7E7 has the full attention of Airbus

  • By Bryan Corliss / Herald Columnist
  • Tuesday, August 31, 2004 9:00pm
  • Local News

Airbus is preparing a counterpunch to the Boeing Co.’s 7E7, a proposed new A350, The Times of London reported over the weekend.

It’s a no-brainer, said Richard Aboulafia, the typically insightful and always quotable analyst for The Teal Group in Virginia. “They wouldn’t be doing their job if they didn’t have a serious study of responses,” he said.

But leaking snippets of a story about an airplane you’re thinking about is a far cry from launching a new jet program.

According to reports this week in The Times (and just about every English-language newspaper in Europe), Airbus is hurrying to get the proposed A350 on the market before 2008, when Boeing’s 7E7 is set to enter service.

The plane would be based on Airbus’ 245-seat A330-200, but would have new wings and engines, The Times said.

Bloomberg News reported that Airbus would also replace the aluminum wing center section with composites. The whole thing would cost an estimated $2 billion to develop, according to the various reports.

Airbus officials aren’t commenting about the stories on the record, by the way.

From the start, Airbus has talked about simply hanging the new engines Boeing, Rolls-Royce and General Electric develop for the Dreamliner on its competing plane, the A330.

In that scenario, Boeing spends the development money but Airbus reaps the benefit.

To counter that, Boeing has made some changes in the design of the 7E7 systems to make it considerably different from other jets in the air. One of the big ones is that the Boeing plane will use power from electrical generators – not air bled off the engines – to run its systems. Given that, Airbus would have to redesign key components such as cabin air and de-icing systems.

Still, it’s doable, Aboulafia said. “That and composite insertions (replacing metal parts with lighter composites) will get you part of the way.” But he added, “Part of the way might not be good enough.”

An overhauled A330 might perform 95 percent as well as a 7E7, but it would still be an inferior airplane, and with airlines skating on razor-thin profit margins these days, that 5 percent difference would be huge, Aboulafia said.

If the Dreamliner lives up to Boeing’s claims, Airbus would be much better off starting with a clean sheet and designing an all-new plane to compete with it. The problem for Airbus is guessing how successful the 7E7 will be.

Quickly put out a substandard plane, and Boeing will clobber it with the 7E7.

But taking the time to do a better job with a new plane is risky, too.

Airbus could lose market share to Boeing if the Dreamliner reigns supreme in its category.

Airbus also would essentially be scrapping the A330, which is just 6 years old, and writing off the time and money it invested in that airliner.

It also would put Airbus in the position of having to go back to its governments for money to launch the new airplane – which lands it right in the middle of the current trans-Atlantic subsidy squabble.

So far, just having a proposal with a name attached to it is paying off for Airbus, Aboulafia said.

“They’re chipping away at the 7E7 business case,” he said.

Airbus has slowed some of the momentum Boeing seemed to have earlier this year, when airlines were following All Nippon’s initial order for 50 Dreamliners.

But for now, the A350 is just a paper airplane.

“They’ve been mooting their response, and this is no more definite than their previous plans,” Aboulafia said. “Right now, it’s just guerrilla marketing.”

Reporter Bryan Corliss: 425-339-3454 or corliss@heraldnet.com.

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