Aerospace & Defense
Airbus Considers Sacrificing A350
Chris Noon, 10.05.06, 2:35 PM ET
In a Darwinian twist to the battle between the world's two dominant
makers of commercial aircraft, Airbus may have to sacrifice the
weaker of two upcoming models to get its troubled superjumbo
offering to market.
Thomas Enders, the co-chief executive of European Aeronautic
Defense and Space (other-otc: EADSF - news - people ), Airbus'
corporate parent, told The Financial Times Deutschland that the
company might scrap its planned A350 XWB (extra-wide body)
aircraft--the planned competitor to rival Boeing's (nyse: BA - news
- people ) 787 Dreamliner--as a result of the current crisis at the
aerospace and defense giant.
When asked if EADS had considered halting development of the
aircraft, Enders said, "I can't rule it out." He added that
"nothing can be considered automatic" in the company's difficult
situation.
Enders' pessimism is unsurprising. Airbus can't make any promises
on the A350 program right now, as it has to fix and deliver the
jinxed A380 superjumbo first. Media reports have suggested that
Middle Eastern airline Emirates, frustrated by new delays to the
Airbus A380 program, is close to canceling at least half of its
orders for the aircraft, which can seat 555 to 850 people, and is
discussing with Boeing terms for an initial order of approximately
20 of its 747-8s, meant to carry up to 450 passengers.
Halting development of the 270- to 310-passenger A350 seems like
the wisest course for Airbus, which is reeling from problems
related to the A380. Among these are penalty payments for late
deliveries, credit downgrades, French-German government disputes,
union unrest and a continuing lack of credibility among key major
airlines, who are furious at the cost, inconvenience and arrogance
surrounding this Titanic debacle.
As far as the manufacturing of the A350 goes, Airbus is caught
between a rock and a hard place. It can't outsource the work to a
cheaper development area, such as China, because training and
infrastructure costs would be too high and the time period too
long. To develop the A350 internally, Airbus would need billions of
euros and a steady income stream from A380 deliveries, neither of
which it currently has.
Insiders say the company had been chewing over plans to make the
A350 an all-carbon-fiber aircraft to match the Boeing 787, but that
would involve massive investments in new technology plus a high
degree of risk, neither of which Airbus is in a position to
contemplate right now. Bear in mind that all Airbus' A350 "orders"
are for the current, heavier metal-alloy version of the craft, so
the company runs the risk of losing many of them to airlines that
are not interested in being carbon-fiber guinea pigs.
The end result--even if Airbus were able to build the A350--would
be an aircraft that will fly in 2013 or 2014, half a decade after
Boeing's 787, with room for 210 to 330 people, takes to the skies.
Around that time, both Airbus and Boeing, acutely conscious of the
uncertainty over oil prices, will likely be refocusing on switching
their entire narrow-body lines to carbon-fiber fuselages to save
weight.
In truth, Airbus' plans to redesign its A350 model always had a
whiff of the slapdash about it. In mid-July, Airbus--anxious to
mollify its customers who groused that the original A350 was slow,
thirsty and suffered from poor interior design--added the
designation XWB to its previous A350 proposal, an abbreviation for
"extra wide body." Yet the revamped A350 is a measly five inches
wider than Boeing's competing 787.
It is hard to imagine that airlines and shareholders who had been
massively and expensively inconvenienced by Airbus program
mismanagement on the A350 or A380 over the past two years will be
terribly excited about the promise of five inches of extra cabin
width in an aircraft to be delivered eight years from now.
Besides the widening, the new planes, which will debut sometime
between 2012 and 2014, will use the A380 superjumbo's cockpit and
will feature beefier engines and increased use of composite
materials in the wings and fuselage.
"It could be wise for Airbus to just quietly put the A350 on the
back burner [and] see if they can squeeze a little better
performance out of the 295-passenger A330, in the same way they're
trying to gain a 5% fuel efficiency improvement on the narrow
bodies over the next couple of years, and ride it out," said Doug
McVitie, a former Airbus employee and managing director of the
France-based Arran Aerospace consultancy. "Whichever way they turn,
they have no magic solution, so dropping the program or at least
deferring its launch seems to me to make sense."
http://www.forbes.com/2006/10/05/airbus-eads-boeing-biz-man-cx_cn_1005airbus.html?partner=yahootix
