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A320neo 'a response to the market'

More than 500 orders expected in first seven months

By Tom Ballantyne in Toulouse 

Airbus took ownership of the marketing high ground for future single aisle aircraft when it announced last month that entry into service of its A320neo (new engine option) would be brought forward six months to October 2015.

  A320neo: Airbus expects in excess of 500 orders by June
In a media briefing in April, when the Toulouse-based manufacturer outlined its plans for the revamped aircraft type, a bullish John Leahy, Airbus’s chief operating officer customers, said the A320neo would offer 12%-15% in fuel savings due to development of more efficient engines. Additionally, airline customers would be offered new ‘sharklet’ wing tips that would produce fuel savings and improved take-off performance on all A320s from 2012, he said.

Leahy also took to task recent comments by rival Boeing, who produce the successful single aisle B737, which challenged Airbus’s claims for the A320neo. Boeing Commercial Airplanes chief executive, Jim Albaugh, said in March that the current B737 would still be 2% better than the re-engineered A320neo “and that’s if we do nothing on this airplane”.

He continued: “We are going to do some things. One thing we will always have is the most capable and the most efficient airplane in any market we serve.”

“What is he drinking?” was Leahy’s riposte. “A few of my colleagues in Seattle appear to be in denial.”

The A320neo update is clearly designed to ‘up the ante’ in the battle to win the largest slice of the single aisle jet market. Of the 30,900 new jets projected to be required by airlines in the next 20 years, some 21,000 will be single aisle aircraft, worth some US$1.7 trillion.

It is the biggest market in terms of units and investment. Airbus believes the neo will give it the lead. It already has 332 orders for the A320neo: 150 from India’s budget operator IndiGo, 100 from lessor ILFC, 30 from Germany’s Lufthansa, 22 from TAM, of Brazil and 30 from Virgin America.

“This is the fastest selling aircraft in aviation history,” said Leahy. “We announced it last December, just before Christmas, and here we are at the beginning of April with over 330 orders. I am quite confident that by the [Paris] air show [in June] we will have in excess of 500 orders for this plane, including some from the Asia-Pacific.”

  'The Airbus neo concept is that it should improve today’s aircraft with minimum change and retain maximum commonality with existing types'
One regional operator talking to Airbus is Malaysian low-cost carrier (LCC), AirAsia. Indeed, in February, Leahy told Orient Aviation that AirAsia could order up to 150 neos.

The delay by Boeing in announcing a competitor to the neo has puzzled many industry observers, but the company’s marketing chief, Randy Tinseth, told Orient Aviation recently the U.S. planemaker is taking its time because it wants to make sure it makes the right decision between a re-engined B737 and a brand new aircraft.

He said he expected a decision on which way to go by mid-year. However, recent industry speculation was that Boeing would delay announcing an all-new replacement for the B737NG until late next year.

“One thing we know is we are going to continue to make the airplane better,” said Tinseth. “We have looked at re-engining the airplane and we can get just as much improvement as our competition, but we are struggling to make the business case close for the industry, not just for us, but for our customers as well as our suppliers.”

Leahy can’t understand Boeing’s reasoning. “According to Boeing people [airlines] aren’t that interested in re-engined aeroplanes. We have more than 330 orders announced and we are on our way rather rapidly to in excess of over 500 orders,” he said.

The only negative is that airlines want the neo sooner than planned, which is why entry into service has been brought forward six months, he said.

Leahy told the briefing the neo would offer 20% less fuel burn per trip than the B737-800, 15% less fuel burn per seat and 14% less COC (fuel + maintenance costs + landing fees + crew costs) per trip. The neo would also fly 3,670 nautical miles (nm) compared with the B737’s 3010nm.

“The market wants a re-engined A320 and it probably wants the re-engined B737 as well. If you have the capability of a 15% reduction in fuel burn and you don’t do it, that’s how the industry starts getting into trouble,” said Leahy.

The Airbus neo concept is that it should improve today’s aircraft with minimum change and retain maximum commonality with existing types. Because of the new engine – the lead engine is the Pratt & Whitney PW1000G, but the CFM International LEAP-X will also be an option – there will be strengthening of the centre wing box and other parts of the wing, with a new pylon to carry the engine, as well as the sharklets. Cockpit systems will be adapted for the new engines.

There is 95% commonality of airframe spares between the A320 and the A320neo, with 91% commonality in tooling. Engineers will have to undergo only five days training to handle the differences and pilot familiarization training will take only two hours of self-study on a computer.

The sharklets are around 2.5 metres high. As well as increasing payload range and improving take-off performance, they will produce about a 3.5% reduced fuel burn over longer sectors, corresponding to an annual CO² reduction of around 700 tonnes per aircraft.

Leahy pointed out that A320s have logged some 95 million flight hours with 99.7% dispatch reliability. The first A320 built is still flying. It is currently in a hangar in Toulouse where its wings are being strengthened to become part of the sharklets test programme.

Leahy added that contrary to predictions, Airbus only made minor changes to production during the recession. “We are now on the way back to 40 aircraft a month and are studying our ability to go to rate 42 or rate 44. This is not for the neo. This is for today’s aeroplane,” he said.