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A330neo future bleak from COVID impact

Mon Aug 17, 2020 12:25 pm

Leeham has an article on the future of the A330neo. Airbus has 226 A330-900s in backlog. One hundred fourteen of these, or 50.44%, are with airlines that are in administration, technically insolvent or with a politically sanctioned carrier. Seventy-eight -900 orders are from AirAsiaX, which is technically insolvent. There also are 14 A330-800s in backlog.

Even before the virus crisis erupted globally in March, the future of the A330neo program had a cloud over it. There are only 336 orders since the program was launched in 2014. The skyline quality was weak due to the AirAsiaX concentration and the Iran Air order.


What’s the future for the A330neo program? “Bleak” is probably the best word to describe it.

https://leehamnews.com/2020/08/17/ponti ... id-impact/
 
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Dutchy
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Re: A330neo future bleak from COVID impact

Mon Aug 17, 2020 12:28 pm

A shame really, but the A330NEO was a stop-gap measure anyway. Airbus probably made some money out of the production run of around 175-200 and kept the prices of the Boeing 787 "honest'. Goal achieved.
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Weatherwatcher1
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Re: A330neo future bleak from COVID impact

Mon Aug 17, 2020 12:34 pm

Given its customer base, the A330neo appears to be at risk of going out of production. The only actual solvent airlines on the order list with more than 5 airplanes in order are Delta, Cebu Pacific and Garuda.

9/11 caused the end of the 757 since it was heavily reliant on US domestic carriers. The 767 almost went out of production as well, but was saved by ANA, JAL and LAN. It’s possible that Airbus can scrape by on low production rates like the 767 did. it’s also possible that Airbus could work to convert airlines to the larger A350 or smaller A321 (like how Boeing pushed airlines towards the 737NG in the early 2000s), and end A330neo production. Time will tell which strategy Airbus chooses.
Last edited by Weatherwatcher1 on Mon Aug 17, 2020 1:04 pm, edited 2 times in total.
 
Opus99
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Re: A330neo future bleak from COVID impact

Mon Aug 17, 2020 12:40 pm

Dutchy wrote:
A shame really, but the A330NEO was a stop-gap measure anyway. Airbus probably made some money out of the production run of around 175-200 and kept the prices of the Boeing 787 "honest'. Goal achieved.

Airbus hoped to sell 1000 a330neo's but yeah sure goal achieved
 
ewt340
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Re: A330neo future bleak from COVID impact

Mon Aug 17, 2020 12:49 pm

I think It's time for Airbus to start thinking about A310, A300 and A330neo replacements.
 
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Re: A330neo future bleak from COVID impact

Mon Aug 17, 2020 1:05 pm

While I am convinced, Airbus was quite a bit more optimistic regarding the 330neo, I don't see it dying yet. I suggest the 330neo vs. 330ceo combo is in a comparable situation as the 777X vs. 77W, as in way too many in itself, and way too many of young age planes have been built and are far from the replacement cycle.
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VV
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Re: A330neo future bleak from COVID impact

Mon Aug 17, 2020 1:06 pm

Is it due to COVID-19 or is it because of other reasons?

I am not sure it has been wildly popular since the beginning.

There are many A330 CEO coming into second life soon. At current fuel price and at current A330 CEO lease rate there is absolutely NO doubt it is more interesting to operate A330 CEO.
Last edited by VV on Mon Aug 17, 2020 1:08 pm, edited 2 times in total.
 
Weatherwatcher1
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Re: A330neo future bleak from COVID impact

Mon Aug 17, 2020 1:06 pm

ewt340 wrote:
I think It's time for Airbus to start thinking about A310, A300 and A330neo replacements.


I’m sure they are thinking about it. The information that Airbus is accelerating/prioritizing the A321XLR development could be a clue.

Airbus is losing Billions. The A220 still requires significant investment to break even. Until production rates for A350, A320neo and A220 are back to healthy levels, I doubt Airbus has any money to invest in a new design.
 
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OA940
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Re: A330neo future bleak from COVID impact

Mon Aug 17, 2020 1:12 pm

ewt340 wrote:
I think It's time for Airbus to start thinking about A310, A300 and A330neo replacements.


I think it's a bit late to start thinking about A300 and A310 replacements...
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tommy1808
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Re: A330neo future bleak from COVID impact

Mon Aug 17, 2020 1:14 pm

Opus99 wrote:
Dutchy wrote:
A shame really, but the A330NEO was a stop-gap measure anyway. Airbus probably made some money out of the production run of around 175-200 and kept the prices of the Boeing 787 "honest'. Goal achieved.

Airbus hoped to sell 1000 a330neo's but yeah sure goal achieved


That wasn´t Dutchy´s point though. Airbus spend 2 billion on the program, so probably will be ok with not capturing the market they saw, and might even end up with a black zero for the program. However, they gave the 787 a competitor that Boeing had to counter with discounts, which may lead to Boeing not making a single $ on what is shaping up to be the most successful wide body program in terms of quantity. Which at least was a side goal, as it dampens the desire to fund moonshot programs going forward. Also, there are probably few people outside of Airbus that know how many customers came in with an inquiry about the A330neo, and walked out with an A359 order..... or went for an A321neoLR/XLR

But yeah, orders have been underwhelming.

best regards
Thomas
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Prost
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Re: A330neo future bleak from COVID impact

Mon Aug 17, 2020 1:18 pm

OA940 wrote:
ewt340 wrote:
I think It's time for Airbus to start thinking about A310, A300 and A330neo replacements.


I think it's a bit late to start thinking about A300 and A310 replacements...


Don’t be dissing us procrastinators!
 
MIflyer12
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Re: A330neo future bleak from COVID impact

Mon Aug 17, 2020 1:21 pm

Opus99 wrote:
Dutchy wrote:
A shame really, but the A330NEO was a stop-gap measure anyway. Airbus probably made some money out of the production run of around 175-200 and kept the prices of the Boeing 787 "honest'. Goal achieved.

Airbus hoped to sell 1000 a330neo's but yeah sure goal achieved


At the end of June 2020 they had delivered 46. Even with the development cost of a refresh instead of clean-sheet development you don't make a return on capital with 46.

They may have achieved some success in keeping 787 prices 'honest' but surely they cannibalized some A350 sales, too.

A345/346, A380, A400M, A330neo... Airbus, the great capital destruction machine.
 
VV
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Re: A330neo future bleak from COVID impact

Mon Aug 17, 2020 1:24 pm

OA940 wrote:
ewt340 wrote:
I think It's time for Airbus to start thinking about A310, A300 and A330neo replacements.


I think it's a bit late to start thinking about A300 and A310 replacements...


And it is a little bit too early to think about A330neo replacement.
 
Weatherwatcher1
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Re: A330neo future bleak from COVID impact

Mon Aug 17, 2020 1:26 pm

VV wrote:
Is it due to COVID-19 or is it because of other reasons?

I am not sure it has been wildly popular since the beginning.


COVID probably accelerated the problem. Airbus had been marketing the A330neo as a cheaper widebody to airlines less financially stable. It’s leasing rates were already pretty low.

viewtopic.php?t=1374235#p19827945
 
Opus99
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Re: A330neo future bleak from COVID impact

Mon Aug 17, 2020 1:27 pm

tommy1808 wrote:
Opus99 wrote:
Dutchy wrote:
A shame really, but the A330NEO was a stop-gap measure anyway. Airbus probably made some money out of the production run of around 175-200 and kept the prices of the Boeing 787 "honest'. Goal achieved.

Airbus hoped to sell 1000 a330neo's but yeah sure goal achieved


That wasn´t Dutchy´s point though. Airbus spend 2 billion on the program, so probably will be ok with not capturing the market they saw, and might even end up with a black zero for the program. However, they gave the 787 a competitor that Boeing had to counter with discounts, which may lead to Boeing not making a single $ on what is shaping up to be the most successful wide body program in terms of quantity. Which at least was a side goal, as it dampens the desire to fund moonshot programs going forward. Also, there are probably few people outside of Airbus that know how many customers came in with an inquiry about the A330neo, and walked out with an A359 order..... or went for an A321neoLR/XLR

But yeah, orders have been underwhelming.

best regards
Thomas

I understand your point completely. But there’s not capturing the market you envisioned maybe 500 orders cool but it’s basically half that when you take our Iran air and air Asia X. Maybe they’ll break even on it but I don’t think we should pretend like the plan was to just keep 787 prices honest, like the honest pricing makes a difference to the accounts of Airbus. Especially when you consider how many it’s predecessor sold
 
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Re: A330neo future bleak from COVID impact

Mon Aug 17, 2020 1:28 pm

Dutchy wrote:
A shame really, but the A330NEO was a stop-gap measure anyway. Airbus probably made some money out of the production run of around 175-200 and kept the prices of the Boeing 787 "honest'. Goal achieved.


I think the A330neo is a lot better than most think. Covid is not helping, but most airframes, not just the A330neo, are effected.

I wouldn't be surprised if EK take 40 A330neos seeing as the 779 is now delayed until 2022, and EK seems to be assessing their fleet away from 777 & A380s.
 
Weatherwatcher1
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Re: A330neo future bleak from COVID impact

Mon Aug 17, 2020 1:36 pm

VV wrote:
OA940 wrote:
ewt340 wrote:
I think It's time for Airbus to start thinking about A310, A300 and A330neo replacements.


I think it's a bit late to start thinking about A300 and A310 replacements...


And it is a little bit too early to think about A330neo replacement.


I think it is too early to talk about replacement. However it is worth noting that the first A340-500/600 entered service in 2002. Airbus launched the A350 in 2005 which replaced the A340 only 3 years after the version it was designed to replace entered service. Airbus can move on quickly if they have a sales flop, although I highly doubt that would happen unless the A321XLR is the A330neo replacement
 
Weatherwatcher1
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Re: A330neo future bleak from COVID impact

Mon Aug 17, 2020 1:38 pm

Scotron12 wrote:
Dutchy wrote:
A shame really, but the A330NEO was a stop-gap measure anyway. Airbus probably made some money out of the production run of around 175-200 and kept the prices of the Boeing 787 "honest'. Goal achieved.


I think the A330neo is a lot better than most think. Covid is not helping, but most airframes, not just the A330neo, are effected.

I wouldn't be surprised if EK take 40 A330neos seeing as the 779 is now delayed until 2022, and EK seems to be assessing their fleet away from 777 & A380s.


The A330neo seems perfectly suited to the Middle East and China regional markets. It’s great for high capacity regional routes like Dubai to India or Domestic China. Unfortunately those airlines haven’t ordered the airplane pre COVID. Will they order it before the order book dries up?
 
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Re: A330neo future bleak from COVID impact

Mon Aug 17, 2020 1:51 pm

Scotron12 wrote:
Dutchy wrote:
A shame really, but the A330NEO was a stop-gap measure anyway. Airbus probably made some money out of the production run of around 175-200 and kept the prices of the Boeing 787 "honest'. Goal achieved.


I think the A330neo is a lot better than most think. Covid is not helping, but most airframes, not just the A330neo, are effected.


IMO there are only a handfull of comercial programs that is certain to make it through the next few years:
A220
A320Neo
A350
B787
C919
 
Lootess
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Re: A330neo future bleak from COVID impact

Mon Aug 17, 2020 1:52 pm

    ewt340 wrote:
    I think It's time for Airbus to start thinking about A310, A300 and A330neo replacements.


    you probably meant A350 replacements ala A350neo, which is likely
     
    cledaybuck
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    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 1:55 pm

    Scotron12 wrote:
    Dutchy wrote:
    A shame really, but the A330NEO was a stop-gap measure anyway. Airbus probably made some money out of the production run of around 175-200 and kept the prices of the Boeing 787 "honest'. Goal achieved.


    I think the A330neo is a lot better than most think. Covid is not helping, but most airframes, not just the A330neo, are effected.

    I wouldn't be surprised if EK take 40 A330neos seeing as the 779 is now delayed until 2022, and EK seems to be assessing their fleet away from 777 & A380s.

    At this point, I think EK is thrilled (and just about every other airline too) about any delay to any aircraft they have on order.
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    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 2:04 pm

    tommy1808 wrote:
    Opus99 wrote:
    Dutchy wrote:
    A shame really, but the A330NEO was a stop-gap measure anyway. Airbus probably made some money out of the production run of around 175-200 and kept the prices of the Boeing 787 "honest'. Goal achieved.

    Airbus hoped to sell 1000 a330neo's but yeah sure goal achieved

    That wasn´t Dutchy´s point though. Airbus spend 2 billion on the program, so probably will be ok with not capturing the market they saw, and might even end up with a black zero for the program. However, they gave the 787 a competitor that Boeing had to counter with discounts, which may lead to Boeing not making a single $ on what is shaping up to be the most successful wide body program in terms of quantity. Which at least was a side goal, as it dampens the desire to fund moonshot programs going forward. Also, there are probably few people outside of Airbus that know how many customers came in with an inquiry about the A330neo, and walked out with an A359 order..... or went for an A321neoLR/XLR

    But yeah, orders have been underwhelming.

    best regards
    Thomas

    Based on these comments, it seems like A330neo should be collecting its participation trophy...

    I'm not a big fan of the whole idea that a product that doesn't meet one's own goals still has merit because it put pressure on the competition. Sure, but it also put a lot of pressure on you to carry that red ink! And then you need to figure in opportunity cost: what else could you have been doing with that time, talent and money?

    Are we going to claim victory for 747-8i for keeping price pressure on A380 even though neither program will never make a cent? Or maybe Boeing should have just let Airbus do what it wanted in that segment and put its money towards something really useful such as the original Yellowstone plan that had no 747-8 but did have a 737 replacement and a 777 replacement too.

    A330neo's future really relies on both the COVID recovery and on Airbus's own sense of the product's future. Personally I'm a fan of the product and can see why airlines would buy it, yet I don't know what feedback Airbus is getting from its customer base on future interest. Right now they have one of the US3, zero of the EU3 and zero of the CN3 as customers. They need to be optimistic of capturing at least another two of the big customers to have a future, IMO.
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    frigatebird
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    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 2:33 pm

    tommy1808 wrote:
    Opus99 wrote:
    Dutchy wrote:
    A shame really, but the A330NEO was a stop-gap measure anyway. Airbus probably made some money out of the production run of around 175-200 and kept the prices of the Boeing 787 "honest'. Goal achieved.

    Airbus hoped to sell 1000 a330neo's but yeah sure goal achieved


    That wasn´t Dutchy´s point though. Airbus spend 2 billion on the program, so probably will be ok with not capturing the market they saw, and might even end up with a black zero for the program. However, they gave the 787 a competitor that Boeing had to counter with discounts, which may lead to Boeing not making a single $ on what is shaping up to be the most successful wide body program in terms of quantity. Which at least was a side goal, as it dampens the desire to fund moonshot programs going forward. Also, there are probably few people outside of Airbus that know how many customers came in with an inquiry about the A330neo, and walked out with an A359 order..... or went for an A321neoLR/XLR

    But yeah, orders have been underwhelming.

    best regards
    Thomas


    With the benefit of 20/20 hindsight, Airbus may not have launched the A330neo looking at the current backlog and market outlook. Without it, Boeing could have made more money on some 787 orders, DL would have kept and expanded their 787 order and VS would have topped up their 787 order too. But that's about it IMO. AirasiaX would have ordered A350s instead, GA would have kept their A330ceo order instead of converting to neo's, TP would probably have kept their A350 order, Cebu possibly could have ordered A330ceo's instead although I don't rule out they would have taken 787s. Maybe Airbus could have developed a more optimised A350-800 but I'm not too sure.

    ewt340 wrote:
    I think It's time for Airbus to start thinking about A310, A300 and A330neo replacements.


    They already have it, the A321XLR. I don't think Airbus needs a new small widebody this decade, with the A321XLR they have covered the market under the A350 short to mid term.
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    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 2:55 pm

    Well they had a good go at it. Crisis tend to be the time when cullings occur. After the crisis it looks like the worlds fleets will be converging on just a few models that hit the optimal points. Which is to be expected as technology matures. the A321 and B787 seem to be the best bets as this time and this rounds winners.
     
    TYWoolman
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    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 3:17 pm

    This must make carriers like Delta on edge now wondering if the airplane they plan to rely on may go bust. Can there possibly be anything else to pile on this heap of covid19 s%!t????????
     
    TYWoolman
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    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 3:30 pm

    What about an A330NEO/CEO combi? 150 passengers in front, widebody comfort, the rest cargo. Seems like Cargo can be the profit king going forward, but not sure aerodynamically if the aircraft would need to change. Another drawback to this is it would have to be implemented on heavy trunk routes/frequency increase in order to gaurantee even weight distribution. But I can see Delta making it work into Amsterdam, Paris, Seoul, and Brazil (future). Basically the likes of A310/A321XL capacity with the added cargo revenue all under one fuel burn.
     
    VV
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    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 3:45 pm

    Weatherwatcher1 wrote:
    VV wrote:
    Is it due to COVID-19 or is it because of other reasons?

    I am not sure it has been wildly popular since the beginning.


    COVID probably accelerated the problem. Airbus had been marketing the A330neo as a cheaper widebody to airlines less financially stable. It’s leasing rates were already pretty low.

    viewtopic.php?t=1374235#p19827945


    It is not necessarily a good thing to bet on airlines that are financially less stable.
     
    djpearman
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    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 3:57 pm

    I'm afraid I'm going to disagree with most comments here - I think Airbus made the right move in developing the A330neo. Sure, it's not currently selling well, but it is designed to be the direct replacement for an installed base of just under 1.5k A330ceos, most of which are still relatively young. As such, most airlines currently flying A330ceos still have several years of life left in their fleet and replacing them is still a ways away. Once it comes to replacing more existing A330s, I'm sure we'll see sales pick up. COVID has hit the aircraft market extremely hard, in particular the medium and long haul segments, and will thus have a significant negative impact on sales in the short term.

    In my opinion, Boeing made a big mistake in not re-engining the 757 and 767 in the 2000s, a time both of these were not selling well. This left a hole in Boeing's commerical passenger jet lineup. Now, we have a situation, where there's a lot of discussion about the Middle of the Market - the target market of 757 and 767 - and how airlines in particular in North America are looking for replacements. Had Boeing re-engined those aircraft, they would have strong offerings for airlines looking for aircraft in the 200 to 250 seat market.

    In a similar manner, had Airbus not re-engined the A330ceo into the A330neo, then they would have no competitive aircraft in the 250 to 280 seat widebody market and would end up ceding that market segment to Boeing completely. But as it stands now, Airbus can offer airlines flying A330ceos an easy replacement with a high degree of commonality.
     
    VV
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    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 4:19 pm

    djpearman wrote:
    I'm afraid I'm going to disagree with most comments here - I think Airbus made the right move in developing the A330neo. Sure, it's not currently selling well, but it is designed to be the direct replacement for an installed base of just under 1.5k A330ceos, most of which are still relatively young. As such, most airlines currently flying A330ceos still have several years of life left in their fleet and replacing them is still a ways away. Once it comes to replacing more existing A330s, I'm sure we'll see sales pick up.

    ...


    That's an interesting and very optimistic point of view.
    So far the toughest competition against A330neo are second hand A330 CEO and second hand 787.
    This situation is not going to change soon.
     
    ScottB
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    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 4:26 pm

    Weatherwatcher1 wrote:
    Airbus launched the A350 in 2005 which replaced the A340 only 3 years after the version it was designed to replace entered service. Airbus can move on quickly if they have a sales flop, although I highly doubt that would happen unless the A321XLR is the A330neo replacement


    Well, to be honest, the A350 on offer in 2005 was pretty much what the A330neo turned out to be -- a modest upgrade of the A330, with basically the same capacity, and new-tech engines on the wings. The A350XWB wasn't launched until 2006, after some very public rebukes of the original A350 concepts from the customer base and a string of high-profile losses to the 787 in order competitions. And the A350XWB moved up in capacity to be far more similar to the 777 and failed A340NG.

    TYWoolman wrote:
    This must make carriers like Delta on edge now wondering if the airplane they plan to rely on may go bust.


    This is probably far less of a worry right now for Delta than simply remaining in business, or at the very least staying out of bankruptcy. FWIW, with program development essentially done, it probably costs Airbus less to keep producing the remaining backlog for the customers who are able to accept deliveries than it does to pay compensation for cancelling those orders -- and it also preserves jobs. It's not as if Delta has zero experience managing aircraft with limited worldwide fleets.

    Revelation wrote:
    I'm not a big fan of the whole idea that a product that doesn't meet one's own goals still has merit because it put pressure on the competition. Sure, but it also put a lot of pressure on you to carry that red ink! And then you need to figure in opportunity cost: what else could you have been doing with that time, talent and money?


    There's also the consideration of whether that product also puts pressure on some of your own products; i.e. we know that a good fraction of orders for the A330neo were conversions from the A350, and the A359 and A339 are close enough in capacity that a customer is likely to substitute if the price/economics of the A339 are better for them. And do you really care about lowering Boeing's margins on the 787 if you're damaging your own margins?

    Airbus is in a similar quandary with the A220. The -300 blows away the business case for the A319neo. A potential -500 kills the A320neo for most applications.
     
    Weatherwatcher1
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    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 4:32 pm

    chiad wrote:
    Scotron12 wrote:
    Dutchy wrote:
    A shame really, but the A330NEO was a stop-gap measure anyway. Airbus probably made some money out of the production run of around 175-200 and kept the prices of the Boeing 787 "honest'. Goal achieved.


    I think the A330neo is a lot better than most think. Covid is not helping, but most airframes, not just the A330neo, are effected.


    IMO there are only a handfull of comercial programs that is certain to make it through the next few years:
    A220
    A320Neo
    A350
    B787
    C919


    I believe you can add the 767 to the list of safe programs. It’s the only jet that I know of which hasn’t had its production rate impacted by COVID. It’s success carrying freight/fuel likely will result in the airplane continuing production more than a few years. It will certainly be ironic if the 767 remains in production longer than the A330 family since the A330 displaced passengers 767s years ago.
     
    Weatherwatcher1
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    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 4:36 pm

    ScottB wrote:
    TYWoolman wrote:
    This must make carriers like Delta on edge now wondering if the airplane they plan to rely on may go bust.


    This is probably far less of a worry right now for Delta than simply remaining in business, or at the very least staying out of bankruptcy. FWIW, with program development essentially done, it probably costs Airbus less to keep producing the remaining backlog for the customers who are able to accept deliveries than it does to pay compensation for cancelling those orders -- and it also preserves jobs. It's not as if Delta has zero experience managing aircraft with limited worldwide fleets.


    I agree remaining in business and avoiding bankruptcy are top priorities. Delta will want the A330neo to remain in production as long as possible. Delta is better suited than most airlines to fly out of production airplanes since they have a huge repair and overhaul division. However, OEM support goes down and spare part prices for up when airplanes go out of production.
     
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    enzo011
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    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 4:40 pm

    Revelation wrote:
    Based on these comments, it seems like A330neo should be collecting its participation trophy...

    I'm not a big fan of the whole idea that a product that doesn't meet one's own goals still has merit because it put pressure on the competition. Sure, but it also put a lot of pressure on you to carry that red ink! And then you need to figure in opportunity cost: what else could you have been doing with that time, talent and money?

    Are we going to claim victory for 747-8i for keeping price pressure on A380 even though neither program will never make a cent? Or maybe Boeing should have just let Airbus do what it wanted in that segment and put its money towards something really useful such as the original Yellowstone plan that had no 747-8 but did have a 737 replacement and a 777 replacement too.

    A330neo's future really relies on both the COVID recovery and on Airbus's own sense of the product's future. Personally I'm a fan of the product and can see why airlines would buy it, yet I don't know what feedback Airbus is getting from its customer base on future interest. Right now they have one of the US3, zero of the EU3 and zero of the CN3 as customers. They need to be optimistic of capturing at least another two of the big customers to have a future, IMO.


    On the bolded part, if that is what people want to claim as a silver lining they are entitled to it if this is what happened. We know the 787 was sold to HA at prices the A330neo was not prepared to match, which in hindsight with the lower production rate is going to mean even less cash for Boeing from this sale. That isn't something that will soothe Airbus shareholders, but it will make the the bean counters at Boeing frown for that sales contract.

    As for the A330neo, surely all programs being delivered now other than the A320 is in the same boat? Covid-19 has caused untold damage to airlines and this has been shared by OEMs, but the programs that has big backlogs is able to sustain cancellations until there is a recovery. I am going to assume there will be a recovery because if there isn't I am not going to be worried about sales of the 777X or A330neo, but if Boeing or Airbus will still exist.

    So the 787 and A350 should have a big enough backlog to see out the lower production rates and airline collapses until recovery. The 737 needs to get certified again to stop the bleeding but should be fine if they can get that sorted.

    The 777X and A330neo though are the two programs that are in trouble here. The only silver lining for Airbus when comparing the two are that they are not in the midst of testing the aircraft. We could end up with only 4 programs at Boeing and Airbus if there isn't a vaccine, the A320 and A350 and 737 and 787.
     
    FluidFlow
    Posts: 723
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    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 4:45 pm

    I think there will at least be two more orders that will net around 50-75 orders. As stupid as it sounds but AF will order some due to political steering just to keep a few jobs in France alive for a few more years. France is actually really good in keeping jobs in the country alive even if it is not economically sensible and there will be an order from LH-Group just because LH orders every type of aircraft ever produced. And of course as well because Germany sais so. Both airlines have now and had already before government interest in the back and said governments will do everything to preserve jobs.
     
    TYWoolman
    Posts: 617
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    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 4:45 pm

    djpearman wrote:
    I'm afraid I'm going to disagree with most comments here - I think Airbus made the right move in developing the A330neo. Sure, it's not currently selling well, but it is designed to be the direct replacement for an installed base of just under 1.5k A330ceos, most of which are still relatively young. As such, most airlines currently flying A330ceos still have several years of life left in their fleet and replacing them is still a ways away. Once it comes to replacing more existing A330s, I'm sure we'll see sales pick up. COVID has hit the aircraft market extremely hard, in particular the medium and long haul segments, and will thus have a significant negative impact on sales in the short term.

    In my opinion, Boeing made a big mistake in not re-engining the 757 and 767 in the 2000s, a time both of these were not selling well. This left a hole in Boeing's commerical passenger jet lineup. Now, we have a situation, where there's a lot of discussion about the Middle of the Market - the target market of 757 and 767 - and how airlines in particular in North America are looking for replacements. Had Boeing re-engined those aircraft, they would have strong offerings for airlines looking for aircraft in the 200 to 250 seat market.

    In a similar manner, had Airbus not re-engined the A330ceo into the A330neo, then they would have no competitive aircraft in the 250 to 280 seat widebody market and would end up ceding that market segment to Boeing completely. But as it stands now, Airbus can offer airlines flying A330ceos an easy replacement with a high degree of commonality.


    That read like a soft parachuted-landing! Hope to catch more of your comments (perhaps already have). Agreed. A330neo will be needed. We are amidst a pandemic, not armageddon!
     
    chiad
    Posts: 1330
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    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 4:47 pm

    Weatherwatcher1 wrote:
    chiad wrote:
    Scotron12 wrote:

    I think the A330neo is a lot better than most think. Covid is not helping, but most airframes, not just the A330neo, are effected.


    IMO there are only a handfull of comercial programs that is certain to make it through the next few years:
    A220
    A320Neo
    A350
    B787
    C919


    I believe you can add the 767 to the list of safe programs. It’s the only jet that I know of which hasn’t had its production rate impacted by COVID. It’s success carrying freight/fuel likely will result in the airplane continuing production more than a few years. It will certainly be ironic if the 767 remains in production longer than the A330 family since the A330 displaced passengers 767s years ago.


    The B767 has had a long and glorious life, but how many undelivered orders are left?
     
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    ssteve
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    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 4:49 pm

    Revelation wrote:
    And then you need to figure in opportunity cost: what else could you have been doing with that time, talent and money?


    Right. Disrupting middling products of competitors by forgoing the chance to release a truly disruptive (to use the business buzzword) product... that is stepping over dollars to pick up nickels.
     
    SurlyBonds
    Posts: 395
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    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 4:50 pm

    VV wrote:
    Is it due to COVID-19 or is it because of other reasons?


    Can someone explain to me the difference in the economics of the A330NEO and the A350?

    Without ever really studying the question, always been asking myself why airlines would prefer a revamped last-generation plane over a similar next-generation plane. I imagine I'm overlooking something.
     
    Weatherwatcher1
    Posts: 538
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    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 4:54 pm

    chiad wrote:
    Weatherwatcher1 wrote:
    chiad wrote:

    IMO there are only a handfull of comercial programs that is certain to make it through the next few years:
    A220
    A320Neo
    A350
    B787
    C919


    I believe you can add the 767 to the list of safe programs. It’s the only jet that I know of which hasn’t had its production rate impacted by COVID. It’s success carrying freight/fuel likely will result in the airplane continuing production more than a few years. It will certainly be ironic if the 767 remains in production longer than the A330 family since the A330 displaced passengers 767s years ago.


    The B767 has had a long and glorious life, but how many undelivered orders are left?


    The 767 has officially about 80 orders. However the orders are from a much different set of airlines that the A330neo. FedEx and UPS are highly profitable and the US government continues to spend money on defense. It’s got a smaller order book, but those are customers more likely to order more planes in the near future unlike many of the the insolvent A330neo customers.
     
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    Polot
    Posts: 10705
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    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 4:58 pm

    chiad wrote:
    Weatherwatcher1 wrote:
    chiad wrote:

    IMO there are only a handfull of comercial programs that is certain to make it through the next few years:
    A220
    A320Neo
    A350
    B787
    C919


    I believe you can add the 767 to the list of safe programs. It’s the only jet that I know of which hasn’t had its production rate impacted by COVID. It’s success carrying freight/fuel likely will result in the airplane continuing production more than a few years. It will certainly be ironic if the 767 remains in production longer than the A330 family since the A330 displaced passengers 767s years ago.


    The B767 has had a long and glorious life, but how many undelivered orders are left?

    The 767 still has about 2.5 years of backlog left at current production rates and current backlog. I would expect the USAF to continue to buy more though in batches.
     
    Weatherwatcher1
    Posts: 538
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    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 4:59 pm

    SurlyBonds wrote:
    VV wrote:
    Is it due to COVID-19 or is it because of other reasons?


    Can someone explain to me the difference in the economics of the A330NEO and the A350?

    Without ever really studying the question, always been asking myself why airlines would prefer a revamped last-generation plane over a similar next-generation plane. I imagine I'm overlooking something.


    Aquisition costs. Earlier a post shared A330neo lease rates being at 783K per month. A350 lease rates range from 800K to 1.1M. For an airline that doesn’t need the range and performance that the A350 offers, the lower lease payments are attractive.

    viewtopic.php?t=1440991
     
    marcelh
    Posts: 1042
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    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 5:41 pm

    FluidFlow wrote:
    I think there will at least be two more orders that will net around 50-75 orders. As stupid as it sounds but AF will order some due to political steering just to keep a few jobs in France alive for a few more years. France is actually really good in keeping jobs in the country alive even if it is not economically sensible and there will be an order from LH-Group just because LH orders every type of aircraft ever produced. And of course as well because Germany sais so. Both airlines have now and had already before government interest in the back and said governments will do everything to preserve jobs.

    You are exaggerating the case of AF. If true, they wouldn’t have ordered their massive B777 fleet.
     
    FluidFlow
    Posts: 723
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    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 6:27 pm

    marcelh wrote:
    FluidFlow wrote:
    I think there will at least be two more orders that will net around 50-75 orders. As stupid as it sounds but AF will order some due to political steering just to keep a few jobs in France alive for a few more years. France is actually really good in keeping jobs in the country alive even if it is not economically sensible and there will be an order from LH-Group just because LH orders every type of aircraft ever produced. And of course as well because Germany sais so. Both airlines have now and had already before government interest in the back and said governments will do everything to preserve jobs.

    You are exaggerating the case of AF. If true, they wouldn’t have ordered their massive B777 fleet.


    The 777 and 339 do not play in the same leage and AF needs something smaller than the 777 and A350.

    Now they have a handfull of 787s but there are still 15? 332 to replace at one point and AF was launch customer to the 77W so some are getting older. Over time the 350s will replace more 77Ws and certain routes might get reduced in capacity. It could be more 787s but there is a pilot pool for 330 family aircrafts aswell. So the option exists and I think AF will order a few ~20 in the next 3 years. Lufthansa will order around 50 for their group to replace aircraft at LX, WK and LH. The 343s need replacement at some point and they will not want them on 777 paylevel so keeping them with the 330 will be the choice. Thats my view on it but i cant see the 787 at LX or WK.
     
    Antarius
    Posts: 2496
    Joined: Thu Apr 13, 2017 1:27 pm

    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 6:40 pm

    Opus99 wrote:
    tommy1808 wrote:
    Opus99 wrote:
    Airbus hoped to sell 1000 a330neo's but yeah sure goal achieved


    That wasn´t Dutchy´s point though. Airbus spend 2 billion on the program, so probably will be ok with not capturing the market they saw, and might even end up with a black zero for the program. However, they gave the 787 a competitor that Boeing had to counter with discounts, which may lead to Boeing not making a single $ on what is shaping up to be the most successful wide body program in terms of quantity. Which at least was a side goal, as it dampens the desire to fund moonshot programs going forward. Also, there are probably few people outside of Airbus that know how many customers came in with an inquiry about the A330neo, and walked out with an A359 order..... or went for an A321neoLR/XLR

    But yeah, orders have been underwhelming.

    best regards
    Thomas

    I understand your point completely. But there’s not capturing the market you envisioned maybe 500 orders cool but it’s basically half that when you take our Iran air and air Asia X. Maybe they’ll break even on it but I don’t think we should pretend like the plan was to just keep 787 prices honest, like the honest pricing makes a difference to the accounts of Airbus. Especially when you consider how many it’s predecessor sold


    Its not materially different than the 747-8i. Relatively cheap derivative that keeps pricing pressure on the competition while picking up a few orders on the way. If Airbus had not built the a330neo they would have conceded the midsize widebody segment to Boeing completely. Similarly, if Boeing had not built the 8i, the VLA segment would have been just the a380.

    IMO, mission accomplished.
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    VV
    Posts: 1859
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    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 6:55 pm

    SurlyBonds wrote:
    VV wrote:
    Is it due to COVID-19 or is it because of other reasons?


    Can someone explain to me the difference in the economics of the A330NEO and the A350?

    Without ever really studying the question, always been asking myself why airlines would prefer a revamped last-generation plane over a similar next-generation plane. I imagine I'm overlooking something.


    As of today, if you have the choice between eight years old A330-300, new A350-900 or new A330-900 to operate on lease, the most economical is the A330-300.

    In addition, you can probably have shorter lease term, say of 4 years, that would make risk management easier too.
    New aircraft are usually offered with longer lease term of 8 to 12 years.
     
    Strato2
    Posts: 557
    Joined: Sat Sep 24, 2016 3:52 pm

    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 7:14 pm

    VV wrote:
    That's an interesting and very optimistic point of view.


    Funny comment from a guy who thinks 777X will sell 1000.
     
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    Revelation
    Posts: 24589
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    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 7:20 pm

    Antarius wrote:
    Its not materially different than the 747-8i. Relatively cheap derivative that keeps pricing pressure on the competition while picking up a few orders on the way. If Airbus had not built the a330neo they would have conceded the midsize widebody segment to Boeing completely. Similarly, if Boeing had not built the 8i, the VLA segment would have been just the a380.

    IMO, mission accomplished.

    IMO, what's not materially different is that Boeing thought it'd get more orders for 747-8i and Airbus thought they'd get more orders for A330neo, so I don't think anyone at those companies are patting themselves on the back.

    IMO, they create business cases on the program's revenue opportunities vs cost and not on what potential damage they do to their competitor's pricing strategy. I doubt they can create entries in their books for presumed impairment of their competitor's pricing strategy, nor can managers claim bonuses for such.

    ScottB wrote:
    FWIW, with program development essentially done, it probably costs Airbus less to keep producing the remaining backlog for the customers who are able to accept deliveries than it does to pay compensation for cancelling those orders -- and it also preserves jobs.

    True. Same can be said for Rolls Royce. They will do something similar as what Boeing did with 747-8, keep the line rolling to meet commitments and hope that some day someone decides it's the right plane for them till it's abundantly clear that isn't going to happen. Given this, I would not say A330neo's future is bleak, but it is under duress. It is still possible that circumstances may change in its favor. I hope it does, it's one of my favorite types. On the other hand, COVID has really made the wide body order bubble burst, and I bet many of those orders from leasing firms are relatively easy to cancel or indefinitely defer.
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    Antaras
    Posts: 898
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    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 7:41 pm

    VV wrote:
    Weatherwatcher1 wrote:
    VV wrote:
    Is it due to COVID-19 or is it because of other reasons?

    I am not sure it has been wildly popular since the beginning.


    COVID probably accelerated the problem. Airbus had been marketing the A330neo as a cheaper widebody to airlines less financially stable. It’s leasing rates were already pretty low.

    viewtopic.php?t=1374235#p19827945


    It is not necessarily a good thing to bet on airlines that are financially less stable.

    Unfortunately that was what Airbus has chosen: marketing the A330neo as a "cheap and affordable" widebodies for LCCs and financially-weak carriers, leaving the fact that most of the "wealthy" carriers go with the "luxury" 787.

    A330neo customer list [except lessors]:
    Delta
    AirAsia X
    TAP
    Garuda Ind
    Arkia
    Iran Air (yeeted)
    Aircalin
    Air Senegal
    Kuwait Airw'
    MEA
    Uganda Airl'
    Virgin Atl'
    Lion Air
    Cebu Pacific

    While with the 787: Scoot and Norwegian are the only LCCs, other are all legacy carriers.

    Bad marketing from the position of Airbus. That's when you created a iPhone 11 Pro Max and you were targeting on customers who could only afford for a Samsung Galaxy A and letting the Galaxy S/Note grab all of your customers :(
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    User avatar
    Antaras
    Posts: 898
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    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 8:16 pm

    djpearman wrote:
    I'm afraid I'm going to disagree with most comments here - I think Airbus made the right move in developing the A330neo. Sure, it's not currently selling well, but it is designed to be the direct replacement for an installed base of just under 1.5k A330ceos, most of which are still relatively young. As such, most airlines currently flying A330ceos still have several years of life left in their fleet and replacing them is still a ways away. Once it comes to replacing more existing A330s, I'm sure we'll see sales pick up. COVID has hit the aircraft market extremely hard, in particular the medium and long haul segments, and will thus have a significant negative impact on sales in the short term.

    In my opinion, Boeing made a big mistake in not re-engining the 757 and 767 in the 2000s, a time both of these were not selling well. This left a hole in Boeing's commerical passenger jet lineup. Now, we have a situation, where there's a lot of discussion about the Middle of the Market - the target market of 757 and 767 - and how airlines in particular in North America are looking for replacements. Had Boeing re-engined those aircraft, they would have strong offerings for airlines looking for aircraft in the 200 to 250 seat market.

    In a similar manner, had Airbus not re-engined the A330ceo into the A330neo, then they would have no competitive aircraft in the 250 to 280 seat widebody market and would end up ceding that market segment to Boeing completely. But as it stands now, Airbus can offer airlines flying A330ceos an easy replacement with a high degree of commonality.


    Yes the A330neo was Airbus' right move.
    The problem is that Airbus moved too late.
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    flyingclrs727
    Posts: 2619
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    Re: A330neo future bleak from COVID impact

    Mon Aug 17, 2020 8:59 pm

    ewt340 wrote:
    I think It's time for Airbus to start thinking about A310, A300 and A330neo replacements.


    That's the A321XLR.

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