Airbus Weighs Costs, Rivals’ Advances in Engine Upgrade Choice

Titlu: Airbus Weighs Costs, Rivals’ Advances in Engine Upgrade Choice
Autori: Rachel Layne and Andrea Rothman
Sursa: http://www.airbuzz.ro/2010/03/embraer-120-prabusit-in-australia.html
Data: 19.03.2010

Citat :

Airbus SAS, deciding whether to replace the engines on its best-selling A320 jets with more fuel-efficient ones, is debating whether it would be too expensive and not save enough to satisfy airline customers.
“Even inside Airbus, you have people saying, ‘Why spend money when we are earning so much money with the current airplane?’” Louis Gallois, chief executive officer of European Aeronautic, Defence & Space Co., said at a New York briefing with reporters yesterday. “It’s a bestseller,” he said, so the choice “is not an easy one.”
Airbus and Boeing Co., whose respective A320 and 737 models dominate the commercial aerospace market, say they will decide this year whether to offer existing models with new engines that are about 15 percent more fuel efficient than current ones. The planemakers risk lowering the value of their total backlog of 4,500 narrow-body aircraft by putting better- performing versions on the market.
Still, it would give the two a product to compete with jets being developed by smaller rivals including Bombardier Inc. and China’s state-owned company, Comac, until they introduce their own all-new narrow-body planes. Bombardier’s CSeries and Comac’s C919 would offer engines that may boost fuel efficiency 15 percent, and Toulouse, France-based Airbus and Chicago-based Boeing have said they won’t sell new narrow-body models until the mid-2020s.
Some customers want a new plane sooner. US Airways Group Inc. will begin taking delivery of 54 Airbus aircraft by 2013 and doesn’t expect planes with the new engines to be available by then, said James Olson, a spokesman for the airline.
Justifying the Cost
“It’s up to the manufacturers to figure out whether they can put an engine on that can produce the savings required to justify the higher purchasing cost to airlines,” Olson said.
Replacing engines on current Boeing and Airbus models may not reach optimum efficiency because the combination would be heavier than an all-new plane. That might reduce improvement to less than 10 percent while the plane would still cost more than current models because of the new technology.
“If the CSeries does what it is supposed do, then a re- engined 737NG or A320 isn’t a good enough response,” said Hal Calamvokis, strategic planning manager at EasyJet Plc, which flies mainly Airbus A319s.
While EasyJet is having “ongoing discussions with Bombardier,” the CSeries’ current maximum capacity of 145 passengers is too small to meet the airline’s needs and its range is greater than the Luton, England-based company requires, Calamvokis said.
The A320 and 737 both seat as many as 200 passengers, depending on the model.
‘Full Evaluation’
If Montreal-based Bombardier stretches the CSeries and expands its seating to accommodate about 165 passengers, its range would decrease and the aircraft might work for EasyJet.
“At that point, we’d definitely have to do a full evaluation,” Calamvokis said.
Competition from the CSeries on the smallest versions of Airbus’s narrow-body planes, the A318 and A319, as well as China’s planned plane, is a factor in the company’s decision, Gallois said.
“Airlines will have a reference for engines, and they could consider that we may not have the best engines” on current narrow-body planes, Gallois said. “It could push us. On the other side, we also have to take into consideration the cost of re-engineing and amortizing the life of the airplane. And we have to see what kind of difference in price we have between that and the new airplane.”
Narrow-body Engine Market
Executives and analysts estimate redesigning an existing airframe to support a new engine would cost $1 billion, compared with $10 billion to develop a new plane. The market for a new, more fuel-efficient engine over the life of a narrow-body aircraft may be as much as $50 billion, manufacturers have forecast.
Bombardier’s CSeries, which will debut Pratt & Whitney’s geared turbofan engine, is slated to enter the market in 2013. Comac’s C919, with new engines from CFM International, is scheduled to arrive in 2016.
CFM, a venture of Fairfield, Connecticut-based General Electric Co. and Paris-based Safran SA, has said its Leap-X engine will boost fuel efficiency about 15 percent, similar to the improvement in Pratt & Whitney’s power plant.
Current Airbus models offer a choice of engines made by CFM or International Aero Engines, a venture led by Pratt & Whitney and London-based Rolls-Royce Group Plc. Current Boeing 737 models only offer CFM engines.
Pratt, Rolls-Royce
While Pratt & Whitney and Rolls-Royce have yet to decide how to market a more efficient narrow-body engine, they said they prefer to do so through the IAE partnership in order to compete with CFM.
John Leahy, Airbus’s chief operating officer, said at a conference in Orlando this week the company only wants to offer engines for an upgrade via the two teams.
Airbus has said it may target 2024 for an all-new aircraft to enter service.
“We would like to know what choices are available to us at what periods of time,” said Mike Van de Ven, chief operating officer of Southwest Airlines Co., whose fleet is made up solely of Boeing 737s. Boeing is “going to have to have a product choice that competes” with Bombardier’s new model and a potential upgrade from Airbus, he said.
Boeing will consider technical and business vantage points before making its decision, Randy Tinseth, the company’s marketing chief, said in an interview this week.
‘What Our Customers Want’
“It’s more important that we look less at competition and more at what our customers want,” Tinseth said. “We want to have a plan at the end of the year, but doing nothing is always an option. Re-engineing is an option, and a new airplane is an option.”
EADS climbed 15 cents to close at 14.83 euros in Paris trading, and the shares have gained 5.3 percent this year. Boeing gained 59 cents to $71.46 at 2:17 p.m. in New York Stock Exchange composite trading.
--With assistance from Gopal Ratnam in Washington, Susanna Ray in Seattle and Mary Schlangenstein in Dallas. Editors: James Langford, Kevin Orland, Will Daley
To contact the reporters on this story: Rachel Layne in Boston at rlayne@bloomberg.net. Andrea Rothman in Paris at aerothman@bloomberg.net.
To contact the editor responsible for this story: Kevin Miller at kmiller@bloomberg.net