Airbus Unveils Design for Revamping Jet
Airbus unveiled a redesigned version of its mid-size A350 jetliner Monday, in an ambitious bid by the European plane maker to catch up with U.S. rival Boeing Co.
Airbus, which has been buffeted in recent weeks by production delays and management turnover, announced at the Farnborough International Airshow in Britain that it would cost the company $10 billion to remake the line, or twice what it originally budgeted.
The revamped A350 XWB -- for “extra wide body” -- is expected to compete against Boeing’s 777 and 787 Dreamliner aircraft, which have helped the U.S. company outstrip Airbus in new orders this year. Airbus has led in orders the last five years.
“This is an entirely new design, without compromise and using all the latest technology,” new Airbus Chief Executive Christian Streiff said.
The A350, originally pitched as a direct competitor to the Dreamliner, has had trouble finding an audience. Airbus has landed only 100 firm orders for the plane, well behind the 360 received by Boeing for the Dreamliner.
The Dreamliner, which is slated to enter service in mid-2008, has attracted buyers by offering greatly improved fuel efficiency at a time when jet fuel prices are at record highs. Even the older twin-engined 777 -- in service since 1995 -- was handily outselling rival Airbus’ A340.
The European company took aim at Boeing’s cost advantage Monday, saying the revamped A350 would be 30% more fuel efficient than existing jetliners and 6% more efficient than aircraft currently in development.
However, the first A350 isn’t set to be delivered until 2012, four years behind the Dreamliner.
Given the Dreamliner’s lead, it makes sense for Airbus to pitch the A350 as an alternative to the 777 as well as the 787, said aviation consultant Scott Hamilton of Leeham Co. in Washington.
“By the time the A350 enters service, the 777 will be a 20-year-old design and will be particularly vulnerable to a new competitor,” he said.
It is unclear whether Airbus’ parent company will seek government loans to help finance development of the new A350. Airbus is 80% owned by European Aeronautic Defense & Space Co., a consortium of European companies headquartered in France and Germany.
Government assistance for Airbus and Boeing has been a trade issue between the U.S. and the European Union, and a request for loans for the A350 program could cause further friction, Hamilton said.
In particular, he said, it could hurt EADS’ effort to win a big contract to supply air-refueling tankers to the U.S. Air Force in partnership with Century City-based Northrop Grumman Corp. Chicago-based Boeing is also expected to compete for the tanker contract.
“We welcome competition, provided it is on a level playing field,” Boeing spokesman Peter Conde said.
The new A350 will come in three main configurations: the A350-800, seating 270 passengers; the 900, seating 314; and the 1000, seating 350. The A350-900 will reach customers first. Extended-range and freighter versions are also planned.
News of the revamped A350 program, which had been leaking out for several weeks, comes as Airbus struggles to recover from a string of setbacks.
EADS’ stock plummeted 26% on Friday after Airbus lost a major order to Boeing and announced a second production delay for its new super-jumbo jetliner, the A380. Two weeks ago, Airbus’ two top executives abruptly resigned.
EADS’ New York-traded shares slipped 75 cents to $25.50 on Monday. The stock is unlikely to get much of a boost from the A350 “until you see the airlines actually lining up for the airplane,” Hamilton said.
Also Monday, Boeing issued and then withdrew an announcement that Qatar Airways had placed an order for 20 777s valued at $4.9 billion. Boeing said the order was still on track, although Airbus said it was in the running for the contract.
In addition, Newport Beach-based Aviation Capital Group, a major aircraft leasing firm, said it would buy 14 Next Generation 737-800s from Boeing, worth $987 million at list prices.
*
Times wire services were used in compiling this report.
