Airbus Battles To Save Emirates A350-1000 Order

May 26th, 2008

A report issued last week claiming that Airbus is currently grappling weight issues on its newest airplane, the A350XWB came as little surprise.

Six months ago, FleetBuzz Editorial.com opined that the A350 was struggling on a multitude of fronts. Most notably, the A350-1000 has been the one key headache Airbus is battling with and its range target in a 350 seat tri-class configuration to compete against the highly successful 777-300ER.

The latest revelations about the A350 and its weight problems poses an indirect headache for its US rival too. With the 787 Dreamliner racing towards power on within the next four weeks, Boeing already has its hands full and would be loathe to address the A350-1000 any time soon with a new model, such as the oft talked about 787-10.

Image courtesy of Boeing

My colleague Geoffrey Thomas spoke with Emirates VP for fleet planning, Richard Jewsbury earlier this year. In his report (click here) Jewsbury made no secret that the 777-300ER still had the upper hand in terms of cargo capability over the A350-1000. For people unfamiliar with Emirates, its SkyCargo division is a critical and integral part of its operations and the reliance of underbelly space on its airplanes cannot be understated. While the A350 will bring fuel efficiency, particularly during times of high and burgeoning fuel costs, the fact remains that the A350-1000 will lose critical (cargo) revenue on each and every flight it makes for Emirates. For the big Persian Gulf carrier, that’s a cost it is not willing to bear.

“Quite clearly, it’s not (yet) good enough,“.

“The (A350)-900 has much more to offer against our 777-200 and A330 fleet. The equation becomes more opaque with the 777-300ER because it’s such a good airplane and its no surprise to you that it forms the backbone of our current long haul operations. The (A350)-1000 has a long way to go yet, but we’re evaluating the situation and we’re free to chop and change as we please,” says Emirates.

While Airbus looks to shed weight across the A350 program, the shift in positioning of the largest A350-1000 model from the 777-300ER can be seen with the offer the aerospace company made to Qantas not too long ago.

Of considerable interest is the way Airbus presented a quad class seating arrangement slashed to just 270 seats in order to give the A350-1000 the range to complete an array of Qantas specified mission profiles, each carrying less cargo than similarly configured routes by airlines operating 777-300ER’s.

This disadvantage has and continues to irk Emirates and with just 40 orders for the A350-1000 family, any order change or cancellation would place the said model in extreme jeopardy and further risk infuriating Qatar Airways, which has also been highly critical at the slow pace of development across the entire A350 family.

Image courtesy of Airbus

British Airways too is looking at the A350-1000 as part of its second tranche order to replace its ageing 747-400 fleet. The decision to select the A380 has already drawn fierce criticism that cargo will be sacrificed does not bode well for the A350-1000 either. Unlike some of the biggest cargo haulers in the sky, British Airways does not own or operate a dedicated freighter fleet (aside from 747-400F’s on lease). It relies almost exclusively on its passenger flights to ferry both volumetric and weight sensitive freight on a variety of missions and destinations. Seeing Emirates openly criticise this capability will not be an easy pill to swallow for advocates of the big Airbus twin at BA.

Emirates has never been one to shy away from making big decisions - it couldn’t wait to acquire the 747-8F not long after it switched its A380F order for passenger models - a shrewd move given that there is almost no chance the A380F will ever be resurrected and also its decision to cancel an order for the A340-600 serves as a reminder that the commitment to the A350-1000 is by no means a safe bet.

For Boeing, the pressure to develop the 787-10 will not be lost on the company. Emirates itself has made no secret that it wants Boeing to do something about the 777 family - either upgrade or replace it, both of which will require considerable resources that the company at present does not possess to throw at it given the inherent challenges it faces while recovering the 787 production and delivery schedules in the wake of the third delay announced in April 2008.

In the meantime, Boeing says that it will continue to evaluate the needs of customers and the market requirements before settling on either a second stretch for the 787 or either modify or replace the 777.

By far the biggest issue with the A350-1000 is the fact that the airplane brings very little additional value to airlines despite entering service so late on in the game. With a planned service entry of 2015, by which time the oldest 777-300ER will be roughly 13 years old, the A350-1000 does not allow airlines to replace the big Boeing twin with a comparably sized airplane.

Image courtesy of Airbus

Internally, the A350XWB family is not the widest in the category leaving airlines with a dilemma if they try and cram in 10-abreast seating into a jet that is considerably narrower than the 777 family. Equally, the reclassification of the A380 as a 525 seat tri-class jet further serves to reinforce the point that the A350-1000 will certainly not be an 8,000nm airplane that can carry 350 passengers. Seating reclassification is something that Airbus will not be pleased to do.

As it stands, the cold reality is that the A350-1000 can no longer be considered a true 777-300ER replacement.

For Emirates, it is no secret that the airline is “livid” that the A350-1000 will not match tri or dual-class seating as on its 777-300ER, some of which are equipped with up to 442 seats.

One only need look at some of the critical comments made by Akbar Al-Baker, CEO of Qatar Airways just weeks after finally signing the A350 deal.

“For a launch customer we have been provided with remarkably limited information on the A350XWB,” he said last summer.

“Qatar Airways has not at all been encouraged by Airbus to participate in the A350 development and we aim to change this,“.

The two biggest Arab carriers may exert more pressure than Airbus would indeed like, and perhaps is part of the reason why sales of the A350-1000 have remained flat with nothing on the horizon to suggest a turnaround in its fortunes.

With the benefit of having time on its side to correct and shift some of the goals set for the A350 family, it raises further questions why Airbus took so long to address the successes of the 777 and 787 families and whether the focus on the A380 has diverted the attention away from the biggest market segment for widebody jets in its blind pursuit of the niche market for the 500+ seat arena.

Should the A350-1000 fail to secure more orders in 2008, it won’t just be Airbus who will be questioning the purpose of building the airplane - ultimately, if airlines do not see a need for this marginal player, the possibility of a premature death like the A380F is an eventuality that should not be ruled out.

Unfortunately for Airbus, it has saddled yet another important project in the hands of one key customer.

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