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JonesNL
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Re: Air France Studies Stretched Airbus "A220-500"

Thu Nov 07, 2019 12:53 pm

PacoMartin wrote:
MavyWavyATR wrote:
That's gonna kill Boeing if Airbus goes through with a -500 stretch.


We used to say that you can never beat a paper tiger. You have a concept airplane and you are talking about it destroying a real airplane.

It is pretty obvious that the A321neo will be a gold mine for more than a decade. It will eventually bring in more money than the A320neo, but the common type rating will ensure that the A320neo will remain very profitable for many years.

As of 30 September 2019 it looks like 2019 will be the first year when the A321neo will place more orders than the A320neo (97 to 38).
IndiGo has placed a firm order for 300 A320neo Family aircraft in October, but it remains to be seen how many are of each type.

Prior to this order IndiGo was already the biggest customer of the A320neo family with 290 A320neo and 150 A321neo orders.

Still the A320 neo has 3,830 -748 = 3,082 unfilled orders.

Looking at MTOW
A220-100 63.05 tonnes,
A220-300 69.85 tonnes,
A319neo 75.5 tonnes,
A320neo 79 tonnes.

An A220-500 will probably disrupt A320neo orders as much or more than it will disrupt B737MAX orders.


Why would Airbus executives try and challenge that golden scenario in the next decade with an A220-500?


Simple: more revenue/profit of the pie. A bit of cannibalization is not bad if end up with a bigger portion of the pie. If the pie is 100 and the current standing is A320 50% and 737 50%. And after the introduction of A225 you have A320 35%, 737 40% and A225 25% you end up with an improvement of 10% or decreasing your only competitor by 10% in the most important segment of the market. I don't think I need explain that 10% is enormous in the NB segment for both A & B.
 
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Re: Air France Studies Stretched Airbus "A220-500"

Thu Nov 07, 2019 12:55 pm

PacoMartin wrote:
It is pretty obvious that the A321neo will be a gold mine for more than a decade. It will eventually bring in more money than the A320neo, but the common type rating will ensure that the A320neo will remain very profitable for many years.


Why would Airbus executives try and challenge that golden scenario in the next decade with an A220-500?


You've answered your own question.

In a world of limited production slots, Airbus would rather sell an A321 than an A320 (as the profit margin is significantly more).
 
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Re: Air France Studies Stretched Airbus "A220-500"

Thu Nov 07, 2019 12:58 pm

Reddevil556 wrote:
JonesNL wrote:
Reddevil556 wrote:
What does the A220-500 offer that the A320 doesn’t?


Better CASM.


Hypothetically since it’s a purely concept at this point..


considering that the A223 reportedly already matches the A320neo on CASM they would need to screw the strech up really, really, really badly to not get better CASM out of it...

VV wrote:
It is very difficult to imagine Airbus would sacrifice the A320neo for A220-500 in AF's fleet.


Since Airbus would have sole control to decide what prices they make on either one, and which production rate each frame has available, there wouldn´t be any sacrificing involved. They can manage that to extract maximum profits from both families and no one would even have a real competitor on the drawing board.

best regards
Thomas
Well, there is prophecy in the bible after all: 2 Timothy 3:1-6
 
Reddevil556
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Re: Air France Studies Stretched Airbus "A220-500"

Thu Nov 07, 2019 1:05 pm

tommy1808 wrote:
Reddevil556 wrote:
JonesNL wrote:

Better CASM.


Hypothetically since it’s a purely concept at this point..


considering that the A223 reportedly already matches the A320neo on CASM they would need to screw the strech up really, really, really badly to not get better CASM out of it...

VV wrote:
It is very difficult to imagine Airbus would sacrifice the A320neo for A220-500 in AF's fleet.


Since Airbus would have sole control to decide what prices they make on either one, and which production rate each frame has available, there wouldn´t be any sacrificing involved. They can manage that to extract maximum profits from both families and no one would even have a real competitor on the drawing board.

best regards
Thomas


That would make sense, but just looking at the backlog of the A320neo and A220-300 I don’t see customers lining up to buy it. CASM is a factor, but not the end all be all.

Airbus isn’t sacrificing its cash cow anytime soon. The 320neo is a great plane and the market has a demand for it for at least another 10 years.
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mjoelnir
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Re: Air France Studies Stretched Airbus "A220-500"

Thu Nov 07, 2019 2:42 pm

The 737 A320 family situation is 45 to 55% and rather nearing 40 to 60, than moving in the other way. The biggest problem for Airbus is not selling A320 family birds, but producing them. Every sale of a A220 is just add on for Airbus and rather comes out of the 737 market share. A220 sales do not seem to diminish A320 family sales.
The only problem for Airbus in regards to the A220-500 is not cannibalizing the A320neo, but when they will have enough capacity in the A220 production to be able to offer it.
 
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767333ER
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Re: Air France Studies Stretched Airbus "A220-500"

Thu Nov 07, 2019 4:01 pm

mjoelnir wrote:
The 737 A320 family situation is 45 to 55% and rather nearing 40 to 60, than moving in the other way. The biggest problem for Airbus is not selling A320 family birds, but producing them. Every sale of a A220 is just add on for Airbus and rather comes out of the 737 market share. A220 sales do not seem to diminish A320 family sales.
The only problem for Airbus in regards to the A220-500 is not cannibalizing the A320neo, but when they will have enough capacity in the A220 production to be able to offer it.

It gets to the point where they start to lose orders to Boeing partly because they do not have the production slots available to meet a customer’s needs in a timely manner. The A320 production line is booked up for years at this point and going forward it will probably be more A321s that get added on. If a customer doesn’t care about commonality and wants an A320 sized plane within a certain timeframe they will end up with the 737-8 because it will be delivered sooner (well who knows with all those undelivered ones) and due to the greater availability of production it may also be cheaper. The A220-500 stands more than a fighting chance if the production capacity is there, which it isn’t yet. Once it is it it will be better than the 737-8 in every way given you don’t need the range of the 737.
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 4:33 am

JonesNL wrote:
Simple: more revenue/profit of the pie. A bit of cannibalization is not bad if end up with a bigger portion of the pie. If the pie is 100 and the current standing is A320 50% and 737 50%. And after the introduction of A225 you have A320 35%, 737 40% and A225 25% you end up with an improvement of 10% or decreasing your only competitor by 10% in the most important segment of the market. I don't think I need explain that 10% is enormous in the NB segment for both A & B.


A bit of cannibalization is not bad if you end up with a bigger portion of the pie.

In general, that is a true statement in business. I am sure that when someone opens a new McDonald's restaurant they have to take into account some cannibalization of business from other McDonald's.

But in this case when the assembly lines are fully occupied building A320neos and A321neos Airbus would be better off preparing for competition from the Russians, Brazilians, Japanese and Russians. The best way to do that would be to increase the production rate and reduce costs associated with the manufacture of the A220-100/300.

Let me correct some numbers with results from Airbus database for Sep 2019

Airbus 2019 (first 9 months)
TOTAL GROSS ORDERS- TOTAL CANCELLATIONS = TOTAL NET ORDERS
102-42=60 A320neo
82-1 =80 : A321neo

IndiGo previous orders were 100 A320ceo, 280 A320neo & 150 A321neo. The split for the latest order of 300 from the neo family has not been announced.
 
SteelChair
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 5:48 am

I have no doubt that the A220-500 will be launched within the next 12 months (mho). The only thing I dont understand is why CSALP isn't moving faster with the production ramp up, now that the orders are increasing.
 
VV
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 8:31 am

SteelChair wrote:
I have no doubt that the A220-500 will be launched within the next 12 months (mho). The only thing I dont understand is why CSALP isn't moving faster with the production ramp up, now that the orders are increasing.


Yes, it is quite intriguing why Airbus Canada Limited Partnership (ACLP) has not been able to significantly improve the production and delivery rate so far.
It is possible it is because the production standard has not been frozen yet, which would be even more intriguing considering the aircraft entered into service in 2016 or three years ago and Airbus formally took over the control of the program on 1 July 2018 or about five hundred days ago.

As for the recent big orders are concerned, it may be just a way to show off, demonstrating how much more efficient the marketing and sales organization is compared to Bombardier's. Once the "startle effect" subdues, perhaps there will be fewer A220 sales on annual basis.

In addition, it is now ACLP's management to decide the strategic orientation of the A220 evolution, even though Airbus holds a majority stake in the partnership.

It is also possible there is a power struggle inside ACLP with one side wanting more budget for development and the other focusing on reducing cost and improving the profitability. Furthermore, perhaps the current ACLP management wants to complete all the features that were initially promised, like 180 minutes ETOPS and take-off and landing above 8,000 ft.
 
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 9:07 am

VV wrote:
SteelChair wrote:
I have no doubt that the A220-500 will be launched within the next 12 months (mho). The only thing I dont understand is why CSALP isn't moving faster with the production ramp up, now that the orders are increasing.


Yes, it is quite intriguing why Airbus Canada Limited Partnership (ACLP) has not been able to significantly improve the production and delivery rate so far.
It is possible it is because the production standard has not been frozen yet, which would be even more intriguing considering the aircraft entered into service in 2016 or three years ago and Airbus formally took over the control of the program on 1 July 2018 or about five hundred days ago.

As for the recent big orders are concerned, it may be just a way to show off, demonstrating how much more efficient the marketing and sales organization is compared to Bombardier's. Once the "startle effect" subdues, perhaps there will be fewer A220 sales on annual basis.

In addition, it is now ACLP's management to decide the strategic orientation of the A220 evolution, even though Airbus holds a majority stake in the partnership.

It is also possible there is a power struggle inside ACLP with one side wanting more budget for development and the other focusing on reducing cost and improving the profitability. Furthermore, perhaps the current ACLP management wants to complete all the features that were initially promised, like 180 minutes ETOPS and take-off and landing above 8,000 ft.


It’s also possible you’re entirely wrong again.
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concordeforever
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 9:08 am

In the Airbus And Boeing 2019 Orders thread Someone83 has posted the following :

87 A320neo and 213 A321neo (both A321neo and A321XLR) IndiGo.

So presume this is official?


PacoMartin wrote:
JonesNL wrote:
Simple: more revenue/profit of the pie. A bit of cannibalization is not bad if end up with a bigger portion of the pie. If the pie is 100 and the current standing is A320 50% and 737 50%. And after the introduction of A225 you have A320 35%, 737 40% and A225 25% you end up with an improvement of 10% or decreasing your only competitor by 10% in the most important segment of the market. I don't think I need explain that 10% is enormous in the NB segment for both A & B.


A bit of cannibalization is not bad if you end up with a bigger portion of the pie.

In general, that is a true statement in business. I am sure that when someone opens a new McDonald's restaurant they have to take into account some cannibalization of business from other McDonald's.

But in this case when the assembly lines are fully occupied building A320neos and A321neos Airbus would be better off preparing for competition from the Russians, Brazilians, Japanese and Russians. The best way to do that would be to increase the production rate and reduce costs associated with the manufacture of the A220-100/300.

Let me correct some numbers with results from Airbus database for Sep 2019

Airbus 2019 (first 9 months)
TOTAL GROSS ORDERS- TOTAL CANCELLATIONS = TOTAL NET ORDERS
102-42=60 A320neo
82-1 =80 : A321neo

IndiGo previous orders were 100 A320ceo, 280 A320neo & 150 A321neo. The split for the latest order of 300 from the neo family has not been announced.
 
astuteman
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 9:24 am

PacoMartin wrote:
Let me correct some numbers with results from Airbus database for Sep 2019

Airbus 2019 (first 9 months)
TOTAL GROSS ORDERS- TOTAL CANCELLATIONS = TOTAL NET ORDERS
102-42=60 A320neo
82-1 =80 : A321neo

IndiGo previous orders were 100 A320ceo, 280 A320neo & 150 A321neo. The split for the latest order of 300 from the neo family has not been announced.


We can of course now correct with the figures from the October database....

Airbus 2019 (first 10 months)
TOTAL GROSS ORDERS- TOTAL CANCELLATIONS = TOTAL NET ORDERS
199 - 42 = 157 x A320neo
383 - 1 = 382 : A321neo

Rgds
 
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 9:56 am

VV wrote:
Yes, it is quite intriguing why Airbus Canada Limited Partnership (ACLP) has not been able to significantly improve the production and delivery rate so far.


It's intriguing if you know nothing about industrial manufacturing of large aircraft. For those who have at least a minimal experience in this industry it's not surprising at all.

You cannot extend a production rate in the twinkling of an eye. Before the Final Assembly Line there is a whole supply chain.
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VV
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 10:56 am

LaunchDetected wrote:
VV wrote:
Yes, it is quite intriguing why Airbus Canada Limited Partnership (ACLP) has not been able to significantly improve the production and delivery rate so far.


It's intriguing if you know nothing about industrial manufacturing of large aircraft. For those who have at least a minimal experience in this industry it's not surprising at all.

You cannot extend a production rate in the twinkling of an eye. Before the Final Assembly Line there is a whole supply chain.


Thanks for the explanation, although I am still extremely intrigued by the Fack the aircraft entered into service in 2016 or slightly three years ago and yet the ramp up has been sluggish since then.

It is also interesting to note that the second launch of the aircraft happened in 2008 or eleven years ago.

If eleven or even three years is a twinkling of an eye the indeed they do not see much and will hit a wall at one point.
 
JonesNL
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 11:32 am

VV wrote:
LaunchDetected wrote:
VV wrote:
Yes, it is quite intriguing why Airbus Canada Limited Partnership (ACLP) has not been able to significantly improve the production and delivery rate so far.


It's intriguing if you know nothing about industrial manufacturing of large aircraft. For those who have at least a minimal experience in this industry it's not surprising at all.

You cannot extend a production rate in the twinkling of an eye. Before the Final Assembly Line there is a whole supply chain.


Thanks for the explanation, although I am still extremely intrigued by the Fack the aircraft entered into service in 2016 or slightly three years ago and yet the ramp up has been sluggish since then.

It is also interesting to note that the second launch of the aircraft happened in 2008 or eleven years ago.

If eleven or even three years is a twinkling of an eye the indeed they do not see much and will hit a wall at one point.


Skewed information. Actual deliveries with yearly improvements behind it:
2016 7
2017 17 140%
2018 34 100%
2019 44 (37 till september) 30%
2020 100+ (projected) 127%

Only 2019 could be considered sluggish with 30%+ which is quite a an accomplishment. A320 production team would kill to get that number...
 
tommy1808
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 11:44 am

JonesNL wrote:
A320 production team would kill to get that number...


i think their plan is +5% in the next 3 years....

However, the A220 has to get beyond 100 per year, but i guess they will 2021..

best regards
Thomas
Well, there is prophecy in the bible after all: 2 Timothy 3:1-6
 
JonesNL
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 12:00 pm

tommy1808 wrote:
JonesNL wrote:
A320 production team would kill to get that number...


i think their plan is +5% in the next 3 years....

However, the A220 has to get beyond 100 per year, but i guess they will 2021..

best regards
Thomas


I was unaware of their plans of +5%. One would guess with the big orders dripping in an higher increase should be warranted.

For now the official plan for the a220 is 168 per year. In January of this year the CEO of ACLP said that the rate of 14p/m would be achievable from mid 2020's. My guess is that they will reach in Q4 2020 earliest, so it might be tight on if they can manage 100 planes next year.
There are even plans for expansion in Mirabel beyond the 168 if the demand is there, as ACLP has a lot of land in Mirabel surrounding the current facilities. https://montrealgazette.com/business/local-business/aerospace/with-a220-output-set-to-climb-airbus-eyes-additional-facility-in-mirabel

I can only imagine that happening when the order books contain more than 1500 orders, which might be possible after the introduction of the a225.
 
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 2:24 pm

Reddevil556 wrote:
But also what would be the sticker price on a 320neo vs 220-500? That could be a huge factor.

PacoMartin wrote:
Why would Airbus executives try and challenge that golden scenario in the next decade with an A220-500?

Interesting points.

The main thing a bigger A220 could solve is making more production slots available for customers who want A225/A320 sized aircraft.

The main issue is these A220 sales will not be as profitable as A320 ones will since A320 manufacturing is happening at a rate of 4x - 6x of A220 and the A320 production facilities and supply chain is far better tuned than is the A220 ones and A320 sells at higher prices whereas A220 has been largely discounted. Also, engineering, testing and certification efforts need to be funded for the stretch and this is not something the other partners are paying for, it must come out of A220 program profit or additional investment from Airbus and partners. Not to mention the issue that Airbus only owns half the A220 program so only keeps half the (eventual?) profits of A220 sales unless they chose to spend the money needed to buy out the partners.

It seems in the short term Airbus's biggest problem is to iron out its A320 family production line. I just read a report that A321ACF deliveries are running at least six months behind schedule, and that Airbus has trimmed projected A320 output by 2%-3% for 2019. One must assume introducing another variant (A321XLR) will make things even more challenging. We also read Airbus is considering using A380 buildings for a new A320 FAL in TLS. ( ref: https://www.reuters.com/article/us-airb ... SKBN1XH1WX )

It seems to me that Airbus will have its hands full in the near future sorting out the A320 strategy not to mention helping A220 ramp up at the same time since A220 now has to fill some large orders it took when the future of the program was in doubt so were deeply discounted.

It seems to me that Airbus can wait before deciding to move forward with A220-500 till ~2021 or so.
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 2:36 pm

JonesNL wrote:
Skewed information. Actual deliveries with yearly improvements behind it:
2016 7
2017 17 140%
2018 34 100%
2019 44 (37 till september) 30%
2020 100+ (projected) 127%

Only 2019 could be considered sluggish with 30%+ which is quite a an accomplishment. A320 production team would kill to get that number...

JonesNL wrote:
For now the official plan for the a220 is 168 per year. In January of this year the CEO of ACLP said that the rate of 14p/m would be achievable from mid 2020's. My guess is that they will reach in Q4 2020 earliest, so it might be tight on if they can manage 100 planes next year.

Interesting info, based on point of comparison with itself.

Main point of comparison going forward will be A320 at ~60/yr and 737 at ~50/yr both with high levels of profit.

As above, Airbus is considering a new TLS line and has bumped China up to 6/mo, so very well could chose to favor A320 family investment with strong profit and total ownership over having to invest in A220 only to share the profit.
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 2:42 pm

Revelation wrote:
JonesNL wrote:
Skewed information. Actual deliveries with yearly improvements behind it:
2016 7
2017 17 140%
2018 34 100%
2019 44 (37 till september) 30%
2020 100+ (projected) 127%

Only 2019 could be considered sluggish with 30%+ which is quite a an accomplishment. A320 production team would kill to get that number...

JonesNL wrote:
For now the official plan for the a220 is 168 per year. In January of this year the CEO of ACLP said that the rate of 14p/m would be achievable from mid 2020's. My guess is that they will reach in Q4 2020 earliest, so it might be tight on if they can manage 100 planes next year.

Interesting info, based on point of comparison with itself.

Main point of comparison going forward will be A320 at ~60/yr and 737 at ~50/yr both with high levels of profit.

As above, Airbus is considering a new TLS line and has bumped China up to 6/mo, so very well could chose to favor A320 family investment with strong profit and total ownership over having to invest in A220 only to share the profit.


I do not know the contracts but if Airbus invests now in A220 lines, the A220 program does not make any profit if you just invest more than the profit would be without investing. And at one point the A220 will belong fully to Airbus, when the ramp up is finished and the cash flows in. So I think investing now is not the worst idea but I could be wrong because I dont know the small print in the contract with Bombardier.
 
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 2:50 pm

LaunchDetected wrote:
VV wrote:
Yes, it is quite intriguing why Airbus Canada Limited Partnership (ACLP) has not been able to significantly improve the production and delivery rate so far.


It's intriguing if you know nothing about industrial manufacturing of large aircraft. For those who have at least a minimal experience in this industry it's not surprising at all.

You cannot extend a production rate in the twinkling of an eye. Before the Final Assembly Line there is a whole supply chain.

Concur about the supply chain. Also, Airbus is negotiating down pricing, which delays a ramp. No vendor negotiates well then.

There is also the time lag to analyze and impliment a better manufacturing process.

This is why Airbus is using Mobile for the initial rate increase. That plant is about on schedule. After Airbus understands A220 assembly, they will design a better assembly line for Mobile.

As anyone in the industry knows, it takes years to ramp production. Look at the issues Airbus had a Hamburg. Notice the past tense. They learned and will apply to the A220.

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JonesNL
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 2:50 pm

Revelation wrote:
JonesNL wrote:
Skewed information. Actual deliveries with yearly improvements behind it:
2016 7
2017 17 140%
2018 34 100%
2019 44 (37 till september) 30%
2020 100+ (projected) 127%

Only 2019 could be considered sluggish with 30%+ which is quite a an accomplishment. A320 production team would kill to get that number...

JonesNL wrote:
For now the official plan for the a220 is 168 per year. In January of this year the CEO of ACLP said that the rate of 14p/m would be achievable from mid 2020's. My guess is that they will reach in Q4 2020 earliest, so it might be tight on if they can manage 100 planes next year.

Interesting info, based on point of comparison with itself.

Main point of comparison going forward will be A320 at ~60/yr and 737 at ~50/yr both with high levels of profit.

As above, Airbus is considering a new TLS line and has bumped China up to 6/mo, so very well could chose to favor A320 family investment with strong profit and total ownership over having to invest in A220 only to share the profit.


I agree, both A320 and 737 are on an unreachable height regarding production units and profitability. And an A225 is only interesting if they can get the production volume op to 20-30/m. I think that the outlook of the production volume in 2021-2023 will be an important part of the decision for the introduction of an A225. Doesn't make sense to introduce something you can only produce in small numbers...
 
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 3:05 pm

FluidFlow wrote:
I do not know the contracts but if Airbus invests now in A220 lines, the A220 program does not make any profit if you just invest more than the profit would be without investing. And at one point the A220 will belong fully to Airbus, when the ramp up is finished and the cash flows in. So I think investing now is not the worst idea but I could be wrong because I dont know the small print in the contract with Bombardier.

The fine print is in https://www.airbus.com/newsroom/press-r ... ement.html which is the initial announcement:

Airbus will benefit from call rights in respect of all of Bombardier’s interest in CSALP at fair market value, with the amount for non-voting participating shares used by Bombardier capped at the invested amount plus accrued but unpaid dividends, including a call right exercisable no earlier than 7.5 years following the closing, except in the event of certain changes in the control of Bombardier, in which case the right is accelerated. Bombardier will benefit from a corresponding put right whereby it could require that Airbus acquire its interest at fair market value after the expiry of the same period. IQ’s interest is redeemable at fair market value by CSALP, under certain conditions, starting in 2023. IQ will also benefit from tag along rights in connection with a sale by Bombardier of its interest in the partnership.

Closing was July 1, 2018 according to https://www.bombardier.com/en/media/new ... ercom.html

So the partnership can chose to buy out the IQ share starting in 2023, and/or in Feb 2026 either Airbus can request BBD sell its shares to Airbus or BBD can request Airbus buy its shares all at fair market values.

And of course all of this could be amended based on mutual consent, this is just the initial agreement.

Yet till it changes we have Airbus with 50.01% ownership and control of the board so it can decide pretty much anything it wants with regard to the future of the enterprise while IQ + BBD still own 49.99% so will receive dividends and benefit from any growth in the value of the enterprise recognized at time of sale.

Also,

It also contemplates that Bombardier will continue with its current funding plan of CSALP and will fund, if required, the cash shortfalls of CSALP during the first year following the closing up to a maximum amount of US$350 million, and during the second and third years following the closing up to a maximum aggregate amount of US$350 million over both years, in consideration for non-voting participating shares of CSALP with cumulative annual dividends of 2%, with any excess shortfall during such periods to be shared proportionately amongst Class A shareholders.

So, basically BBD is on the hook to support "its current funding plan" from July 2018 onward for three years.

I think it's pretty clear since the A220-500 was not offered for sale before the deal closed that "its current funding plan" did not include producing the A220-500.

Thus it's really up to Airbus to decide if/when/where/how to do A220-500 with QC+BBD along for the ride.

I don't see why Airbus could also not provide funds to ACLP to produce A225 and be paid in stock which would dilute the BBD+QC holding, or ask BBD+QC if they want to invest more in return for stock, etc.

Of course there is a political dimension and Airbus knows they are going to have a presence in Canada for many years to come so they must play nice or face the risk of blowback.
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 3:17 pm

Revelation wrote:
FluidFlow wrote:
I do not know the contracts but if Airbus invests now in A220 lines, the A220 program does not make any profit if you just invest more than the profit would be without investing. And at one point the A220 will belong fully to Airbus, when the ramp up is finished and the cash flows in. So I think investing now is not the worst idea but I could be wrong because I dont know the small print in the contract with Bombardier.

The fine print is in https://www.airbus.com/newsroom/press-r ... ement.html which is the initial announcement:

Airbus will benefit from call rights in respect of all of Bombardier’s interest in CSALP at fair market value, with the amount for non-voting participating shares used by Bombardier capped at the invested amount plus accrued but unpaid dividends, including a call right exercisable no earlier than 7.5 years following the closing, except in the event of certain changes in the control of Bombardier, in which case the right is accelerated. Bombardier will benefit from a corresponding put right whereby it could require that Airbus acquire its interest at fair market value after the expiry of the same period. IQ’s interest is redeemable at fair market value by CSALP, under certain conditions, starting in 2023. IQ will also benefit from tag along rights in connection with a sale by Bombardier of its interest in the partnership.

Closing was July 1, 2018 according to https://www.bombardier.com/en/media/new ... ercom.html

So the partnership can chose to buy out the IQ share starting in 2023, and/or in Feb 2026 either Airbus can request BBD sell its shares to Airbus or BBD can request Airbus buy its shares all at fair market values.

And of course all of this could be amended based on mutual consent, this is just the initial agreement.

Yet till it changes we have Airbus with 50.01% ownership and control of the board so it can decide pretty much anything it wants with regard to the future of the enterprise while IQ + BBD still own 49.99% so will receive dividends and benefit from any growth in the value of the enterprise recognized at time of sale.

Also,

It also contemplates that Bombardier will continue with its current funding plan of CSALP and will fund, if required, the cash shortfalls of CSALP during the first year following the closing up to a maximum amount of US$350 million, and during the second and third years following the closing up to a maximum aggregate amount of US$350 million over both years, in consideration for non-voting participating shares of CSALP with cumulative annual dividends of 2%, with any excess shortfall during such periods to be shared proportionately amongst Class A shareholders.

So, basically BBD is on the hook to support "its current funding plan" from July 2018 onward for three years.

I think it's pretty clear since the A220-500 was not offered for sale before the deal closed that "its current funding plan" did not include producing the A220-500.

Thus it's really up to Airbus to decide if/when/where/how to do A220-500 with QC+BBD along for the ride.

I don't see why Airbus could also not provide funds to ACLP to produce A225 and be paid in stock which would dilute the BBD+QC holding, or ask BBD+QC if they want to invest more in return for stock, etc.

Of course there is a political dimension and Airbus knows they are going to have a presence in Canada for many years to come so they must play nice or face the risk of blowback.



Thanks a lot for that. So in general there are two points: Airbus could change the agreement due to having full control over the ACLP with certain limitations but could stike a deal with BBD and QC. Of course QCs interest is for QC so investment in ramp up and enhanced employment could be used to get QC shares for "free". On the other side if BBD slumps into more troubles then Airbus could give BBD the option to diverge from the investment plan but therefore give Airbus more shares. Options are definitely there.

Then there is the definition of fair market value. A nice term for lawyers to fight over.
 
AF022
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 3:37 pm

I think in an all-economy seating the A220-300 has about 150 seats at 32" pitch? Is this right?
Do we have an idea how many more seats the A220-500 would perhaps have?
or maybe i am getting ahead of even airbus in this thinking?
 
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 3:51 pm

FluidFlow wrote:
Thanks a lot for that. So in general there are two points: Airbus could change the agreement due to having full control over the ACLP with certain limitations but could stike a deal with BBD and QC. Of course QCs interest is for QC so investment in ramp up and enhanced employment could be used to get QC shares for "free". On the other side if BBD slumps into more troubles then Airbus could give BBD the option to diverge from the investment plan but therefore give Airbus more shares. Options are definitely there.

Then there is the definition of fair market value. A nice term for lawyers to fight over.

It is an interestingly constructed deal.

All the cards are in Airbus's hands, yet the benefit of playing a winning hand is split with the partners.

Airbus has the issue that if it favors A220 at the expense of A320 it is in essence giving away money to BBD + QC.

On the other hand if it does not provide enough support to A220 it is devaluing the 50.01% stake in ACLP that it obtained for $1.

A fascinating topic for MBA types who enjoy game theory.

Seems there was a book to be written about the entire A220 saga that I should have written, along with that MAX book that I should be writing right now.
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 3:58 pm

I doubt you will see any new variant until Airbus has bought the entire program. As mentioned Airbus has to buy the rest out at market value (the determination of which I’m sure will be a fun saga in and of it self).

Announcing -500 early raises the planes value, meaning Airbus will have to pay more for full control (but would no longer have to split profits come -500 delivery time).

Waiting on the -500 means Airbus has to pay less for the whole program, and still gets all revenue from -500 orders and deliveries.

There is no desire to trash A220 value because while that would make it cheaper for Airbus to acquire it would require more money and effort to recover from.
 
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JetBuddy
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 4:11 pm

Considering that the potential A220-500 only has two competitors..

Airbus' own A320neo which is sold out for nearly a decade
Boeing's 737-8 which is grounded and sold out for nearly a decade

.. it seems like a good idea to ramp up the A220 line further and launch an A220-500.

(But maybe buy the rest of the A220 program first)
 
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 4:42 pm

Polot wrote:
I doubt you will see any new variant until Airbus has bought the entire program. As mentioned Airbus has to buy the rest out at market value (the determination of which I’m sure will be a fun saga in and of it self).

Announcing -500 early raises the planes value, meaning Airbus will have to pay more for full control (but would no longer have to split profits come -500 delivery time).

Waiting on the -500 means Airbus has to pay less for the whole program, and still gets all revenue from -500 orders and deliveries.

There is no desire to trash A220 value because while that would make it cheaper for Airbus to acquire it would require more money and effort to recover from.

Right, so it seems a good strategy is to work on increasing A220 production rate and decreasing A220 production cost without investing in A225 and causing further stress and complications.

JetBuddy wrote:
Considering that the potential A220-500 only has two competitors..

Airbus' own A320neo which is sold out for nearly a decade
Boeing's 737-8 which is grounded and sold out for nearly a decade

.. it seems like a good idea to ramp up the A220 line further and launch an A220-500.

(But maybe buy the rest of the A220 program first)

Airbus's own count ( see the A220 painted in AC thread ) says they have 530 A220 orders to fill right now, without spending a dime to develop an A225.

Seems that tides them over to 2023 or so without getting another new order, which seems quite pessimistic, chances are good the backlog will grow without A225.

Faury's quote above said Airbus is likely to invest in a stretch, but only after A220 proves to be a commercial success.

I presume this means reaching the point where current A220s return a profit, and the A225 investment can project a profit.

Seems like it will take time to verify these things to be true.

We are told QC is happy to get its money off the table and BBD is in dire straits so a buy out of the partners could happen at any time IMO.

It's all up to Airbus deciding when/how to spend its money.
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 4:43 pm

lightsaber wrote:
This is why Airbus is using Mobile for the initial rate increase. That plant is about on schedule. After Airbus understands A220 assembly, they will design a better assembly line for Mobile.

Lightsaber


Just checking if one of those Mobiles was meant to be Mirabel. Im guessing you meant they will design a better line for Mirabel after Mobile is running, which makes sense to me, but don't want to assume that's what you meant.
 
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 4:49 pm

I'm always perplexed by those who infer that Airbus must choose between further investment in the 220 series or the 320 series. Why not do both? They are a too big to fail multinational that can draw on billions. As pointed out, the 320 orderbook is very strong.....they literally can't make them fast enough, even with 4 final assembly plants. And the modern, narrow, 220 seals up the 110-150 seat market for them. If I was the king of Airbus, I would be full speed ahead right now on both programs instead of just plodding along. They've got Boeing on the ropes. Go for the jugular.

The major concern is the crappy reliability of the GTF engines. Up till now, the airlines have essentially been guinea pigs for a PW engine development program. Apparently, PW is unable to deliver a service-ready engine.
 
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 8:12 pm

Revelation wrote:
JetBuddy wrote:
Considering that the potential A220-500 only has two competitors..

Airbus' own A320neo which is sold out for nearly a decade
Boeing's 737-8 which is grounded and sold out for nearly a decade

.. it seems like a good idea to ramp up the A220 line further and launch an A220-500.

(But maybe buy the rest of the A220 program first)

Airbus's own count ( see the A220 painted in AC thread ) says they have 530 A220 orders to fill right now, without spending a dime to develop an A225.

Seems that tides them over to 2023 or so without getting another new order, which seems quite pessimistic, chances are good the backlog will grow without A225.

Faury's quote above said Airbus is likely to invest in a stretch, but only after A220 proves to be a commercial success.

I presume this means reaching the point where current A220s return a profit, and the A225 investment can project a profit.

Seems like it will take time to verify these things to be true.

We are told QC is happy to get its money off the table and BBD is in dire straits so a buy out of the partners could happen at any time IMO.

It's all up to Airbus deciding when/how to spend its money.


Obviously it's up to Airbus how to spend their money.

If Airbus decides to launch an A220-500 in 2020 it would likely not be ready for delivery until 2024-2025. By that time, production would have been ramped up significantly. A lot of things can change in 5 years. Sometimes it's better to be forward leaning and progressive, especially when you know there's demand for the aircraft and the "other company" is unlikely to bring a competitor to market within the time frame.

Stretching the fuselage of the A220-300 shouldn't be a massive R&D task. As far as I know, the C-Series was built with the CS300 as the base model, and the CS100 as the shrink. I believe a possible stretch was already accounted for during the development of the aircraft. It does seem like it has the wings, power and landing gear for a larger subtype.
 
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 8:29 pm

LaunchDetected wrote:
https://simpleflying.com/air-france-airbus-a220-500/

A220-500 name spotted on a slide of the investor day:

Image

Not a big news but it can fuel some discussions. I don't think we will see the A220-500 before 2030, they need to ensure a correct ramp-up first and it would predate the A320neo.


How did we get this far into this thread without anyone commenting on that very strange looking “e145” with the underwing engines?
 
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 8:44 pm

JetBuddy wrote:
Obviously it's up to Airbus how to spend their money.

If Airbus decides to launch an A220-500 in 2020 it would likely not be ready for delivery until 2024-2025. By that time, production would have been ramped up significantly. A lot of things can change in 5 years. Sometimes it's better to be forward leaning and progressive, especially when you know there's demand for the aircraft and the "other company" is unlikely to bring a competitor to market within the time frame.

Stretching the fuselage of the A220-300 shouldn't be a massive R&D task. As far as I know, the C-Series was built with the CS300 as the base model, and the CS100 as the shrink. I believe a possible stretch was already accounted for during the development of the aircraft. It does seem like it has the wings, power and landing gear for a larger subtype.

Still, we're left with Faury's quote above saying Airbus is likely to invest in a stretch, but only after A220 proves to be a commercial success.

It seems a little early to declare victory in 2020, but you never know.
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 9:04 pm

Revelation wrote:
JetBuddy wrote:
Obviously it's up to Airbus how to spend their money.

If Airbus decides to launch an A220-500 in 2020 it would likely not be ready for delivery until 2024-2025. By that time, production would have been ramped up significantly. A lot of things can change in 5 years. Sometimes it's better to be forward leaning and progressive, especially when you know there's demand for the aircraft and the "other company" is unlikely to bring a competitor to market within the time frame.

Stretching the fuselage of the A220-300 shouldn't be a massive R&D task. As far as I know, the C-Series was built with the CS300 as the base model, and the CS100 as the shrink. I believe a possible stretch was already accounted for during the development of the aircraft. It does seem like it has the wings, power and landing gear for a larger subtype.

Still, we're left with Faury's quote above saying Airbus is likely to invest in a stretch, but only after A220 proves to be a commercial success.

It seems a little early to declare victory in 2020, but you never know.

I expect in 2020, regarding the A220, Airbus will focus on manufacturing, PiPs and building a sufficient backlog to cut costs in the supply chain.

Maybe set a small team to start -500 studies, but no more.

I really want the -500, it will take time.

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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 9:27 pm

I was under the impression that Bombardier planned the 500 from the beginning. One wonders how much engineering and development work there is that actually has to be done.
 
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 9:46 pm

SteelChair wrote:
I have no doubt that the A220-500 will be launched within the next 12 months (mho). The only thing I dont understand is why CSALP isn't moving faster with the production ramp up, now that the orders are increasing.


Highly unlikely imho. I can't see them even entertaining this until they get the Investment Quebec share in 2023. Why pay more for that stake by vastly boosting value for the program? Potentially wait till 2026 to buy BBD's stock too.....

Sincerely hope I'm wrong. But I'm can't see Airbus being that aggressive.
 
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 9:54 pm

SteelChair wrote:
I'm always perplexed by those who infer that Airbus must choose between further investment in the 220 series or the 320 series. Why not do both? They are a too big to fail multinational that can draw on billions.


The problem with that is Boeing is also a too big to fail multinational.An A220-500 would almost certainly fall between 75-80 tonnes MTOW. Boeing executives may not be happy about being second place to Airbus in single aisle jets, but they might be supremely upset at having almost no piece of the pie. This is likely to cause them to invest in a clean sheet design to provide a significant challenge to Airbus.

MTOW
63.049 tonnes A220-100
69.853 tonnes A220-300
75.5 tonnes A319neo
79.0 tonnes A320neo
80.286 tonnes 737Max-7
82.191 tonnes 737Max-8

I still say they might be killing the goose that is now laying golden eggs.
 
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 10:09 pm

AF022 wrote:
I think in an all-economy seating the A220-300 has about 150 seats at 32" pitch? Is this right?
Do we have an idea how many more seats the A220-500 would perhaps have?
or maybe i am getting ahead of even airbus in this thinking?


I believe the 223 has 140-145 seats with all Y 32" pitch, based on the Swiss 223 config. A hypothetical 225 would be in the 165-175 range for the same config.

Revelation wrote:
Seems that tides them over to 2023 or so without getting another new order, which seems quite pessimistic, chances are good the backlog will grow without A225.

Faury's quote above said Airbus is likely to invest in a stretch, but only after A220 proves to be a commercial success.

I presume this means reaching the point where current A220s return a profit, and the A225 investment can project a profit.


There's an interesting angle here. Launch the 225 and Airbus can drive suppliers to go even lower and improve profitability of the program while forcing Boeing to scramble.

SteelChair wrote:
I was under the impression that Bombardier planned the 500 from the beginning. One wonders how much engineering and development work there is that actually has to be done.


They've sized the wing and some structures for a hypothetical -500. There would still be some engineering work to do. And Airbus will now to optimize production and get several PiPs done to clean up the frame before launching the -500. All the more reason, I can't see this being launched before 2023. Nothing stopping them from talking to customers though. And if they start really ramping up the PiPs, in addition to the investment they are making in production, you'll know they're a year away from launching. I think they are mostly focusing on production and the supply chain right now.
 
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 10:12 pm

Revelation wrote:
JetBuddy wrote:
Obviously it's up to Airbus how to spend their money.

If Airbus decides to launch an A220-500 in 2020 it would likely not be ready for delivery until 2024-2025. By that time, production would have been ramped up significantly. A lot of things can change in 5 years. Sometimes it's better to be forward leaning and progressive, especially when you know there's demand for the aircraft and the "other company" is unlikely to bring a competitor to market within the time frame.

Stretching the fuselage of the A220-300 shouldn't be a massive R&D task. As far as I know, the C-Series was built with the CS300 as the base model, and the CS100 as the shrink. I believe a possible stretch was already accounted for during the development of the aircraft. It does seem like it has the wings, power and landing gear for a larger subtype.


Still, we're left with Faury's quote above saying Airbus is likely to invest in a stretch, but only after A220 proves to be a commercial success.

It seems a little early to declare victory in 2020, but you never know.


Bit of a chicken and egg problem. The A220 can't be a big success without the 225. And can't have the 225 without it being a success. I have a feeling their definition of success is basically moving to cash flow positive, not a demand of the program being net profitable as a whole.
 
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 10:34 pm

SteelChair wrote:
I was under the impression that Bombardier planned the 500 from the beginning. One wonders how much engineering and development work there is that actually has to be done.

I do not think much if any planning was done up front.

The closest thing I found was a BBD exec saying the wing could support a bigger variant: https://www.flightglobal.com/news/artic ... -l-427129/

This is a lot different than saying a bigger variant was planned from the beginning, and the article makes no such claim.

Leeham suggests "There are rather modest changes that need to be done to create an extended model that seat up to 180 passengers" ( https://leehamnews.com/2016/04/14/can-b ... 300-cs500/ ) but this is not a BBD statement and again says nothing about it being planned from the beginning.

Page 1 of this thread has an early slide suggesting there was a notional CS500 in some marketing materials.

I haven't found any evidence suggesting anything was done beyond a marketing projection.

So we are left with an someone inside the company saying the same wing could work and someone outside the company suggesting it is "modest change" unless others provide more insight.
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 11:08 pm

They had the names reserved at one point, but iirc they lapsed (and its a220 not cs#00 now). And trademarks probably are barely any extra paperwork when filing for cs300 and cs100.

http://www.aviationgazette.com/the-reas ... e-cseries/
"Bombardier has reserved trademarks for CS500 and CS700, providing at least the possibility of future stretched models of the aircraft."
 
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Re: Air France Studies Stretched Airbus "A220-500"

Fri Nov 08, 2019 11:55 pm

Several possible reasons for the slow rollout for the 225, just some random thoughts: Mostly just mho.

-they didn't want to provoke Boeing and Airbus any more than necessary at the beginning of the program, thus they purposely kept a low profile on the 500

-yet, Boeing and Airbus clearly saw that wing, and had so much experience doing stretches themselves, that they knew the 500 would be relatively easy to accomplish.

-once launced, the extremely low seat mile costs of the 500 will steal orders from the 300 and likely kill they 100. Thus, Bombardier/CSALP want to sell as many 100s and 300s as possible now, prior to selling the "ultimate" version of this airplane.

-they want the 500 to be very effective, the 100 and 300 are fleshing out the design, finding the weak spots. By the time the 500 comes out, all those weak spots will be fixed.

-they want to be able to build the 500 at a high rate, so no need to launch while still building up production rate and supply chain.

-PW is basically in the advanced development stage, due to their inability to deliver a truly service ready engine. Its not yet ready for the higher thrust levels required by the 500 and will barely run reliably at 24k.

-PW still building up production rate.

-the "boxes" at the 3 production spots at FAL1 in Montreal are sized to fit the 500.

I tend to think that customers and sub contractors/suppliers are going to want to see soon that the 500 program is coming. They want to see program momentum prior to further commitment on their part. I'll bet those conversations are already underway. I see a 500 launch within 18 months, hopefully sooner, with first delivery in 2024.
 
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Re: Air France Studies Stretched Airbus "A220-500"

Sat Nov 09, 2019 1:40 am

Revelation wrote:
JetBuddy wrote:
Obviously it's up to Airbus how to spend their money.

If Airbus decides to launch an A220-500 in 2020 it would likely not be ready for delivery until 2024-2025. By that time, production would have been ramped up significantly. A lot of things can change in 5 years. Sometimes it's better to be forward leaning and progressive, especially when you know there's demand for the aircraft and the "other company" is unlikely to bring a competitor to market within the time frame.

Stretching the fuselage of the A220-300 shouldn't be a massive R&D task. As far as I know, the C-Series was built with the CS300 as the base model, and the CS100 as the shrink. I believe a possible stretch was already accounted for during the development of the aircraft. It does seem like it has the wings, power and landing gear for a larger subtype.

Still, we're left with Faury's quote above saying Airbus is likely to invest in a stretch, but only after A220 proves to be a commercial success.

It seems a little early to declare victory in 2020, but you never know.



The last statement by Faury was in January, in June Airbus' Scherer on the A220-500: Every plane wishes to be stretched but we’re not considering it right now. #PAS19

That was June 2019.

https://twitter.com/airwaysmagazine/sta ... 89152?s=19
 
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Re: Air France Studies Stretched Airbus "A220-500"

Sat Nov 09, 2019 1:47 am

JetBuddy wrote:
Considering that the potential A220-500 only has two competitors..

Airbus' own A320neo which is sold out for nearly a decade
Boeing's 737-8 which is grounded and sold out for nearly a decade

.. it seems like a good idea to ramp up the A220 line further and launch an A220-500.

(But maybe buy the rest of the A220 program first)


I think supply and demand would dictate you dont have to do anything when you're the only game in town
 
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Re: Air France Studies Stretched Airbus "A220-500"

Sat Nov 09, 2019 3:39 am

I find the idea that Airbus won't launch the 225 because of the 320N odd. They control both production lines. They can absolutely steer customers as it suits their interest. And I fully expect, if they go earlier with the 225, they will largely restrict sales to existing customers and to any large new buyers coming over from E1s. It won't be some small airline with an order of 5. It will be DL, B6, AC, LH Group and AF as their launch base through top up orders. Heck, Airbus can even use access to the 225 to drive 321N/XLR sales. Everyone talks about how Airbus won't like competing against itself. Nobody talks about how the eye-watering CASM of the 225 would give Airbus massive power. Imagine the advantage any airline operating the 225 has against customers flying 320Ns and 7M8s.
 
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Re: Air France Studies Stretched Airbus "A220-500"

Sat Nov 09, 2019 11:17 am

JonesNL wrote:
Revelation wrote:
JonesNL wrote:
Skewed information. Actual deliveries with yearly improvements behind it:
2016 7
2017 17 140%
2018 34 100%
2019 44 (37 till september) 30%
2020 100+ (projected) 127%

Only 2019 could be considered sluggish with 30%+ which is quite a an accomplishment. A320 production team would kill to get that number...

JonesNL wrote:
For now the official plan for the a220 is 168 per year. In January of this year the CEO of ACLP said that the rate of 14p/m would be achievable from mid 2020's. My guess is that they will reach in Q4 2020 earliest, so it might be tight on if they can manage 100 planes next year.

Interesting info, based on point of comparison with itself.

Main point of comparison going forward will be A320 at ~60/yr and 737 at ~50/yr both with high levels of profit.

As above, Airbus is considering a new TLS line and has bumped China up to 6/mo, so very well could chose to favor A320 family investment with strong profit and total ownership over having to invest in A220 only to share the profit.


I agree, both A320 and 737 are on an unreachable height regarding production units and profitability. And an A225 is only interesting if they can get the production volume op to 20-30/m. I think that the outlook of the production volume in 2021-2023 will be an important part of the decision for the introduction of an A225. Doesn't make sense to introduce something you can only produce in small numbers...


We gotta stop using A225 as an abbreviation for the A220-500. Because A225 sounds like you are talking about the Antonov 225. Haha I’m just messing with you.
Jumped out of: C130H, C130J, C17A, C212, CH47, and UH60. Bucket list: C160, A400, C2
 
Calledonian
Posts: 27
Joined: Sat Feb 02, 2019 4:10 pm

Re: Air France Studies Stretched Airbus "A220-500"

Sat Nov 09, 2019 5:32 pm

IMO the ultimate goal of Airbus should be to launch the A220-500 as a replacement for the 320. On paper at least, the 500 series would outperform the 320neo and MAX 8. It would also allow them to concentrate on the more profitable 321, and potentially launch a stretched 321 in the future with a new wing. Perhaps also aiming towards a further stretch of the 220 to a size between the 320 & 321.

How complicated (if at all possible) would it be to modify the A220 to allow cockpit commonality with the 320?
 
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JetBuddy
Posts: 2586
Joined: Wed Dec 25, 2013 1:04 am

Re: Air France Studies Stretched Airbus "A220-500"

Sat Nov 09, 2019 7:58 pm

Babyshark wrote:
JetBuddy wrote:
Considering that the potential A220-500 only has two competitors..

Airbus' own A320neo which is sold out for nearly a decade
Boeing's 737-8 which is grounded and sold out for nearly a decade

.. it seems like a good idea to ramp up the A220 line further and launch an A220-500.

(But maybe buy the rest of the A220 program first)


I think supply and demand would dictate you dont have to do anything when you're the only game in town


There's clearly more demand than supply at the moment. You don't have to do anything, but you could be forward leaning and try to leverage that demand into cash and even higher market share.

If Airbus decides to rest on their laurels and not take advantage of the current situation, it could go back and bite them in the ass in the future. In my opinion - (and others), there's likely not that much R&D necessary to stretch the aircraft.
 
JoergAtADN
Posts: 79
Joined: Tue Aug 30, 2016 6:01 pm

Re: Air France Studies Stretched Airbus "A220-500"

Sat Nov 09, 2019 8:14 pm

VV wrote:
It is very difficult to imagine Airbus would sacrifice the A320neo for A220-500 in AF's fleet.


Airbus is sold out for many years, it has basically three choices:
  • Build a new A320 production line, which you can use ~15 years to earn money
  • Build a new A220 production line, which you can use 30+ years to earn money
  • Do not invest in a new production line and let the competition build these planes
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