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VV
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Re: Future of the A319NEO in Airbus portfolio

Sat Sep 18, 2021 10:45 am

WayexTDI wrote:
VV wrote:
WayexTDI wrote:
You have insider information?

I do not even remember what that was all about, but yes, I am sure about it.

So, you're sure Airbus hasn't punched in the numbers and make decisions "just like that"?

....


I am pretty sure they decided to make a common cockpit between the A220 and A320neo for many reasons.

Do they need to do the number crunching? I do not think so because it really is straightforward.

The conclusion is so obvious. I would not consider Airbus guys dumb enough to needing number crunching to come to that conclusion.
 
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Re: Future of the A319NEO in Airbus portfolio

Sat Sep 18, 2021 11:47 am

Seems analogous to the A338 situation: slow selling member of the family yet still has a specific role. Already paid for design, test and certification so no point to canceling it. Will accept orders but won't go out of their way to sell it. Each one sold will bring in both initial and lifetime positive cash flow so it's all for the good.
 
FluidFlow
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Re: Future of the A319NEO in Airbus portfolio

Sat Sep 18, 2021 12:57 pm

VV wrote:
Taxi645 wrote:
Like the A320, the A319 could've used a two row stretch when they went NEO. It would not have sold great, but probably at least some. In hindsight there would've been less overlap with the A223 as well.


I think you are right.

Boeing decided to move up by stretching the 737-7 and also by offering the 737-10.

The A319neo and the A320neo should have been stretched by about two seat rows.


I disagree with that. I think Airbus wanted to keep the transition from ceo to neo as simple as possible. No complexity added „just a change of engines“ was the goal to keep it simple. Thats why we have not seen any big changes at all until now. With the introduction of the XLR many changes are comming but up to then it was all a slow and steady process of changing little bits from time to time. A stretch would have meant a lot of changes on top of the new engine.

Turns out it was good to keep everything the same, certification was quick and it seems the NEO has no flaws or problems what I attribute to the fact that the solid ceo design was not changed.
 
VV
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Re: Future of the A319NEO in Airbus portfolio

Sat Sep 18, 2021 5:36 pm

FluidFlow wrote:
VV wrote:
Taxi645 wrote:
Like the A320, the A319 could've used a two row stretch when they went NEO. It would not have sold great, but probably at least some. In hindsight there would've been less overlap with the A223 as well.


I think you are right.

Boeing decided to move up by stretching the 737-7 and also by offering the 737-10.

The A319neo and the A320neo should have been stretched by about two seat rows.


I disagree with that. I think Airbus wanted to keep the transition from ceo to neo as simple as possible. No complexity added „just a change of engines“ was the goal to keep it simple. Thats why we have not seen any big changes at all until now. With the introduction of the XLR many changes are comming but up to then it was all a slow and steady process of changing little bits from time to time. A stretch would have meant a lot of changes on top of the new engine.

Turns out it was good to keep everything the same, certification was quick and it seems the NEO has no flaws or problems what I attribute to the fact that the solid ceo design was not changed.


That's a good thing that you disagree.
It seems Airbus was in agreement with your rationale.

This being said, it is not necessarily a good sign when you certify a version with two engines and then achieve such a slow sales.
Seriously, it is not my problem. They can spend as much money as they want. It's not mine.

I only find it curious they spent so much effort on the A319neo and A320neo only to discover that the market seems to like the A321 instead.

It is well known that the 737-800 can accommodate between one to two extra seat rows. In my opinion it would have been wise to close the gap when they launched the A320neo.

Again, it is not my problem and Airbus can do whatever they want.
 
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scbriml
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Re: Future of the A319NEO in Airbus portfolio

Sat Sep 18, 2021 6:13 pm

VV wrote:
I only find it curious they spent so much effort on the A319neo and A320neo only to discover that the market seems to like the A321 instead.


With total neo sales of over 7,500, I'm sure Airbus thinks the effort was well spent and is laughing all the way to the bank. The market likes the A321 as well as the A320, not instead of. For reference/education - total A320 sales = 8,617, total A321 sales = 5,434.

What were they thinking? :rotfl:
 
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Taxi645
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Re: Future of the A319NEO in Airbus portfolio

Sun Sep 19, 2021 11:19 am

scbriml wrote:
VV wrote:
I only find it curious they spent so much effort on the A319neo and A320neo only to discover that the market seems to like the A321 instead.


With total neo sales of over 7,500, I'm sure Airbus thinks the effort was well spent and is laughing all the way to the bank. The market likes the A321 as well as the A320, not instead of. For reference/education - total A320 sales = 8,617, total A321 sales = 5,434.

What were they thinking? :rotfl:


Of course that is true. However putting models into the market that don't sell (now talking specifically about the A319NEO), does not really indicate a smart use of resources nor a very keen understanding of the market and it's customers need and considerations. Something which never really does really look good on a manufacturer.

But indeed, not the biggest problem to have. Although of course the MAX drama in hindsight gave Airbus an even easier ride.
 
MIflyer12
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Re: Future of the A319NEO in Airbus portfolio

Sun Sep 19, 2021 11:41 am

Taxi645 wrote:
However putting models into the market that don't sell (now talking specifically about the A319NEO), does not really indicate a smart use of resources nor a very keen understanding of the market and it's customers need and considerations. Something which never really does really look good on a manufacturer.


One would really need to look at the incremental design/tooling/certification costs of the 319neo on top of the 320/321neo work. I suspect it was small money.
 
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scbriml
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Re: Future of the A319NEO in Airbus portfolio

Sun Sep 19, 2021 11:48 am

MIflyer12 wrote:
Taxi645 wrote:
However putting models into the market that don't sell (now talking specifically about the A319NEO), does not really indicate a smart use of resources nor a very keen understanding of the market and it's customers need and considerations. Something which never really does really look good on a manufacturer.


One would really need to look at the incremental design/tooling/certification costs of the 319neo on top of the 320/321neo work. I suspect it was small money.


Exactly this. The incremental cost to certify the A319neo was negligible when considering total neo sales.
 
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Re: Future of the A319NEO in Airbus portfolio

Sun Sep 19, 2021 1:48 pm

scbriml wrote:
MIflyer12 wrote:
Taxi645 wrote:
However putting models into the market that don't sell (now talking specifically about the A319NEO), does not really indicate a smart use of resources nor a very keen understanding of the market and it's customers need and considerations. Something which never really does really look good on a manufacturer.

One would really need to look at the incremental design/tooling/certification costs of the 319neo on top of the 320/321neo work. I suspect it was small money.

Exactly this. The incremental cost to certify the A319neo was negligible when considering total neo sales.

I think we're all in agreement that the "issue" at best is one of aesthetics.
 
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keesje
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Re: Future of the A319NEO in Airbus portfolio

Sun Sep 19, 2021 4:04 pm

With Spirit going for A320/A321NEO's, China Southern apparently also having converted their A319NEO order, Air Cote d'Ivor taking a A320NEO and the rest of the backlog being Undisclosed, the chances w'll ever see an airline operating A319NEO's seems small. The A319NEO was launched in 2010, the market situation changed since then.

The A318 & A350-800 order books were rich in comparison. I think Airbus is ok with the situation.

Waiting for an Air Cote d'Ivor A319/A320NEO conversion announcement. Probably at low/ no additional costs for them.

https://www.airbus.com/content/dam/corp ... craft.xlsx

Image
AIRBUS.COM
 
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Polot
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Re: Future of the A319NEO in Airbus portfolio

Sun Sep 19, 2021 4:38 pm

keesje wrote:
With Spirit going for A320/A321NEO's, China Southern apparently also having converted their A319NEO order, Air Cote d'Ivor taking a A320NEO and the rest of the backlog being Undisclosed, the chances w'll ever see an airline operating A319NEO's seems small. The A319NEO was launched in 2010, the market situation changed since then.

China Southern’s A319neo have never been identified on Airbus Orders and Deliveries page. Just look at the January 2020 sheet. Considering this past spring (2021) Airbus went through the trouble of building one and painting it in CZ livery though that would suggest the undisclosed order is from China…
 
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Re: Future of the A319NEO in Airbus portfolio

Sun Sep 19, 2021 6:29 pm

keesje wrote:
the chances w'll ever see an airline operating A319NEO's seems small.

Which if so means nothing with respect to the "Future of the A319NEO in Airbus portfolio" -- clearly it'll still be orderable till the end of the NEO production run.
 
VV
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Re: Future of the A319NEO in Airbus portfolio

Sun Sep 19, 2021 7:58 pm

scbriml wrote:
VV wrote:
I only find it curious they spent so much effort on the A319neo and A320neo only to discover that the market seems to like the A321 instead.


With total neo sales of over 7,500, I'm sure Airbus thinks the effort was well spent and is laughing all the way to the bank. The market likes the A321 as well as the A320, not instead of. For reference/education - total A320 sales = 8,617, total A321 sales = 5,434.

What were they thinking? :rotfl:


Yes, that's why there is this question of this A319neo's future because it has only so few orders and only 3 (three) have been delivered since its certification in 2019.

What were they thinking about the A319neo?????????
 
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NWAROOSTER
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Re: Future of the A319NEO in Airbus portfolio

Sun Sep 19, 2021 8:53 pm

The A319 NEO still has a place with major airlines, especially those that have the A319 and A320, either version. The A319 is six abreast while the A220 is only five abreast. Airlines like Delta are buying the A220 as they are replacing the 717 and sometime down the line will be replacing their A319s. Delta will fly their A319s and A320s until the wings start falling off. Delta did start buying the A350 as they had a small fleet of 777s and probably got good money for on the secondary market. Airbus has made two major mistakes with aircraft develop and sales. One is the A318 which is a shrink of the A319 and A320. That aircraft is too heavy and really was too much of a shrink and probably has too high of an operating cost. The other is the A380 was is too large for too many airports to handle and needed to be nearly full to make a profit. Emirate was was the only large purchaser and ussd it to fly from it's hub at Dubai to select international airports. It was a teaching and learning experience for Airbus to use on it's other aircraft it is now building. So that is one help for Airbus which was trying to take a wack at Boeing's 747. :old:
 
VV
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Re: Future of the A319NEO in Airbus portfolio

Sun Sep 19, 2021 9:57 pm

NWAROOSTER wrote:
The A319 NEO still has a place with major airlines, especially those that have the A319 and A320, either version. The A319 is six abreast while the A220 is only five abreast. Airlines like Delta are buying the A220 as they are replacing the 717 and sometime down the line will be replacing their A319s. ....


Is that the reason why there are only 73 and only 3 (three) nave been delivered so far?
 
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scbriml
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Re: Future of the A319NEO in Airbus portfolio

Sun Sep 19, 2021 10:09 pm

VV wrote:
scbriml wrote:
VV wrote:
I only find it curious they spent so much effort on the A319neo and A320neo only to discover that the market seems to like the A321 instead.


With total neo sales of over 7,500, I'm sure Airbus thinks the effort was well spent and is laughing all the way to the bank. The market likes the A321 as well as the A320, not instead of. For reference/education - total A320 sales = 8,617, total A321 sales = 5,434.

What were they thinking? :rotfl:


Yes, that's why there is this question of this A319neo's future because it has only so few orders and only 3 (three) have been delivered since its certification in 2019.

What were they thinking about the A319neo?????????


I'm glad we're agreed that Airbus certifying the A320neo wasn't a wasted effort. :lol:

As for the A319neo, I'm not sure why you're confused. It's certified and available to anyone that wants it. The small amount of additional money to certify the A319neo has been spent, so where's the problem? From reading your posts, one is tempted to conclude that you want to see a problem where there isn't one.

Next you'll be claiming the neo was launched too soon and the backlog is too big.
 
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keesje
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Re: Future of the A319NEO in Airbus portfolio

Mon Sep 20, 2021 6:34 am

VV wrote:
scbriml wrote:
VV wrote:
I only find it curious they spent so much effort on the A319neo and A320neo only to discover that the market seems to like the A321 instead.


With total neo sales of over 7,500, I'm sure Airbus thinks the effort was well spent and is laughing all the way to the bank. The market likes the A321 as well as the A320, not instead of. For reference/education - total A320 sales = 8,617, total A321 sales = 5,434.

What were they thinking? :rotfl:


Yes, that's why there is this question of this A319neo's future because it has only so few orders and only 3 (three) have been delivered since its certification in 2019.

What were they thinking about the A319neo?????????


A review of the available CSeries and PW1000 specifications/ tests, made Airbus take the combination very serious from the start. Some say it was a major incentive to launch the NEO. Of course including the 150 seat A319NEO.
 
VV
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Re: Future of the A319NEO in Airbus portfolio

Mon Sep 20, 2021 7:39 am

keesje wrote:
VV wrote:
scbriml wrote:

With total neo sales of over 7,500, I'm sure Airbus thinks the effort was well spent and is laughing all the way to the bank. The market likes the A321 as well as the A320, not instead of. For reference/education - total A320 sales = 8,617, total A321 sales = 5,434.

What were they thinking? :rotfl:


Yes, that's why there is this question of this A319neo's future because it has only so few orders and only 3 (three) have been delivered since its certification in 2019.

What were they thinking about the A319neo?????????


A review of the available CSeries and PW1000 specifications/ tests, made Airbus take the combination very serious from the start. Some say it was a major incentive to launch the NEO. Of course including the 150 seat A319NEO.


That's a very nice talking point.

However, if you examine the reality, it does not stand the straight face check.

The PW110G-JM powered A319neo was certified in December 2019 and none has been delivered so far.
The Leap-1A version got its type certificate in late 2018 and only 3 (three) have been delivered so far.

Airbus indeed took over the C Series in July 2018 and even increased their stake in the program to 75% in February 2020. That's good for them.
Since then, the production rate of the A220 stagnated at about 4 to 5 units per month.

The question is obviously on the reality of the market of 100-130 seat aircraft. What if the market is not big enough to make two offers from the same aircraft manufacturer?

The market is very crowded and there a plethora of offers in that segment, from the E190-E2 in the smaller side of the spectrum up to the 737-7 at the bigger capacity side of the spectrum.

How do A220-100/PW1500G, A220-300/PW1500G, A319neo/PW110G-JM and A319neo Leap-1A play in that market segment?
How would Airbus deal fairly with all the engine manufacturers in that group of Airbus aircraft?

That's the kind of questions that people need to ask themselves.
 
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keesje
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Re: Future of the A319NEO in Airbus portfolio

Mon Sep 20, 2021 8:44 am

85% of CS/A220 orders are for A220-300s, seating close to 150 seats, mostly for large mainline operators.

It seems Airbus saw the threat and didn't fall for the seducing BBD "110-130 seat regional" communications of the early days.

Engines choice for the NEO are up to the airlines. RE: E2 jets, it seems the A220-100 will be struggling against them.


Polot wrote:
keesje wrote:
With Spirit going for A320/A321NEO's, China Southern apparently also having converted their A319NEO order, Air Cote d'Ivor taking a A320NEO and the rest of the backlog being Undisclosed, the chances w'll ever see an airline operating A319NEO's seems small. The A319NEO was launched in 2010, the market situation changed since then.

China Southern’s A319neo have never been identified on Airbus Orders and Deliveries page. Just look at the January 2020 sheet. Considering this past spring (2021) Airbus went through the trouble of building one and painting it in CZ livery though that would suggest the undisclosed order is from China…


If the 30 undisclosed A319NEO are for China Southern, that will be interesting. China domestic tends to prefer capacity over niche market optimization.
 
VV
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Re: Future of the A319NEO in Airbus portfolio

Mon Sep 20, 2021 9:55 am

keesje wrote:
85% of CS/A220 orders are for A220-300s, seating close to 150 seats, mostly for large mainline operators.

It seems Airbus saw the threat and didn't fall for the seducing BBD "110-130 seat regional" communications of the early days.

Engines choice for the NEO are up to the airlines. RE: E2 jets, it seems the A220-100 will be struggling against them.
...


While the engine choice is indeed the choice of the airline, you need to take into account the contractual agreement between Airbus and the engine manufacturers.

Let us look carefully into the situation of the A220 and A319neo.

For some unexplained reasons, the "owner" of the PW1100G-JM (A319neo) is International Aero Engines and that of the PW1500G (A220) is Pratt & Whitney.
I understand the argument that it is not a "big deal". I would like to say that it is important to note that the engine contract for PW1100G-JM is between Airbus and IAE, whereas the legally biding contract of the PW1500G is between Bombardier (then transferred to Airbus Canada Limited Partnership) and Pratt & Whitney.

It means that the A220 and A310neo have three different legally binding contracts.
  • Pratt & Whitney with Airbus Canada Limited Partnership for A220
  • International Aero Engines with Airbus for A319neo/PW1100G-JM
  • CFM International for A319neo/Leap-1A

I would not underestimate the complexity of relationship between those parties and a potential customer of any of those aircraft.

In my opinion, the A319neo's engine situation is not helping its sales in the future, just because it is difficult for Airbus to deal with all those engine owners fairly.

Think calmly about the above before making another comment.

Links for PW1100G-JM and PW1500G
https://www.easa.europa.eu/sites/defaul ... e%2007.pdf
https://www.easa.europa.eu/sites/defaul ... 210224.pdf
 
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vfw614
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Airbus having to sell A220-300s & A319s - 1970s Fokker/VFW dilemma revisited?

Mon Sep 20, 2021 10:37 am

The Airbus sales team has been faced with the situation of having to sell the "adopted" A220-300 and the "in-house" A319neo which are, to some extent, targeting overlapping markets (this has been discussed ad nauseam here on a.net). This situation reminds me of the 1970s situation when German manufacturer VFW and Dutch manufacturer Fokker merged, with Fokker dominating the new company. The VFW/Fokker sales team was faced with the challenge of having to sell the newly developed 44/48 seat VFW614 jet and the new, slightly larger "Fokker 28-1000NG" aka Fokker 28-3000.

Until this day, the Germans argue that the Dutch-led sales department killed off the "adopted" VFW614 by, consciously or unconsciously biased, always giving preference to the Fokker 28 in sales pitches, even when the VFW64 was the more optimized aircraft (the VFW614 was a lighter jet more optimized for regional flying). Probably that also had to do with the fact that it is always easier to sell a product you have been working with for more than a decade than a product that sort of has been put on your shelf overnight.

Before that background, I was wondering if the A220-300 as the "adpoted" family member is facing similar challenges- that said, does anybody know how the Airbus narrowbody sales team looks like - are the some senior ex Bombardier sales exces on board?

The pictures below, btw, neatly illustrates the problem - the Fokker 28 is in fact a Cimber Air aircraft, the airline that was the launch customer of the VFW614. When the programme was cancelled, VFW/Fokker bought back the VFW614s and sold Cimber Air two Fokker 28-3000 that quickly turned out to be unsuitable for the routes the VFW614s has covered. Cimber leased them out to Saudia initially and later to EastWest, never perating them in earnest on their own routes.

 
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Re: Airbus having to sell A220-300s & A319s - 1970s Fokker/VFW dilemma revisited?

Mon Sep 20, 2021 11:51 am

vfw614 wrote:
The Airbus sales team has been faced with the situation of having to sell the "adopted" A220-300 and the "in-house" A319neo which are, to some extent, targeting overlapping markets (this has been discussed ad nauseam here on a.net). This situation reminds me of the 1970s situation when German manufacturer VFW and Dutch manufacturer Fokker merged, with Fokker dominating the new company. The VFW/Fokker sales team was faced with the challenge of having to sell the newly developed 44/48 seat VFW614 jet and the new, slightly larger "Fokker 28-1000NG" aka Fokker 28-3000.



Purely for the sake of aviation history, herewith the correct aircraft names:

Fokker aircraft are named as follows:

- Fokker F27 Friendship (series -100, -200, -300, -400, -500, -600, -700 + Fairchild produced aircraft in the USA)
- Fokker F28 Fellowship (series -Mk1000, -Mk2000, -Mk3000, -Mk4000, -Mk6000)
- Fokker 50
- Fokker 60
- Fokker 70
- Fokker 100

So a clear distinction between Fokker's historic use of the 'F' in aircraft names (1918-1983) and the none "F" names for the last series of Fokker aircraft (1983-1996).

https://www.fokker-history.com/

And "Yes" the Fokker 100 was in reality certified as a Fokker F28-Mk100.
 
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seahawk
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Re: Future of the A319NEO in Airbus portfolio

Mon Sep 20, 2021 11:52 am

Exactly what is the problem Airbus faces?

- airlines order an A320 instead -> no problem
- airlines order an A223 instead -> no problem
- airlines order an A319NEO -> still no problem

The only problem would be if airlines decide that the missing A319 makes them order 737s.
 
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Re: Airbus having to sell A220-300s & A319s - 1970s Fokker/VFW dilemma revisited?

Mon Sep 20, 2021 12:16 pm

This was a “plausibly deniable” acquisition of a competitive threat, so the threat could be controlled, starved, and made to linger for a few years, without harming Airbus A320 revenue (which is the backbone of the company.)

I wish that Airbus were motivated to make the A220 a success. They can also use the platform to keep Embraer in line. In other words, Airbus uses the A220 as a competitive tool, not as a key business, imo
 
VV
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Re: Future of the A319NEO in Airbus portfolio

Mon Sep 20, 2021 12:30 pm

seahawk wrote:
Exactly what is the problem Airbus faces?

- airlines order an A320 instead -> no problem
- airlines order an A223 instead -> no problem
- airlines order an A319NEO -> still no problem

The only problem would be if airlines decide that the missing A319 makes them order 737s.


THe problem is that Airbus has already spent hundreds of million dollars to certify the A319neo and yet they have only 73 orders and so far only 3 (three) have been delivered.

I understand your point about the fact the effort has been spent and thus any order for A319neo allows to reduce the regret having certified the A319neo.

This being said, I think neither IAE (PW1100G-JM) nor CFM Internation (Leap-1A) would be willing to make further concession on their engines. On the other hand we also know that A319neo is sold at a much lower pricing than the A320neo when the production cost is quite similar.

Hence, it would be stupid for Airbus to try selling more A319neo.
Hence the question asked by the original poster about the future of the A319neo in Airbus portfolio when the A220 is perceptible less expensive and easier to sell.
https://www.airbus.com/content/dam/corp ... s-2018.pdf

It is clear that A319neo does not have much future in the configuration where the aircraft have two engine manufacturers and there is also A220-300 in the same category.

Why did they proceed with the A319neo certification when they already acquired the C Series? I think that's the real reason of the question asked by the original poster.
 
VV
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Re: Airbus having to sell A220-300s & A319s - 1970s Fokker/VFW dilemma revisited?

Mon Sep 20, 2021 12:38 pm

LCDFlight wrote:
This was a “plausibly deniable” acquisition of a competitive threat, so the threat could be controlled, starved, and made to linger for a few years, without harming Airbus A320 revenue (which is the backbone of the company.)

I wish that Airbus were motivated to make the A220 a success. They can also use the platform to keep Embraer in line. In other words, Airbus uses the A220 as a competitive tool, not as a key business, imo


What if the A220-300 is more attractive than the A319neo?
Does it mean Airbus deliberately diminishes the chance of A319neo to become more successful than it is today?

And why did they proceed to certify them knowing that the A220-300 would be more attractive?

We need to ask more questions to ourselves as why there are now three airframe/engine combination offered by Airbus in the same space.

As for the E2 is concerned, it is in a different category, albeit in proximity of the A220. Let us never forget that the E2's maximum range is "only" 2,500 nautical miles whereas the A220's maximum range is in excess of 3,500 nautical miles.
 
FluidFlow
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Re: Future of the A319NEO in Airbus portfolio

Mon Sep 20, 2021 12:40 pm

VV wrote:
seahawk wrote:
Exactly what is the problem Airbus faces?

- airlines order an A320 instead -> no problem
- airlines order an A223 instead -> no problem
- airlines order an A319NEO -> still no problem

The only problem would be if airlines decide that the missing A319 makes them order 737s.


THe problem is that Airbus has already spent hundreds of million dollars to certify the A319neo and yet they have only 73 orders and so far only 3 (three) have been delivered.

I understand your point about the fact the effort has been spent and thus any order for A319neo allows to reduce the regret having certified the A319neo.

This being said, I think neither IAE (PW1100G-JM) nor CFM Internation (Leap-1A) would be willing to make further concession on their engines. On the other hand we also know that A319neo is sold at a much lower pricing than the A320neo when the production cost is quite similar.

Hence, it would be stupid for Airbus to try selling more A319neo.

Hence the question asked by the original poster about the future of the A319neo in Airbus portfolio when the A220 is perceptible less expensive and easier to sell.
https://www.airbus.com/content/dam/corp ... s-2018.pdf

It is clear that A319neo does not have much future in the configuration where the aircraft have two engine manufacturers and there is also A220-300 in the same category.

Why did they proceed with the A319neo certification when they already acquired the C Series? I think that's the real reason of question from the original poster.


Why should IAE or CFM have a problem with the A319neo? The PW1100G-JM comes in different thrust classes 22/24/27/30/33 (eg. a PW1124G-JM has 24lbf/147kN thrust) but other than that it is the exact same engine so it does not make a difference if Airbus sells a 321neo or a 319neo, IAE sells a PW1100G-JM engine (two actually).

The same goes for the LEAP-1A. The fact that the A319neo is certified and exists actually increases revenue potential for said engine manufacturers without any drawback. Even the manuals are all the same:

V. Operating and Service Instructions
Engine Maintenance Manual: PN 5316994 for all PW1100G-JM models
Engine Manual: PN 5316992 for all PW1100G-JM models
Airworthiness Limitations Manual: PN 5316993 for all PW1100G-JM models
Clean, Inspect and Repair Manual: PN 5315653 for all PW1100G-JM models
Installation and Operating Manual: PWA-9851 for all PW1100G-JM models
PWA-9914 for all PW1400G-JM models

So there seems no difference and for the engine manufacturers all the other parts are non-relevant. In fact CFM delivered 6 more engines (3x319neo) because the A319 was on offer.
 
LCDFlight
Posts: 1256
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Re: Airbus having to sell A220-300s & A319s - 1970s Fokker/VFW dilemma revisited?

Mon Sep 20, 2021 12:48 pm

VV wrote:
LCDFlight wrote:
This was a “plausibly deniable” acquisition of a competitive threat, so the threat could be controlled, starved, and made to linger for a few years, without harming Airbus A320 revenue (which is the backbone of the company.)

I wish that Airbus were motivated to make the A220 a success. They can also use the platform to keep Embraer in line. In other words, Airbus uses the A220 as a competitive tool, not as a key business, imo


What if the A220-300 is more attractive than the A319neo?
Does it mean Airbus deliberately diminishes the chance of A319neo to become more successful than it is today?

And why did they proceed to certify them knowing that the A220-300 would be more attractive?

We need to ask more questions to ourselves as why there are now three airframe/engine combination offered by Airbus in the same space.

As for the E2 is concerned, it is in a different category, albeit in proximity of the A220. Let us never forget that the E2's maximum range is "only" 2,500 nautical miles whereas the A220's maximum range is in excess of 3,500 nautical miles.


My understanding is, because of Airbus strategic decisions, A220 is "more expensive to make" than A319. So... is the A220 more attractive to the customer who must pay?

And needless to say, Airbus does not seem to be certifying the A220-500. This adds billions of dollars in value to the A320 platform. Value that would have been destroyed if the A220-500 had been built at scale.
 
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keesje
Topic Author
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Re: Future of the A319NEO in Airbus portfolio

Mon Sep 20, 2021 1:08 pm

VV wrote:
keesje wrote:
85% of CS/A220 orders are for A220-300s, seating close to 150 seats, mostly for large mainline operators.

It seems Airbus saw the threat and didn't fall for the seducing BBD "110-130 seat regional" communications of the early days.

Engines choice for the NEO are up to the airlines. RE: E2 jets, it seems the A220-100 will be struggling against them.
...


While the engine choice is indeed the choice of the airline, you need to take into account the contractual agreement between Airbus and the engine manufacturers.

Let us look carefully into the situation of the A220 and A319neo.

For some unexplained reasons, the "owner" of the PW1100G-JM (A319neo) is International Aero Engines and that of the PW1500G (A220) is Pratt & Whitney.
I understand the argument that it is not a "big deal". I would like to say that it is important to note that the engine contract for PW1100G-JM is between Airbus and IAE, whereas the legally biding contract of the PW1500G is between Bombardier (then transferred to Airbus Canada Limited Partnership) and Pratt & Whitney.

It means that the A220 and A310neo have three different legally binding contracts.
  • Pratt & Whitney with Airbus Canada Limited Partnership for A220
  • International Aero Engines with Airbus for A319neo/PW1100G-JM
  • CFM International for A319neo/Leap-1A

I would not underestimate the complexity of relationship between those parties and a potential customer of any of those aircraft.

In my opinion, the A319neo's engine situation is not helping its sales in the future, just because it is difficult for Airbus to deal with all those engine owners fairly.

Think calmly about the above before making another comment.

Links for PW1100G-JM and PW1500G
https://www.easa.europa.eu/sites/defaul ... e%2007.pdf
https://www.easa.europa.eu/sites/defaul ... 210224.pdf


I think Airbus & the airlines would be fine without the A319NEO and all it's possible engine contractual complications. And I think it might be heading tin that direction.

Looking at China Southern, maybe now the spill of the A319NEO program, their market approach seems to favor large NB's, many A320s, 737-800 and A321s. A conversion to A320NEO / A321NEO's seems likely. https://en.wikipedia.org/wiki/China_Sou ... ines#Fleet

A220s for China is different story, no sales yet, the ARJ, and a significant A220 supply chain. Something might be cooking there.
 
FluidFlow
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Re: Future of the A319NEO in Airbus portfolio

Mon Sep 20, 2021 1:26 pm

keesje wrote:
VV wrote:
keesje wrote:
85% of CS/A220 orders are for A220-300s, seating close to 150 seats, mostly for large mainline operators.

It seems Airbus saw the threat and didn't fall for the seducing BBD "110-130 seat regional" communications of the early days.

Engines choice for the NEO are up to the airlines. RE: E2 jets, it seems the A220-100 will be struggling against them.
...


While the engine choice is indeed the choice of the airline, you need to take into account the contractual agreement between Airbus and the engine manufacturers.

Let us look carefully into the situation of the A220 and A319neo.

For some unexplained reasons, the "owner" of the PW1100G-JM (A319neo) is International Aero Engines and that of the PW1500G (A220) is Pratt & Whitney.
I understand the argument that it is not a "big deal". I would like to say that it is important to note that the engine contract for PW1100G-JM is between Airbus and IAE, whereas the legally biding contract of the PW1500G is between Bombardier (then transferred to Airbus Canada Limited Partnership) and Pratt & Whitney.

It means that the A220 and A310neo have three different legally binding contracts.
  • Pratt & Whitney with Airbus Canada Limited Partnership for A220
  • International Aero Engines with Airbus for A319neo/PW1100G-JM
  • CFM International for A319neo/Leap-1A

I would not underestimate the complexity of relationship between those parties and a potential customer of any of those aircraft.

In my opinion, the A319neo's engine situation is not helping its sales in the future, just because it is difficult for Airbus to deal with all those engine owners fairly.

Think calmly about the above before making another comment.

Links for PW1100G-JM and PW1500G
https://www.easa.europa.eu/sites/defaul ... e%2007.pdf
https://www.easa.europa.eu/sites/defaul ... 210224.pdf


I think Airbus & the airlines would be fine without the A319NEO and all it's possible engine contractual complications. And I think it might be heading tin that direction.

Looking at China Southern, maybe now the spill of the A319NEO program, their market approach seems to favor large NB's, many A320s, 737-800 and A321s. A conversion to A320NEO / A321NEO's seems likely. https://en.wikipedia.org/wiki/China_Sou ... ines#Fleet

A220s for China is different story, no sales yet, the ARJ, and a significant A220 supply chain. Something might be cooking there.


IIRC there are some Airports in China that are only certified for the A319 as the largest aircraft to operate to/from. This is going back to when only the A319 had the performance to take off from there due to the altitude. If this has not changed (so there was only an amendment for the neo), Chinese airlines are poised to operate the A319 to said destinations. Especially if it is not worth to have a subfleet of a different type just for that airport.

EDIT: Here is the link but it is from 2010. I wonder if something changed: https://www.airbus.com/newsroom/news/en/2010/07/the-world-s-third-highest-airport-opens-with-milestone-airbus-a319-flight.html
 
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seahawk
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Re: Future of the A319NEO in Airbus portfolio

Mon Sep 20, 2021 1:31 pm

VV wrote:
seahawk wrote:
Exactly what is the problem Airbus faces?

- airlines order an A320 instead -> no problem
- airlines order an A223 instead -> no problem
- airlines order an A319NEO -> still no problem

The only problem would be if airlines decide that the missing A319 makes them order 737s.


THe problem is that Airbus has already spent hundreds of million dollars to certify the A319neo and yet they have only 73 orders and so far only 3 (three) have been delivered.

I understand your point about the fact the effort has been spent and thus any order for A319neo allows to reduce the regret having certified the A319neo.

This being said, I think neither IAE (PW1100G-JM) nor CFM Internation (Leap-1A) would be willing to make further concession on their engines. On the other hand we also know that A319neo is sold at a much lower pricing than the A320neo when the production cost is quite similar.

Hence, it would be stupid for Airbus to try selling more A319neo.
Hence the question asked by the original poster about the future of the A319neo in Airbus portfolio when the A220 is perceptible less expensive and easier to sell.
https://www.airbus.com/content/dam/corp ... s-2018.pdf

It is clear that A319neo does not have much future in the configuration where the aircraft have two engine manufacturers and there is also A220-300 in the same category.

Why did they proceed with the A319neo certification when they already acquired the C Series? I think that's the real reason of the question asked by the original poster.


I am not convinced that the A223 makes them more money. The engine is also a PW GTF and the economy of scale of the whole product line favours the A319. And in the end, if the 737-7MAX is able to compete with the A223 on price, the A319 must be as well. It is just not in the best interest of Airbus to do so, after they took over the A220 series. But I think in the original planing they wanted to set the A319NEO head-to-head against the CS300 and I think they were confident of winning.
 
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crimsonchin
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Re: Future of the A319NEO in Airbus portfolio

Mon Sep 20, 2021 1:42 pm

scbriml wrote:

Next you'll be claiming the neo was launched too soon and the backlog is too big.


Would that be before or after claiming that the MAX is a trojan horse program looking to lure Airbus into committing deeply to the NEO, after which a surprise attack new NB would be launched by Boeing? :D
 
MIflyer12
Posts: 9993
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Re: Future of the A319NEO in Airbus portfolio

Mon Sep 20, 2021 1:52 pm

VV wrote:
Hence the question asked by the original poster about the future of the A319neo in Airbus portfolio when the A220 is perceptible less expensive and easier to sell.
https://www.airbus.com/content/dam/corp ... s-2018.pdf


You're confusing prices and costs. Worse, list prices (which aren't even relevant to the fifty largest airlines that drive airframe investment and sales) and costs. Prices can be quite independent of costs in monopoly and oligopoly markets.

Airbus was clear in February when it said it lost money on A220 sales. It said it didn't even make money at variable cost - the no contribution margin declaration. There is no argument that Airbus will make zero contribution margin on 319neos. It's just silly.
 
WayexTDI
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Re: Future of the A319NEO in Airbus portfolio

Mon Sep 20, 2021 1:53 pm

VV wrote:
seahawk wrote:
Exactly what is the problem Airbus faces?

- airlines order an A320 instead -> no problem
- airlines order an A223 instead -> no problem
- airlines order an A319NEO -> still no problem

The only problem would be if airlines decide that the missing A319 makes them order 737s.


THe problem is that Airbus has already spent hundreds of million dollars to certify the A319neo and yet they have only 73 orders and so far only 3 (three) have been delivered.

I understand your point about the fact the effort has been spent and thus any order for A319neo allows to reduce the regret having certified the A319neo.

This being said, I think neither IAE (PW1100G-JM) nor CFM Internation (Leap-1A) would be willing to make further concession on their engines. On the other hand we also know that A319neo is sold at a much lower pricing than the A320neo when the production cost is quite similar.

Hence, it would be stupid for Airbus to try selling more A319neo.
Hence the question asked by the original poster about the future of the A319neo in Airbus portfolio when the A220 is perceptible less expensive and easier to sell.
https://www.airbus.com/content/dam/corp ... s-2018.pdf

It is clear that A319neo does not have much future in the configuration where the aircraft have two engine manufacturers and there is also A220-300 in the same category.

Why did they proceed with the A319neo certification when they already acquired the C Series? I think that's the real reason of the question asked by the original poster.

You obviously believe Airbus made a mistake with the A319neo, you've made it clear in this thread. It seems a lot of posters (including myself) are not in agreement with you.
What are you trying to do? Convinced those who don't agree with you? Or trying to find excuses to convince yourself you're right?
 
VV
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Re: Future of the A319NEO in Airbus portfolio

Mon Sep 20, 2021 3:09 pm

WayexTDI wrote:
VV wrote:
...

You obviously believe Airbus made a mistake with the A319neo, you've made it clear in this thread. It seems a lot of posters (including myself) are not in agreement with you.
What are you trying to do? Convinced those who don't agree with you? Or trying to find excuses to convince yourself you're right?


I believe Airbus made mistake acquiring the C Series.
 
LHAM
Posts: 32
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Re: Future of the A319NEO in Airbus portfolio

Mon Sep 20, 2021 3:28 pm

If only Airbus had let the C series getting acquired by Boeing for a song it would have solved its pickle with the 737 replacement.
But if you are a bitter ex employee you somehow try to convince people that it really shouldn't have checkmated BCA with that move.
Give it a rest man.
Last edited by LHAM on Mon Sep 20, 2021 3:35 pm, edited 1 time in total.
 
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NWAROOSTER
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Re: Future of the A319NEO in Airbus portfolio

Mon Sep 20, 2021 3:30 pm

MIflyer12 wrote:
VV wrote:
Hence the question asked by the original poster about the future of the A319neo in Airbus portfolio when the A220 is perceptible less expensive and easier to sell.
https://www.airbus.com/content/dam/corp ... s-2018.pdf


You're confusing prices and costs. Worse, list prices (which aren't even relevant to the fifty largest airlines that drive airframe investment and sales) and costs. Prices can be quite independent of costs in monopoly and oligopoly markets.

Airbus was clear in February when it said it lost money on A220 sales. It said it didn't even make money at variable cost - the no contribution margin declaration. There is no argument that Airbus will make zero contribution margin on 319neos. It's just silly.


Yes, Airbus probably lost money on the Bombarder C100, now the A220 as Bombarder sold the early A220s to Delta Air Lines at give away prices just to get them in the market. Airbus had to honer the original price with Delta. :old:
 
tommy1808
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Re: Future of the A319NEO in Airbus portfolio

Tue Sep 21, 2021 5:23 am

VV wrote:
seahawk wrote:
Exactly what is the problem Airbus faces?

- airlines order an A320 instead -> no problem
- airlines order an A223 instead -> no problem
- airlines order an A319NEO -> still no problem

The only problem would be if airlines decide that the missing A319 makes them order 737s.


THe problem is that Airbus has already spent hundreds of million dollars to certify the A319neo


Given that the whole neo program only cost 2 Billion i don´t think that anything A319neo went into the hundreds of million.

https://www.flightglobal.com/airbus-out ... 20.article

best regards
Thomas
 
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scbriml
Posts: 20111
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Re: Future of the A319NEO in Airbus portfolio

Tue Sep 21, 2021 7:50 am

tommy1808 wrote:
VV wrote:
seahawk wrote:
Exactly what is the problem Airbus faces?

- airlines order an A320 instead -> no problem
- airlines order an A223 instead -> no problem
- airlines order an A319NEO -> still no problem

The only problem would be if airlines decide that the missing A319 makes them order 737s.


THe problem is that Airbus has already spent hundreds of million dollars to certify the A319neo


Given that the whole neo program only cost 2 Billion i don´t think that anything A319neo went into the hundreds of million.

https://www.flightglobal.com/airbus-out ... 20.article

best regards
Thomas


Interesting that poster neglected to provide a link to support his claim. :scratchchin:
 
smartplane
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Re: Future of the A319NEO in Airbus portfolio

Tue Sep 21, 2021 10:38 am

VV wrote:
While the engine choice is indeed the choice of the airline, you need to take into account the contractual agreement between Airbus and the engine manufacturers.

Let us look carefully into the situation of the A220 and A319neo.

For some unexplained reasons, the "owner" of the PW1100G-JM (A319neo) is International Aero Engines and that of the PW1500G (A220) is Pratt & Whitney.
I understand the argument that it is not a "big deal". I would like to say that it is important to note that the engine contract for PW1100G-JM is between Airbus and IAE, whereas the legally biding contract of the PW1500G is between Bombardier (then transferred to Airbus Canada Limited Partnership) and Pratt & Whitney.

It means that the A220 and A310neo have three different legally binding contracts.
  • Pratt & Whitney with Airbus Canada Limited Partnership for A220
  • International Aero Engines with Airbus for A319neo/PW1100G-JM
  • CFM International for A319neo/Leap-1A

I would not underestimate the complexity of relationship between those parties and a potential customer of any of those aircraft.

In my opinion, the A319neo's engine situation is not helping its sales in the future, just because it is difficult for Airbus to deal with all those engine owners fairly.

P&W and IAE (in respect to the PW1100G) are one and the same. Contract will show IAE, but the domicile address is the same as P&W.

Airlines and lessors are used to dealing with different engine OEM's. The A32 family is a perfect example of where lessors are keen to mitigate risk by mixing engine type.

Engine OEM's use a standard template for most sales, with side agreements, while only the largest customers get to use 'their' template.

The majority of NB sales are turnkey, with the air frame OEM offering an air frame and engine package. In contrast to WB, not many NB customers choose to negotiate directly with engine OEM's.

Not complex.
 
Weatherwatcher1
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Re: Future of the A319NEO in Airbus portfolio

Tue Sep 21, 2021 1:29 pm

seahawk wrote:
Exactly what is the problem Airbus faces?

- airlines order an A320 instead -> no problem
- airlines order an A223 instead -> no problem
- airlines order an A319NEO -> still no problem

The only problem would be if airlines decide that the missing A319 makes them order 737s.


Lessors and financiers will have a problem. They will avoid the A319neo since lessors and banks don’t like orphan aircraft. The problem they have is if they have to remarket a 10-15 year old airplane. They don’t want to see an asset get scrapped due to no secondary market rather than get the 20-25 years or life out of the plane that they expect. They also don’t want to see 10 year old airplanes have their lease rates drop in half after 10 years. The A319 is not an ideal freighter either.

The A319 also has a low residual value compared to the A320. United and Allegiant capitalized on this by buying cheap 10 year old used A319s from China Southern, Cebu and Easyjet. When deals like that happen, someone is likely losing money.

So you may ask what problem does Airbus face? The problem is lessors demand lower prices due to the lower projected value of the asset. Unfortunately for Airbus it isn’t that much cheaper to make an A319 than an A320, so Airbus has little negotiating room while still making a profit. Hence Airbus essentially walks away from the A319neo and works with airlines to convert them to A320s or A321s. Airbus’ problem is they can’t turn a profit selling A319s.
 
MUCFan
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Re: Future of the A319NEO in Airbus portfolio

Tue Sep 21, 2021 2:07 pm

Weatherwatcher1 wrote:
seahawk wrote:
Exactly what is the problem Airbus faces?

- airlines order an A320 instead -> no problem
- airlines order an A223 instead -> no problem
- airlines order an A319NEO -> still no problem

The only problem would be if airlines decide that the missing A319 makes them order 737s.


Lessors and financiers will have a problem. They will avoid the A319neo since lessors and banks don’t like orphan aircraft. The problem they have is if they have to remarket a 10-15 year old airplane. They don’t want to see an asset get scrapped due to no secondary market rather than get the 20-25 years or life out of the plane that they expect. They also don’t want to see 10 year old airplanes have their lease rates drop in half after 10 years. The A319 is not an ideal freighter either.

The A319 also has a low residual value compared to the A320. United and Allegiant capitalized on this by buying cheap 10 year old used A319s from China Southern, Cebu and Easyjet. When deals like that happen, someone is likely losing money.

So you may ask what problem does Airbus face? The problem is lessors demand lower prices due to the lower projected value of the asset. Unfortunately for Airbus it isn’t that much cheaper to make an A319 than an A320, so Airbus has little negotiating room while still making a profit. Hence Airbus essentially walks away from the A319neo and works with airlines to convert them to A320s or A321s. Airbus’ problem is they can’t turn a profit selling A319s.


Can you provide a source that it isn´t that much cheaper for Airbus to make an A319 than an A320?
 
User avatar
scbriml
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Re: Future of the A319NEO in Airbus portfolio

Tue Sep 21, 2021 2:10 pm

Weatherwatcher1 wrote:
So you may ask what problem does Airbus face? The problem is lessors demand lower prices due to the lower projected value of the asset. Unfortunately for Airbus it isn’t that much cheaper to make an A319 than an A320, so Airbus has little negotiating room while still making a profit. Hence Airbus essentially walks away from the A319neo and works with airlines to convert them to A320s or A321s. Airbus’ problem is they can’t turn a profit selling A319s.


Yet, despite knowing all of this and having the A220-300 available, Airbus still went ahead and certified the A319neo. They obviously don't see it as a big problem, unlike some posters here!

I'll change my mind if someone can show us where Airbus has suffered material harm as a result of having the A319neo available.
 
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seahawk
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Re: Future of the A319NEO in Airbus portfolio

Tue Sep 21, 2021 2:42 pm

MUCFan wrote:
Weatherwatcher1 wrote:
seahawk wrote:
Exactly what is the problem Airbus faces?

- airlines order an A320 instead -> no problem
- airlines order an A223 instead -> no problem
- airlines order an A319NEO -> still no problem

The only problem would be if airlines decide that the missing A319 makes them order 737s.


Lessors and financiers will have a problem. They will avoid the A319neo since lessors and banks don’t like orphan aircraft. The problem they have is if they have to remarket a 10-15 year old airplane. They don’t want to see an asset get scrapped due to no secondary market rather than get the 20-25 years or life out of the plane that they expect. They also don’t want to see 10 year old airplanes have their lease rates drop in half after 10 years. The A319 is not an ideal freighter either.

The A319 also has a low residual value compared to the A320. United and Allegiant capitalized on this by buying cheap 10 year old used A319s from China Southern, Cebu and Easyjet. When deals like that happen, someone is likely losing money.

So you may ask what problem does Airbus face? The problem is lessors demand lower prices due to the lower projected value of the asset. Unfortunately for Airbus it isn’t that much cheaper to make an A319 than an A320, so Airbus has little negotiating room while still making a profit. Hence Airbus essentially walks away from the A319neo and works with airlines to convert them to A320s or A321s. Airbus’ problem is they can’t turn a profit selling A319s.


Can you provide a source that it isn´t that much cheaper for Airbus to make an A319 than an A320?


As I said in an older post. Airbus is not even actively marketing the A319NEO (except the CJ) at the moment. It is a "on request" option. If an airline is looking at planes in the market segment, Airbus offers the A223 first, but if an airline wants A320+A321s and some A319s as well, they are willing to do this.
 
FlapOperator
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Re: Future of the A319NEO in Airbus portfolio

Tue Sep 21, 2021 2:45 pm

MUCFan wrote:

Can you provide a source that it isn´t that much cheaper for Airbus to make an A319 than an A320?


While not a source, one of the strong rumors inherent in the buy of a large US LCC for A320 family aircraft was that the four aircraft would be inter-changeable in delivery (i.e. a A319 could be swapped for a 321 or any combination.) This was considered a vital element of retaining the 320 in the fleet against an aggressive Boeing bid.

The 319 was fractional less than baseline 320, and a 321 fractionally more. I don't know the fractions involved as that was considered highly proprietary.

However, suffice it to say that a 319 was considered a marginal cheaper airplane. If that lower cost of purchase was economically valuable over a lifecycle would be a question for accountants.
 
tommy1808
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Re: Future of the A319NEO in Airbus portfolio

Tue Sep 21, 2021 2:47 pm

Weatherwatcher1 wrote:
Hence Airbus essentially walks away from the A319neo and works with airlines to convert them to A320s or A321s. Airbus’ problem is they can’t turn a profit selling A319s.


Seems like a very good deal for Airbus. Customer comes looking for a 150 seater and leaves with a PO for a 180 seater.

Best regards
Thomas
 
Weatherwatcher1
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Re: Future of the A319NEO in Airbus portfolio

Tue Sep 21, 2021 3:23 pm

MUCFan wrote:
Weatherwatcher1 wrote:
seahawk wrote:
Exactly what is the problem Airbus faces?

- airlines order an A320 instead -> no problem
- airlines order an A223 instead -> no problem
- airlines order an A319NEO -> still no problem

The only problem would be if airlines decide that the missing A319 makes them order 737s.


Lessors and financiers will have a problem. They will avoid the A319neo since lessors and banks don’t like orphan aircraft. The problem they have is if they have to remarket a 10-15 year old airplane. They don’t want to see an asset get scrapped due to no secondary market rather than get the 20-25 years or life out of the plane that they expect. They also don’t want to see 10 year old airplanes have their lease rates drop in half after 10 years. The A319 is not an ideal freighter either.

The A319 also has a low residual value compared to the A320. United and Allegiant capitalized on this by buying cheap 10 year old used A319s from China Southern, Cebu and Easyjet. When deals like that happen, someone is likely losing money.

So you may ask what problem does Airbus face? The problem is lessors demand lower prices due to the lower projected value of the asset. Unfortunately for Airbus it isn’t that much cheaper to make an A319 than an A320, so Airbus has little negotiating room while still making a profit. Hence Airbus essentially walks away from the A319neo and works with airlines to convert them to A320s or A321s. Airbus’ problem is they can’t turn a profit selling A319s.


Can you provide a source that it isn´t that much cheaper for Airbus to make an A319 than an A320?


Not in the public domain, although the discussions around deferred production cost reduction from a few years ago on 787 being so heavily dependent on the -8/9/10 delivery breakdown can shed some light since there are some numbers that can be calculated from those statements from Boeing.

The percent of costs that are close to fixed between the A319, A320, and A321 is high. Wings, systems components, engines, avionics, overhead, etc make up a high percentage of an airplanes production cost. I have seem comparisons between production costs for different models compared to the market value that A/B can sell them for. The difference in sales price is based on the asset’s value to the operator so that’s why stretches are priced much higher than the actual difference in production cost.
Last edited by Weatherwatcher1 on Tue Sep 21, 2021 3:29 pm, edited 1 time in total.
 
Weatherwatcher1
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Re: Future of the A319NEO in Airbus portfolio

Tue Sep 21, 2021 3:26 pm

scbriml wrote:
Weatherwatcher1 wrote:
So you may ask what problem does Airbus face? The problem is lessors demand lower prices due to the lower projected value of the asset. Unfortunately for Airbus it isn’t that much cheaper to make an A319 than an A320, so Airbus has little negotiating room while still making a profit. Hence Airbus essentially walks away from the A319neo and works with airlines to convert them to A320s or A321s. Airbus’ problem is they can’t turn a profit selling A319s.


Yet, despite knowing all of this and having the A220-300 available, Airbus still went ahead and certified the A319neo. They obviously don't see it as a big problem, unlike some posters here!

I'll change my mind if someone can show us where Airbus has suffered material harm as a result of having the A319neo available.


I don’t see it as a BIG problem, but not being able to earn much of a profit building A319s isn’t a good thing. Keeping an already certified airplane on offer isn’t that expensive. There will be airlines that desire the performance capability of the smaller variant.

tommy1808 wrote:
Weatherwatcher1 wrote:
Hence Airbus essentially walks away from the A319neo and works with airlines to convert them to A320s or A321s. Airbus’ problem is they can’t turn a profit selling A319s.


Seems like a very good deal for Airbus. Customer comes looking for a 150 seater and leaves with a PO for a 180 seater.

Best regards
Thomas


Airbus wants everyone to upgauge to A321s which have the highest profit margin. Airlines also have the most earning potential using the A321, but it has to be priced according to market value otherwise it will turn into an “if you can fill it” challenge.
 
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Re: Future of the A319NEO in Airbus portfolio

Tue Sep 21, 2021 7:07 pm

Weatherwatcher1 wrote:
Lessors and financiers will have a problem. They will avoid the A319neo since lessors and banks don’t like orphan aircraft. The problem they have is if they have to remarket a 10-15 year old airplane. They don’t want to see an asset get scrapped due to no secondary market rather than get the 20-25 years or life out of the plane that they expect. They also don’t want to see 10 year old airplanes have their lease rates drop in half after 10 years. The A319 is not an ideal freighter either.

The A319 also has a low residual value compared to the A320. United and Allegiant capitalized on this by buying cheap 10 year old used A319s from China Southern, Cebu and Easyjet. When deals like that happen, someone is likely losing money.

So you may ask what problem does Airbus face? The problem is lessors demand lower prices due to the lower projected value of the asset. Unfortunately for Airbus it isn’t that much cheaper to make an A319 than an A320, so Airbus has little negotiating room while still making a profit. Hence Airbus essentially walks away from the A319neo and works with airlines to convert them to A320s or A321s. Airbus’ problem is they can’t turn a profit selling A319s.

Mainstream lessors and financiers avoid nothing. They simply price accordingly.

There is far more reticence in respect to early builds, especially completely new models like the A220, 787, A380, and yes, even the 777X, which is why OEM's offer 'below the radar' support, like fixed price buybacks.

The A319NEO is a low volume, but a mainstream model in respect to support.

A32 and 737 family sales are a juggernaut. Total A319NEO sales wouldn't likely see even a single customer 'demanding' and obtaining extra discounts. Some high volume NB customers even undertake retrospective acceptance when the aircraft has already entered service. The World has changed.
 
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Re: Future of the A319NEO in Airbus portfolio

Tue Sep 21, 2021 7:32 pm

seahawk wrote:
As I said in an older post. Airbus is not even actively marketing the A319NEO (except the CJ) at the moment. It is a "on request" option. If an airline is looking at planes in the market segment, Airbus offers the A223 first, but if an airline wants A320+A321s and some A319s as well, they are willing to do this.

Right, but any/every plausible Airbus customer knows of the A319neo so if they want it they'll ask for it.

This means the distinction is meaningless, it is at best a bit of posturing by the marketing team.

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