A330neo is a very hot topic…Customers are pushing for this development –most notably Delta (see related post). Number of articles in media and blogosphere also go in this direction (see CIT article post & Leeham news blog).
Now, two main reasons are being presented to go for this development
- #1: Airbus low wide-body production capability in case of no A330neo development
- #2: A330neo qualities vs A350-800: commonality, similar economics
In this article, we discuss reason #1.
Market demand
Airbus & Boeing long-term projections do not differ significantly in 250-350 pax segment.
It would seem that 2013-2032 average demand for
- 250-300 pax segment would be ~120 AC/ year
- 300-350 pax segment would be ~110 AC/ year
In this segment (250-350 pax), Airbus backlog represents ~50% of total.
Airbus production capabilities
In long term, Airbus wide-body capability will be limited to A350.
At present, long-term targets for A350 production rates are ~10 AC/ month i.e. ~120 AC/ year
Therefore, Airbus capabilities will be limited to around 120 A350 per year.
Assumption: Continuing current A330 production (i.e. without any major improvement) is not considered here due to product difference with new generation competitors specially B787
As demands for 250-300 pax, 300-350 pax and 350-400 pax segments seem to be roughly equivalent (projecting recent production rates averages), Airbus production capability in 250-350 pax segment represents roughly 80 A350-800/-900 per year
A330neo needs
If Airbus wants to maintain 50% market share in 250-350 pax segment, it would need to be able to produce 115 AC per year. However, its forecasted long-term capability is 80 AC per year.
Therefore, it would need ~35 extra AC to match demand, thus A330neo!
Conclusion
To maintain ~50% market share in 250-350 pax market in long-term, Airbus needs additional 35 AC/year capability
- This extra capability could come via A330neo production with ~3 AC per month rate (early 2000s rates). In addition, A330neo development would probably be perfect to stop what seems to be painful A350-800 development. Otherwise, it would raise A330neo vs A350-800 canibalization issue.
- Another solution could be to increase A350 production rate to ~13 AC/ month, really a stretch with current production facilities…
Support data
Table 1: market data
|
|
Capacity
|
|
|
250-300 pax
|
300-350 pax
|
Market data
|
Airbus market 2013-2032 |
2438
|
2256
|
Boeing market |
2353
|
2177
|
Average |
2395
|
2217
|
Yearly market |
120
|
111
|
Current Airbus market share |
52%
|
Source
|
Wikipedia, Airbus results presentation
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Table 2: A330neo needs
|
|
250-300 pax
|
300-350 pax
|
Airbus at 50%
|
Airbus yearly market share 50% |
60
|
55
|
Gap between Airbus production capability & market needs at 50% |
20
|
16
|
A330/ A330neo production capability needs |
20
|
16
|
A330/ A330neo monthly production capability needs |
1.7
|
1.3
|
Airbus at 40%
|
Airbus yearly market share 40% |
48
|
44
|
Gap between Airbus production capability & market needs at 40% |
8
|
5
|
A330/ A330neo production capability needs |
8
|
5
|
A330/ A330neo monthly production capability needs |
0.7
|
0.4
|