Airbus to Offer More Fuel-Efficient Version of A320 Model Starting in 2016

Airbus SAS said it plans to offer its A320 series of aircraft with an option of more fuel-efficient engines to help defend its stake of the single-aisle jet market.

The company will start delivering the new versions starting in early 2016 and predicted a market potential of as many as 4,000 aircraft for the type over 15 years, the Toulouse, France- based manufacturer said in a statement today. Airlines can choose two new engine options on the jets, dubbed A320 NEO, or opt for the existing power plants, according to the release.

Airbus is seeking to extend the life of the top-selling A320, which entered service in 1988, before work begins on a new single-aisle jet that probably wouldn’t be ready before the mid- 2020s. Boeing Co. is considering an upgrade of its 737, and planemakers from Canada and China also are entering the market. Airbus studied the upgrade for more than a year, as it weighed the risk of deploying engineers needed on other aircraft.

“Finding the necessary resources for the A320 NEO wasn’t exactly a walk in the park,” Airbus Chief Executive Officer Tom Enders said in the statement. “We are confident that the A320 NEO will be a great success across all markets and with all types of operators, offering them maximum benefit with minimum change.”

Different Variants

Airlines can now order A320s and related variants either with the new power plants, picking between Pratt & Whitney or the CFM International joint venture owned by General Electric Co. and Safran SA, or stick with existing engines that have powered the A320 since its creation. Other variants of the plane including the larger A321, seating 180, and the smaller A319 with 124 passengers.

Both the A320 and 737 are twin-engine models that seat about 125 to 185 people. List prices for each plane range from about $65 million to $95 million, depending on the version.

The new engine option incorporates large wing-tip devices that help save fuel and increase range, dubbed “sharklets” by Airbus. Modifying the series will cost as much as $1.5 billion, a fraction of the $10 billion an all-new aircraft development program can cost, Airbus has said.

The A320 NEO’s increased fuel efficient will reduce carbon emissions, with the potential to cut 3,600 tons of CO2 savings annually per aircraft, Airbus said.

Geared Turbofan

The two new engines will be the geared-turbofan engine developed by United Technologies Corp.’s Pratt, or the Leap-X engine being created by CFM International. Bombardier Inc. also plans to use the Pratt geared turbofan on its new C-Series jet.

In studying the merits of the A320 NEO, Airbus, the planemaking unit of European Aeronautic, Defence and Space Co., had to consider the risk of committing additional engineers who may be needed to finish developing the wide-body A350 model due to enter service by the end of 2013. Airbus is also still ramping up production of its A380 superjumbo aircraft.

Boeing continues to make improvements to its 737 and remains open to what the next approach will be, Jim Proulx, a spokesman, said yesterday in an interview.

“We have the option of offering a new engine for the 737,” he said. “Customer feedback to date has been mixed, and on balance, has been against a new engine but it’s still a consideration and it’s a technically viable option. We are continuing to evaluate the potential of a new airplane.”

The step would be more challenging for the Chicago-based manufacturer because the aircraft already sits so close to the ground that the landing gear would need to be redesigned to allow clearance for the newer, bigger engines.

For Pratt, supplying Airbus would mark the company’s return as a solo engine maker to the biggest slice of the commercial airplane market and a victory for United Technologies Chief Executive Officer Louis Chenevert, who spent more than a decade championing the program. GE and Safran dominate the narrow-body engine market with the CFM engine, the sole choice on the 737.

To contact the reporter on this story: Andrea Rothman in Paris at aerothman@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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