Airbus Double-Shrink A318 Stumped for Buyers After 10-Year Run

Airbus SAS has handed over the last A318 plane left in its backlog to a corporate VIP customer, leaving its smallest and least successful model without remaining orders for the first time in 10 years of production.

The 107-seat model won only 79 orders since it went on sale in 1998, equivalent to about two months of output of the entire A320 family, which has garnered more than 9,000 commitments. A quarter of the A318s built, including the last one shipped, went to corporate customers, who are typically less concerned with the economics of an aircraft than commercial operators.

The A318 is heavy relative to the number of passengers it carries because it is what’s called a shrink of a shrink in aviation parlance. The baseline model was the A320, seating 150. Airbus first cut out several fuselage panels to offer the shortened A319, with 124 passengers, and then compressed the body even further to create the stumpy A318. Boeing Co. (BA)’s similarly compact 737-600 has also sold poorly.

“Double shrinks like the A318 and 737-600 work well as niche planes for thin routes when oil is cheap, but high fuel prices mean they are way too expensive to operate,” said Richard Aboulafia, vice president of the Teal Group, a Fairfax, Virginia-based consultant.

Full Spectrum

Airbus offered the A318 to ensure a spectrum of single- aisle models as complete as Boeing’s. Ultimately, the plane struggled to find its purpose, as it was too heavy to compete with regional jets and offer good operating economics. The A318 is the only member of Airbus’s single-aisle family not to be on offer with new engines, highlighting the lack of faith in the model’s sustainability.

The A318, with a list price of $70.1 million, remains on offer, both for airliners and as a corporate jet, said Marcella Muratore, a spokeswoman for Airbus. Because it’s built on the same assembly line in Hamburg as other A320 series models, there are no extra costs involved in keeping the model on offer.

Airbus delivered the first A318 in July 2003, to Frontier Airlines. Air France (AF) was the largest operator, with 18. British Airways took two and outfitted them for business-class-only service to New York from London City airport, with one fuel stop in Ireland. Only 71 A318s are still in service, with the rest scrapped for parts.

The A318 measures 31.44 meters (103 feet) in length, compared with 33.84 meters for the A319 and 37.57 meters for the A320. The aircraft isn’t the first that has struggled in recent years as economics trump design. Airbus ended production of its four-engine A340 long-distance airliner in 2011, after rising fuel-prices made the model a tough sell with carriers.

A318 models initially were to take only Pratt & Whitney PW6000 engines, unlike their larger cousins in the A320 series, which took CFM International CFM56 engines or V2500 engines built by International Aero Engines. After Air France balked at the lack of choice, Airbus made the plane available with CFM56 engines, which then dominated the A318 orders.

To contact the reporters on this story: Andrea Rothman in Toulouse at aerothman@bloomberg.net; Robert Wall in London at rwall6@bloomberg.net

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

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