Not big surprise:

Airbus also said it would cut production of its A330 long-range plane, once an earnings driver, to about 50 a year starting in 2019. It delivered 67 last year

.
http://www.4-traders.com/AIRBUS-SE-4637 ... -26442951/

Yeah, definitely no surprise.

Losing AA and the surprisingly high-profile HA order, had to sting.

WPvsMW wrote:

Coverage in the WSJ (paywall).
https://www.wsj.com/articles/airbus-cut ... 1524807744

For those without a subscription, just Google the article's title... Google will then give you a link to the full article for free.

The HA U-turn to Boeing was the clear inflection point.... at least the deal isn't stuck in a rotary. Airbus sees a trend of the Dreamliner getting legs.

Coverage in the WSJ (paywall).
https://www.wsj.com/articles/airbus-cut ... 1524807744

IIRC the A330 boost to production was to take advantage of a peak in demand and it was always going to drop again.

With 50/year they already have around 6 years of production in their backlog. That still leaves reasonable time to sell a few more A330neo.

Only 50/year....that's still a fair few jets. Look at A380 production ...

LAX772LR wrote:

Yeah, definitely no surprise.

Losing AA and the surprisingly high-profile HA order, had to sting.

Losing the HA order was always possible and Airbus knew it but figured it was worth the risk to save the money of not producing the A350-800. HA ordered a plane with a much longer range for a reason. The A330 didn't fit that basic requirement.

RickNRoll wrote:

LAX772LR wrote:

Losing AA and the surprisingly high-profile HA order, had to sting.

HA ordered a plane with a much longer range for a reason. The A330 didn't fit that basic requirement.

Prior to cancellation, it actually did.
The recent 251T uprate option gives the A338 the same range as the A358 proposal.

A358 range - 8200nm
A338 range - 8150nm

And not only that, but according to Leeham, the A338 will also out-distance the 789, given the same payload.
https://leehamnews.com/2018/03/29/is-ai ... 300-seats/

So range can't be the issue, it had to be cost.

WPvsMW wrote:

The HA U-turn to Boeing was the clear inflection point.... at least the deal isn't stuck in a rotary. Airbus sees a trend of the Dreamliner getting legs.

Coverage in the WSJ (paywall).
https://www.wsj.com/articles/airbus-cut ... 1524807744

What you suggest may be true, but contrary to some on here of late, there will be many more sales
of A330......it will remain a thorn for Boeing for a while yet.

RickNRoll wrote:

IIRC the A330 boost to production was to take advantage of a peak in demand and it was always going to drop again.

Not really.

Rate was supposed to be 84 to 96 a year out the gate and was touted as being up to 120 a year. We are at something like half the original intended rate now.

That’s a lot of cash not moving for Airbus. Figure $100 million a piece so the revenue off this line is going to be several billion a year less than initially projected. Taken anyway you want that stings. Even just the cut from the lower 67 a year rate means revenue drops around $2 billion per year.

Airbus still has 27x A330MRTT and 4x A330F left to deliver. AFAIK especially the MRTT conversion is time consuming. This production rate decrease could very well be caused by a increase of MRTT and Freighter production on the A330 FAL line. The FAL could very well be running at a higher rate than deliveries for about two years time.
What also stands out, is the fact that Airbus build the A330 completion center in China, but there are no A330NEO orders from China.
But indeed it's not surprising A330 production drops further.

CFRPwingALbody wrote:

:idea: Airbus still has 27x A330MRTT and 4x A330F left to deliver. AFAIK especially the MRTT conversion is time consuming. This production rate decrease could very well be caused by a increase of MRTT and Freighter production on the A330 FAL line. The FAL could very well be running at a higher rate than deliveries for about two years time.
What also stands out, is the fact that Airbus build the A330 completion center in China, but there are no A330NEO orders from China.
But indeed it's not surprising A330 production drops further.

If I am China I would order 300 or more A330neo. But on the condition they get built in China from here on out.

CFRPwingALbody wrote:

:idea: Airbus still has 27x A330MRTT and 4x A330F left to deliver. AFAIK especially the MRTT conversion is time consuming. This production rate decrease could very well be caused by a increase of MRTT and Freighter production on the A330 FAL line. The FAL could very well be running at a higher rate than deliveries for about two years time.
What also stands out, is the fact that Airbus build the A330 completion center in China, but there are no A330NEO orders from China.
But indeed it's not surprising A330 production drops further.

It doesn’t take longer to build a MRTT and freighter than a pax A330 on the FAL. The MRTT is built as a green aircraft, then “delivered” to Airbus Military who performs the necessary conversions elsewhere. It doesn’t roll off the FAL as a completed MRTT and delivered straight to the final customer.

bigjku wrote:

RickNRoll wrote:

IIRC the A330 boost to production was to take advantage of a peak in demand and it was always going to drop again.

Not really.

Rate was supposed to be 84 to 96 a year out the gate and was touted as being up to 120 a year. We are at something like half the original intended rate now.

That’s a lot of cash not moving for Airbus. Figure $100 million a piece so the revenue off this line is going to be several billion a year less than initially projected. Taken anyway you want that stings. Even just the cut from the lower 67 a year rate means revenue drops around $2 billion per year.

Even Reuters (an EU-based outfit) seemed to be throwing dirt on the grave of the A330neo:

Airbus said it was reducing deliveries of the 250-300-seat A330 to around 50 aircraft in 2019, compared with 67 last year and 60 planned for 2018. That comes after an upgraded version due to enter service this year failed to sell as it had hoped.

Ref: https://www.reuters.com/article/us-airb ... SKBN1HY0E2

At this point in time A320 is the only real cash cow in the Airbus portfolio, and the PW engine issues have it hobbled. A350 is too early in its ramp up to be generating lots of cash. A380 of course is in the red. A330 was being counted on to move in much higher volumes. Both A330neo and A350 are being impacted directly or indirectly by RR's need to focus on so many issues at once.

The shift of resources from A320+/++ to A320 production makes more sense now. They've got to milk the A320 line for all it's worth in the near term future.

bigjku wrote:

If I am China I would order 300 or more A330neo. But on the condition they get built in China from here on out.

I was thinking the same thing. China is the one place that would be able to take a lot of A330s. They already have the completion center. They already have an A320 FAL. They already build A320 wings. It feels risky to me to move so much intellectual property to China (who has a terrible record for protecting IP) but whatever Airbus is doing so far to shift A330s is not working.

If Airbus sits on its hands for too long, it will find A330 undermined by NMA from below and 787 from above.

IndianicWorld wrote:

It’s all part of the cycle really, IMHO.

Boeing had its struggles a few years ago where so much seemed to be heading off course for them, and Airbus is currently experiencing some pain.

The product range is strong and orders are still significant, so once it has ironed out its issues (mainly with engine manufacturers), it should be ready to gain momentum again for the future.

The ideal time for the 330neo to have gained order momentum was 2-3 years ago. When purchase price and slot availability were actually legitimate advantages instead of A.net "wisdom". Airbus will have a tough time getting per-unit production costs low enough when production rates are less than half projected..

Boeing could well be delivering more Dreamliners per year than all (3) Airbus WB programs put together.

IndianicWorld wrote:

It’s all part of the cycle really, IMHO.

Boeing had its struggles a few years ago where so much seemed to be heading off course for them, and Airbus is currently experiencing some pain.

The product range is strong and orders are still significant, so once it has ironed out its issues (mainly with engine manufacturers), it should be ready to gain momentum again for the future.

Thing is, they have been generating actual cash for quite a while now.

Check out the graph in the middle of https://www.bloomberg.com/gadfly/articl ... ts-on-cash .

Boeing is generating large amounts of cash over the last five years, and Airbus is not in the same league.

sergegva wrote:

With 50/year they already have around 6 years of production in their backlog. That still leaves reasonable time to sell a few more A330neo.

I think it all depends on China. The majority of A330 deliveries last year went to China. There is plenty of time for Chinese Airlines to order the A330neo. The question is will they? Do they need more widebodies and if they do will they choose the A330neo or go towards the 787 or NMA?

Fleet Commonality has to be an important factor - having, I say, 300 pilots with A330 Type Rating and don't have to pay them another type rating, i.e. for the 787, can save mucho dinero

IndianicWorld wrote:

It’s all part of the cycle really, IMHO.

Boeing had its struggles a few years ago where so much seemed to be heading off course for them, and Airbus is currently experiencing some pain.

The product range is strong and orders are still significant, so once it has ironed out its issues (mainly with engine manufacturers), it should be ready to gain momentum again for the future.

I think blaming cycles is a bit of a cop out. I also think the constant refrain of “wait for the replacement cycle” is ringing hollow. If the replacement cycle was in 2 years why not EIS then and have two year better engines?

The product range is ok. But in the last year or two we have seen A380 rate cuts, A330 rate cuts and tepid A350 orders. Securing the right to lose money building A380’s for more years isn’t exactly an achievement. The A330neo business case as made by multiple parties even outside of Airbus was based almost 100% on low acquisition cost but it doesn’t appear they can beat the 787 and they are headed the wrong way with this rate cut.

Leeham in particular mocked Boeing statements that Airbus had a mess with its widebody strategy and the A330neo would be dead on arrival. Well that don’t look like insane statements now. They may be a bit overstated but they were treated like the ravings of a madman when they came out by some.

bigjku wrote:

RickNRoll wrote:

IIRC the A330 boost to production was to take advantage of a peak in demand and it was always going to drop again.

Not really.

Rate was supposed to be 84 to 96 a year out the gate and was touted as being up to 120 a year. We are at something like half the original intended rate now.

That’s a lot of cash not moving for Airbus. Figure $100 million a piece so the revenue off this line is going to be several billion a year less than initially projected. Taken anyway you want that stings. Even just the cut from the lower 67 a year rate means revenue drops around $2 billion per year.

Not really, the A330 has been at rate 6 ( 66 per year ) for a couple of years now. Airbus had hoped to go up to rate 7 ( 77 per year ) but called that off last year when sales weren’t forthcoming. The new figure of 50 next year is a reduction from 66.

Geoff

Geoff1947 wrote:

bigjku wrote:

RickNRoll wrote:

IIRC the A330 boost to production was to take advantage of a peak in demand and it was always going to drop again.

Not really.

Rate was supposed to be 84 to 96 a year out the gate and was touted as being up to 120 a year. We are at something like half the original intended rate now.

That’s a lot of cash not moving for Airbus. Figure $100 million a piece so the revenue off this line is going to be several billion a year less than initially projected. Taken anyway you want that stings. Even just the cut from the lower 67 a year rate means revenue drops around $2 billion per year.

Not really, the A330 has been at rate 6 ( 66 per year ) for a couple of years now. Airbus had hoped to go up to rate 7 ( 77 per year ) but called that off last year when sales weren’t forthcoming. The new figure of 50 next year is a reduction from 66.

Geoff

It’s a reduction from where it has been but it wasn’t projected to get there. The rates I quoted were from Leahey’s own statements.

http://m.aviationweek.com/farnborough-2 ... 30neo-rate

Going down to present levels has been because sales flagged. The question of course is what cost basis were airframes prices at. I suspect it was 7-8 so an annual rate of 84-96. So we are now roughly half that rate only 4 years later.

The A330neo is also a bit unique in that a huge portion of its business case is based on low capital cost. To compete with the 787 they expected it to cost 25% less. That appears to be out the window.

bigjku wrote:

Rate was supposed to be 84 to 96 a year out the gate and was touted as being up to 120 a year.

Airbus did achieve a peak production rate of 10 (110 p.a.) just before the A350 began deliveries. IIRC, this was cut to 8 and then to the present day 6.

SC430 wrote:

Boeing could well be delivering more Dreamliners per year than all (3) Airbus WB programs put together.

That’s very necessary for Boeing because the 787 is all they have as a passenger widebody for the next few years.

Geoff

Geoff1947 wrote:

SC430 wrote:

Boeing could well be delivering more Dreamliners per year than all (3) Airbus WB programs put together.

That’s very necessary for Boeing because the 787 is all they have as a passenger widebody for the next few years.

Geoff

That’s funny. Not sure why it matters how they are used exactly.

Here are what the projected rates seem to be.

Boeing

767- 36
787- 168
777- 42
747- 6

Total: 252

Airbus

A330- 50
A350- 120
A380- 6

Total: 176

We may see more A350 production but we may not. Speculation of rate 13 has been frequent but was predicted for as early as 2019. It is getting late to make such an announcement and if you could increase it would have been ideal for right now with the rate cut news. I don’t expect it. Leeham is additionally speculating additional increases on the 767 rate so if we add some A350 we probably need to add some 767 as well.

I think the 777 and A330 are candidates for additional potential cuts and I don’t see the A350 rate going up to 13 in 2019. I expect the 787 to have orders outpace deliveries the next three years.

bigjku wrote:

IndianicWorld wrote:

It’s all part of the cycle really, IMHO.

Boeing had its struggles a few years ago where so much seemed to be heading off course for them, and Airbus is currently experiencing some pain.

The product range is strong and orders are still significant, so once it has ironed out its issues (mainly with engine manufacturers), it should be ready to gain momentum again for the future.

I think blaming cycles is a bit of a cop out. I also think the constant refrain of “wait for the replacement cycle” is ringing hollow. If the replacement cycle was in 2 years why not EIS then and have two year better engines?

The product range is ok. But in the last year or two we have seen A380 rate cuts, A330 rate cuts and tepid A350 orders. Securing the right to lose money building A380’s for more years isn’t exactly an achievement. The A330neo business case as made by multiple parties even outside of Airbus was based almost 100% on low acquisition cost but it doesn’t appear they can beat the 787 and they are headed the wrong way with this rate cut.

Leeham in particular mocked Boeing statements that Airbus had a mess with its widebody strategy and the A330neo would be dead on arrival. Well that don’t look like insane statements now. They may be a bit overstated but they were treated like the ravings of a madman when they came out by some.

This post implies the Airbus wide body production rate cut results from an non competitive product offering, not a cyclical market downturn. I would argue Airbus AND Boeing face difficult market conditions in the wide body market, not just our friends at Blagnac. The A330neo sales campaign has been difficult for Airbus primarily due to TIMING, not a poor, or non competitive product offering. Most orders for this market segment, 250-300 passenger frames, were placed over 5 years ago, well before Airbus announced the 2014 launch of the A330neo project. Wide body sales have been weak over the past couple of years and the A330neo project has yet to achieve certification!

Let's wait a few more years and see Airbus collect orders from carriers before claiming the A330neo is 'non competitive' with the Dreamliner

Your figures could be pretty close for Airbus this year and next. Boeing are down from their high of 258 in 2015 and will probably be around 220/230 for this year and next, including all their freighters and military variants !!

Geoff

Geoff1947 wrote:

Your figures could be pretty close for Airbus this year and next. Boeing are down from their high of 258 in 2015 and will probably be around 220/230 for this year and next, including all their freighters and military variants !!

Geoff

To be clear those aren’t what I expect this year. It’s what the announced rates for each program work out to. Basically it’s where each company is actively steering towards at this time.

JustSomeDood wrote:

IndianicWorld wrote:

It’s all part of the cycle really, IMHO.

Boeing had its struggles a few years ago where so much seemed to be heading off course for them, and Airbus is currently experiencing some pain.

The product range is strong and orders are still significant, so once it has ironed out its issues (mainly with engine manufacturers), it should be ready to gain momentum again for the future.

The ideal time for the 330neo to have gained order momentum was 2-3 years ago. When purchase price and slot availability were actually legitimate advantages instead of A.net "wisdom". Airbus will have a tough time getting per-unit production costs low enough when production rates are less than half projected..

Actually 2-3 years ago was an ideal time for the A330ceo to have some order momentum, and it actually did.

PDPsol wrote:

bigjku wrote:

IndianicWorld wrote:

It’s all part of the cycle really, IMHO.

Boeing had its struggles a few years ago where so much seemed to be heading off course for them, and Airbus is currently experiencing some pain.

The product range is strong and orders are still significant, so once it has ironed out its issues (mainly with engine manufacturers), it should be ready to gain momentum again for the future.

I think blaming cycles is a bit of a cop out. I also think the constant refrain of “wait for the replacement cycle” is ringing hollow. If the replacement cycle was in 2 years why not EIS then and have two year better engines?

The product range is ok. But in the last year or two we have seen A380 rate cuts, A330 rate cuts and tepid A350 orders. Securing the right to lose money building A380’s for more years isn’t exactly an achievement. The A330neo business case as made by multiple parties even outside of Airbus was based almost 100% on low acquisition cost but it doesn’t appear they can beat the 787 and they are headed the wrong way with this rate cut.

Leeham in particular mocked Boeing statements that Airbus had a mess with its widebody strategy and the A330neo would be dead on arrival. Well that don’t look like insane statements now. They may be a bit overstated but they were treated like the ravings of a madman when they came out by some.

This post implies the Airbus wide body production rate cut results from an non competitive product offering, not a cyclical market downturn. I would argue Airbus AND Boeing face difficult market conditions in the wide body market, not just our friends at Blagnac. The A330neo sales campaign has been difficult for Airbus primarily due to TIMING, not a poor, or non competitive product offering. Most orders for this market segment, 250-300 passenger frames, were placed over 5 years ago, well before Airbus announced the 2014 launch of the A330neo project. Wide body sales have been weak over the past couple of years and the A330neo project has yet to achieve certification!

Let's wait a few more years and see Airbus collect orders from carriers before claiming the A330neo is 'non competitive' with the Dreamliner

This order “drought” in the 250-300 segment since the A330neo launch is an oft repeated myth. From Jan 2015 to March 2018 there have been 544 net orders between the A330/787- 310 for the 787, 93 for the A330neo, and 141 for the ceo. Note these numbers don’t include the recent AA order, or MoU’s like EK’s and HA’s. For comparison the previous three years (2012 through 2014, a longer time frame than I just talked about) had 546 orders- 265 for the 787, 121 for the A330neo (available only for last 6 months of that timeframe) and 160 for the A330ceo. The three years prior to that (2009 through 2011) only had 286- 94 for the 787 and the balance for the A330(ceo obviously).

So orders in the segment have been steady and actually have upticked slightly, unless your product is called the A330neo. In the last 6 months we have had a TK order for 25 787s, an AA order for 47, and an EK MOU for 40 787s. That is 112 planes right there. At some point you have to open your eyes and stop digging your head in the “well it’s just an order drought” sand.

¿When is the delivery of new A330's for LEVEL?

MrHMSH wrote:

JustSomeDood wrote:

IndianicWorld wrote:

It’s all part of the cycle really, IMHO.

Boeing had its struggles a few years ago where so much seemed to be heading off course for them, and Airbus is currently experiencing some pain.

The product range is strong and orders are still significant, so once it has ironed out its issues (mainly with engine manufacturers), it should be ready to gain momentum again for the future.

The ideal time for the 330neo to have gained order momentum was 2-3 years ago. When purchase price and slot availability were actually legitimate advantages instead of A.net "wisdom". Airbus will have a tough time getting per-unit production costs low enough when production rates are less than half projected..

Actually 2-3 years ago was an ideal time for the A330ceo to have some order momentum, and it actually did.

It’s possible that that momentum, while having short term gain for the ceo, did long term hard to the Neo program. In this low fuel price environment it set very low price expectations for the Neo, and delayed ceo replacements.

The A330ceo benefitted tremously from Boeing f-ing up the 787, but it could never long term compete against the 787 (something Airbus recognized, or else they would not have wasted time or money on a Neo program in the first place). We are starting to see that now as Boeing is putting it’s 787 problems behind them and A330ceo pax orders are beginning to dry up except for an occasional top up order here or there. The problem for Airbus is the Neo appears to be struggling to pick up where the ceo left off.

The beginning of the end. With such a low production rate, they can not compete with the 787 on price and this weakens the weak position even further.

PDPsol wrote:

bigjku wrote:

IndianicWorld wrote:

It’s all part of the cycle really, IMHO.

Boeing had its struggles a few years ago where so much seemed to be heading off course for them, and Airbus is currently experiencing some pain.

The product range is strong and orders are still significant, so once it has ironed out its issues (mainly with engine manufacturers), it should be ready to gain momentum again for the future.

I think blaming cycles is a bit of a cop out. I also think the constant refrain of “wait for the replacement cycle” is ringing hollow. If the replacement cycle was in 2 years why not EIS then and have two year better engines?

The product range is ok. But in the last year or two we have seen A380 rate cuts, A330 rate cuts and tepid A350 orders. Securing the right to lose money building A380’s for more years isn’t exactly an achievement. The A330neo business case as made by multiple parties even outside of Airbus was based almost 100% on low acquisition cost but it doesn’t appear they can beat the 787 and they are headed the wrong way with this rate cut.

Leeham in particular mocked Boeing statements that Airbus had a mess with its widebody strategy and the A330neo would be dead on arrival. Well that don’t look like insane statements now. They may be a bit overstated but they were treated like the ravings of a madman when they came out by some.

This post implies the Airbus wide body production rate cut results from an non competitive product offering, not a cyclical market downturn. I would argue Airbus AND Boeing face difficult market conditions in the wide body market, not just our friends at Blagnac. The A330neo sales campaign has been difficult for Airbus primarily due to TIMING, not a poor, or non competitive product offering. Most orders for this market segment, 250-300 passenger frames, were placed over 5 years ago, well before Airbus announced the 2014 launch of the A330neo project. Wide body sales have been weak over the past couple of years and the A330neo project has yet to achieve certification!

Let's wait a few more years and see Airbus collect orders from carriers before claiming the A330neo is 'non competitive' with the Dreamliner

Orders in last 2 years and 3 months (basically from date Boeing called Airbus widebody strategy a mess).

Boeing

767- 48
777- 85
787- 126 (doesn’t include AA or EK or Hawaiian yet)
747- 30

Total: 289

Airbus

A350- 77 (not including 22 AA cancellations yet)
A380- 12
A330- 54

Total: 143

And half those A330 orders are to Iran which may not go through. Once American, Hawaiian and EK go firm Boeing will have sold 223 787’s so the market isn’t that slow for everyone. Hell the burn rate for Boeing this year if those orders firm will be like 5 airframes. The average burn rate for the 787 backlog will be around 50 if that occurs since they hit rate 12. And they likely aren’t done this year.

Compare that to the burn rates Airbus and Boeing saw on the 777 and A330. Both were able to sustain rate 100 for 4 years or so before they started seeing huge production drops as they couldn’t flow in orders fast enough.

The A330neo may be a mistake. The 748 was a mistake. People can keep saying it’s timing or replacement cycles or whatever. But it keeps losing. Again it’s selling point was capital cost. It’s not appreciably cheaper when everyone who was lauding it did so on the basis it would cost 20-25% less. It’s not insulting to say this has a major impact.

Polot wrote:

MrHMSH wrote:

JustSomeDood wrote:

The ideal time for the 330neo to have gained order momentum was 2-3 years ago. When purchase price and slot availability were actually legitimate advantages instead of A.net "wisdom". Airbus will have a tough time getting per-unit production costs low enough when production rates are less than half projected..

Actually 2-3 years ago was an ideal time for the A330ceo to have some order momentum, and it actually did.

It’s possible that that momentum, while having short term gain for the ceo, did long term hard to the Neo program. In this low fuel price environment it set very low price expectations for the Neo, and delayed ceo replacements.

The A330ceo benefitted tremously from Boeing f-ing up the 787, but it could never long term compete against the 787 (something Airbus recognized, or else they would not have wasted time or money on a Neo program in the first place). We are starting to see that now as Boeing is putting it’s 787 problems behind them and A330ceo pax orders are beginning to dry up except for an occasional top up order here or there. The problem for Airbus is the Neo appears to be struggling to pick up where the ceo left off.

I'd agree to an extent, the A330ceo and neo did and maybe still do 'compete' for orders, but then even now I don't see *that* much of a downside for them to have sold A330ceos in the meantime: there was nothing else to sell in the timeframe, and if I'm right the margins were quite good?

In some ways the neo has picked up, it's got a sizeable customer base through lessors and gets small orders. Time will tell whether the HA and AA deals are going to be the norm, it has to be said that the HA order was quite unique as it was an orphan model and I maintain that at AA the 787 would always have been the frontrunner. Right now though they are only 2 deals, and some potential deals are on the horizon where the odds shift more to the A330 (such as ME) and we may see it win out. Airbus will be hurting from the 787's recent successes and may be keen to strike back with big-name airshow deals... as they have tended to do in the past.

Geoff1947 wrote:

SC430 wrote:

Boeing could well be delivering more Dreamliners per year than all (3) Airbus WB programs put together.

That’s very necessary for Boeing because the 787 is all they have as a passenger widebody for the next few years.

Geoff

I'm pretty sure the 777 line is still running.

MrHMSH wrote:

Polot wrote:

MrHMSH wrote:

Actually 2-3 years ago was an ideal time for the A330ceo to have some order momentum, and it actually did.

It’s possible that that momentum, while having short term gain for the ceo, did long term hard to the Neo program. In this low fuel price environment it set very low price expectations for the Neo, and delayed ceo replacements.

The A330ceo benefitted tremously from Boeing f-ing up the 787, but it could never long term compete against the 787 (something Airbus recognized, or else they would not have wasted time or money on a Neo program in the first place). We are starting to see that now as Boeing is putting it’s 787 problems behind them and A330ceo pax orders are beginning to dry up except for an occasional top up order here or there. The problem for Airbus is the Neo appears to be struggling to pick up where the ceo left off.

I'd agree to an extent, the A330ceo and neo did and maybe still do 'compete' for orders, but then even now I don't see *that* much of a downside for them to have sold A330ceos in the meantime: there was nothing else to sell in the timeframe, and if I'm right the margins were quite good?

In some ways the neo has picked up, it's got a sizeable customer base through lessors and gets small orders. Time will tell whether the HA and AA deals are going to be the norm, it has to be said that the HA order was quite unique as it was an orphan model and I maintain that at AA the 787 would always have been the frontrunner. Right now though they are only 2 deals, and some potential deals are on the horizon where the odds shift more to the A330 (such as ME) and we may see it win out. Airbus will be hurting from the 787's recent successes and may be keen to strike back with big-name airshow deals... as they have tended to do in the past.

Exactly, no one can claim Airbus 'made a mistake' by developing and marketing the A330neo. The model has yet to be certified and enter service. Once new models start operating profitably, other carriers start to take notice and place orders! No is 'sticking their head in the sand' stating the A330neo is a 'competitive' offering relative to the Dreamliner. Boeing is currently winning more orders for its B787, compared to Airbus and its A330neo, but that does not mean the model is 'non competitive'.

kitplane01 wrote:

Geoff1947 wrote:

SC430 wrote:

Boeing could well be delivering more Dreamliners per year than all (3) Airbus WB programs put together.

That’s very necessary for Boeing because the 787 is all they have as a passenger widebody for the next few years.

Geoff

I'm pretty sure the 777 line is still running.

Not only is the 777 line still running, but it is selling better and has a larger backlog than the A330. 747 & 767's are icing on the cake

The “EIS bounce” is another myth. It did not happen with the A380. It did not happen with the 787. It did not happen with the A350. Airlines are not stupid- they don’t need to wait until EIS to suddenly notice the aircraft, or to determine if the aircraft will be profitable in their operations or not.

It only happens if the aircraft significantly beats expectations. Airbus appears to not be anticipating a huge positive surprise if they believe they will not get enough orders soon to maintain current production rates. Remember Airbus/Boeing know orders that are about to come down the pipeline before we do. They have that in mind when determining production rate increases (as Boeing did with the 787, which many thought was stupid/surprising because we are supposedly in a order “slump”) or decreases (as Airbus is doing with A330).

PDPsol wrote:

MrHMSH wrote:

Polot wrote:

It’s possible that that momentum, while having short term gain for the ceo, did long term hard to the Neo program. In this low fuel price environment it set very low price expectations for the Neo, and delayed ceo replacements.

The A330ceo benefitted tremously from Boeing f-ing up the 787, but it could never long term compete against the 787 (something Airbus recognized, or else they would not have wasted time or money on a Neo program in the first place). We are starting to see that now as Boeing is putting it’s 787 problems behind them and A330ceo pax orders are beginning to dry up except for an occasional top up order here or there. The problem for Airbus is the Neo appears to be struggling to pick up where the ceo left off.

I'd agree to an extent, the A330ceo and neo did and maybe still do 'compete' for orders, but then even now I don't see *that* much of a downside for them to have sold A330ceos in the meantime: there was nothing else to sell in the timeframe, and if I'm right the margins were quite good?

In some ways the neo has picked up, it's got a sizeable customer base through lessors and gets small orders. Time will tell whether the HA and AA deals are going to be the norm, it has to be said that the HA order was quite unique as it was an orphan model and I maintain that at AA the 787 would always have been the frontrunner. Right now though they are only 2 deals, and some potential deals are on the horizon where the odds shift more to the A330 (such as ME) and we may see it win out. Airbus will be hurting from the 787's recent successes and may be keen to strike back with big-name airshow deals... as they have tended to do in the past.

Exactly, no one can claim Airbus 'made a mistake' by developing and marketing the A330neo. The model has yet to be certified and enter service. Once new models start operating profitably, other carriers start to take notice and place orders! No is 'sticking their head in the sand' stating the A330neo is a 'competitive' offering relative to the Dreamliner. Boeing is currently winning more orders for its B787, compared to Airbus and its A330neo, but that does not mean the model is 'non competitive'.

The model "has yet to be certified and enter service" argument doesn't really hold a lot of water though for something like an A330neo that is very clearly a derivative of an existing, proven platform. The A320neo and the 737MAX both had blockbuster orders before they were certified and entered service, customers weren't waiting around for them to enter service before they racked up strong sales.

We'll probably know a LOT more after Farnborough. One reason I tend to keep my mouth shut in this type of thread is because sometimes these things turn on a dime. Last year, the news was what DIDN'T sell. This year, I'm guessing (hoping) it'll be what DOES sell.

quote thread title "Airbus Cuts Production Plans for A330 Jet"

As opposed to the A330 Prop or Glider versions?

It's never to late to join the long and impressive list of experts that during the last 15 years prematurely wrote off the A330.

What's the production rate of 777s these days? 8 a month?

PlanesNTrains wrote:

We'll probably know a LOT more after Farnborough. One reason I tend to keep my mouth shut in this type of thread is because sometimes these things turn on a dime. Last year, the news was what DIDN'T sell. This year, I'm guessing (hoping) it'll be what DOES sell.

We know right now that Airbus is reducing the production rate. They would not have done if they would expect enough orders in the near future to maintain the current rate or even increase it. So we can wait until Farnborough to discuss this, but it's most likely will be giving more reasons why Airbus decided this right now.


It's an interesting business case to investigate. Why did the A330 orders suddenly just dry up afters years of tremendous successes.

aeromoe wrote:

quote thread title "Airbus Cuts Production Plans for A330 Jet"

As opposed to the A330 Prop or Glider versions?

With the way things are going with the engine makers right now...

PlanesNTrains wrote:

We'll probably know a LOT more after Farnborough. One reason I tend to keep my mouth shut in this type of thread is because sometimes these things turn on a dime. Last year, the news was what DIDN'T sell. This year, I'm guessing (hoping) it'll be what DOES sell.

This is Airbus’s first air show in decades without Leahy. Who knows how it is going to go- we might be looking at a much more subdued Airbus now. The production rate decrease does suggest that Airbus does not have hundreds of A330neo that it is waiting to pull out of its hat though. Obviously the A330neo will get some orders, the 787 doesn’t make sense for all carriers.

The A330neo is doing just fine. Having it in portfolio ensures Boeing needs to price the 787 so low they will never recoup the deferred costs (about 25 billion now) on that program. So if nothing else it's the best spoiler in town.

JustSomeDood wrote:

IndianicWorld wrote:

It’s all part of the cycle really, IMHO.

Boeing had its struggles a few years ago where so much seemed to be heading off course for them, and Airbus is currently experiencing some pain.

The product range is strong and orders are still significant, so once it has ironed out its issues (mainly with engine manufacturers), it should be ready to gain momentum again for the future.

The ideal time for the 330neo to have gained order momentum was 2-3 years ago. When purchase price and slot availability were actually legitimate advantages instead of A.net "wisdom". Airbus will have a tough time getting per-unit production costs low enough when production rates are less than half projected..

To build on Justsimedood's comment:. Cutting the production will add about 10% to the cost of building the aircraft w/nacelles. The engine economy of scale isn't as impacted due to T1000 production.

The costs would have gone up 15% or so if it wasn't for part commonality and demand for parts from the in service fleet.

Not crippling, but not good. About a 6% increase from the 110 build rate over-all. Maybe only a 2.5% increase from this year. But certainly not helping with the 787 at 3x the rate or 10% to 15% lower overall cost just from economy of scale.

For the record, I cannot understand why the 747 and A380 remain in production. Everything I know about economy of scale falls apart below 25 per year.

Lightsaber