Holers are gone. With 180min or even higher ETOPS Operations they are senseless.

Oil is getting more and more expensive. Fuelconsumption will be the buying argument No1.

[Taildragger67]

Then again, maybe a band-aid solution - for the next few years - isn't such a bad idea. That is, let the initial excitement re the 787 get over, quietly develop your own new toys, then be ready with the next generation when the first wave of 787s roll off lease. Then, you've let the other side do all the hard yards of in-service testing of things like large-scale composites (possibly lost a few as a result - God forbid) and can walk in having spread your spending over a few more years. A380 development paid off as well and cash-generative.

That would be a reasonable approach re selling to airline customers; I can see where the lessor is coming from, though, as he'll have to then find a home for all those (then) old-tech 350s and first-wave 787s coming back from first lease - hence his residual value comments.

[rotornut]

Airbus A350 design won't be changed-marketing VP
Mon Apr 3, 2006 12:13 PM ET

NEW YORK, April 3 (Reuters) - Airbus, the world's leading commercial aircraft maker, has no plans to change the design of its mid-sized A350 plane despite criticism from key lessors, Marketing Vice President Colin Stuart said on Monday.

U.S. based aircraft leasing firm ILFC warned last week that Airbus ran the risk of getting badly beaten by U.S. rival Boeing Co.'s 787 Dreamliner, an all-new plane which the A350 is being devised to compete with.

But Stuart said there were no plans to change the A350, which is based on the design of the older A330, but incorporates a composite wing and uses the more fuel efficient engines being developed for the 787.

"I would expect to see that as the final design," he told Reuters on the sidelines of a conference, referring to the A350 design criticized by ILFC for failing to incorporate as many new features as the Boeing 787, which uses more lightweight composites.

"I do not expect to see any change there," he added.

Stuart declined to comment on the criticisms by ILFC Chief Executive Steven Udvar-Hazy, which were echoed by another the world's top lessor, GE Commercial Aviation Services.

International Lease Finance Corp. is a unit of insurer American International Group.

Boeing has so far won 343 firm orders for the 787 Dreamliner, while Airbus has obtained 91 for the A350, which began selling about a year later than its Boeing rival.

[rotornut]

Singapore Air pressures Airbus on A350 jet - WSJ
Sun Apr 9, 2006 1:06 AM ET

SINGAPORE, April 9 (Reuters) - Singapore Airlines has become the second key Airbus customer to say that the European company has not done enough to make its planned A350 plane competitive with Boeing Co.'s 787 Dreamliner, the Wall Street Journal said.

The chief executive of Singapore Airlines, which is in the midst of deciding which manufacturer will win a multibillion-dollar order, said he believes that Airbus should have countered Boeing's proposed new fuel-efficient airplane with an all-new airplane of its own, the newspaper reported on its Web site on Saturday.

His comments are adding to increasing pressure on Airbus to return to the drawing board at a time when the manufacturer is already facing delays on its double-decker A380 airplane programme and slumping sales of its four-engine A340.

Chew Choon Seng, chief executive of Singapore Airlines, said in an interview in Zurich that he believes that "having gone to the trouble of designing a new wing, tail, cockpit" and adding advanced new materials, Airbus "should have gone the whole hog and designed a new fuselage."

Singapore Airlines expects in early May to announce a major order for widebody jetliners. Chew's comments carry great weight in the industry because Singapore is a prized customer for both manufacturers.

Airbus introduced the A350 in 2004 as its answer to Boeing's twin-aisle 787 Dreamliner, which has sold out the first three years of production.

Unlike Boeing, which started from a clean sheet, Airbus chose to update its popular A330 widebody, which it thought at the time would be sufficient. Since then, under pressure from airlines, Airbus says it has changed 95 percent of the plane.

Airbus received the first public criticism of its A350 from a major customer late last month during an airline-finance conference in Orlando, Florida.

International Lease Finance Corp. Chairman and Chief Executive Steven Udvar-Hazy said Airbus was "at a crossroads" and would have to decide whether to spend billions or risk ceding leadership in the twin-aisle market to Boeing. (Reporting by Jacqueline Wong, editing by Raju Gopalakrishnan; Reuters Messaging: [email protected] +65 6870 3814)