Airbus Looks at New A330 Engines to Boost Wide-Body Sales
Airbus Group NV (AIR) is exploring the option of new engines on its A330 wide-body aircraft to help rekindle the 20-year-old model’s sales, which have trailed off as production of Boeing Co.’s 787 Dreamliner picks up momentum.
Airbus has open production slots for the twin-engine model in 2016, Chief Financial Officer Harald Wilhelm said today, as he presented earnings that beat analyst estimates. Airbus is getting more requests from existing customers to re-engine, and will decide this year, he said.
The A330 had enjoyed a second wind in recent years while Boeing struggled with years of delays on its competing Dreamliner. Upgrading the A330’s engines would make it more fuel-efficient, while undercutting the Dreamliner’s price because the Airbus model’s development costs have been absorbed.
“It’s not a secret that we see more and more statements from good A330 customers coming out” about a potential re-engining, Wilhelm told analysts today. “This is encouraging, but we need to do our own work.”
When Airbus began offering new engines on its single-aisle model, the A320neo became the fastest-selling airliner in commercial history, underscoring customers’ need to cut fuel bills that can comprise 40 percent of operating costs.
Airbus hasn’t said whether it would offer one engine choice or two on the A330. Both Rolls-Royce Holdings Plc (RR/) and General Electric Co. supply the 787, and the powerplants could be tweaked to power the Airbus model.
Rejuvenating the A330 may make the aircraft a viable alternative to Airbus’s planned A350-800, which has been selling poorly and losing orders to the larger A350-900. Airbus has encouraged customers to select bigger, more expensive models of its new A350 wide-body, which is set to enter commercial service for the first time this year.
“I think Airbus is looking at that very carefully as a possible alternative to the A350-800,” Steven Udvar-Hazy, the chief executive officer of Air Lease (AL) Corp. said of a possible re-engined A330 last week.
Airbus today reported earnings before interest, tax and items of 700 million euros ($963 million) for the first quarter, better than the estimate of 658.7 million euros from analysts surveyed by Bloomberg though below a restated 734 million euros for 2013.
The company kept its target for break-even on the A380 in 2015, helping drive the biggest stock gain in more than five months Airbus rose as much as 2.91 euros, or 5.9 percent, to 52.40 euros in Paris, the most since Dec. 11. The gain clipped this year’s decline to 7.7 percent, compared with a surge of 89 percent in 2013, the best annual return in a decade.
Group sales at Airbus gained 5 percent to 12.6 billion euros, with all three divisions -- Airbus the planemaker, Airbus Helicopters, and Airbus Defence and Space -- contributing.
Order intake fell to 21.1 billion euros from 49.5 billion a year earlier as contracts for new plane models at both Airbus and Boeing eased following several years of booming demand. The backlog stood at 683.2 billion euros at quarter end compared with 680.6 billion euros.
Wilhelm said he’s not concerned about a drop in orders and reiterated a goal for a book-to-bill ratio of one this year, translating into orders in excess of 600 planes.
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