US Airways Indifferent to Airbus's A350 Dilemma

[Diamondbacks2004]

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Flight International 6 June 2006 by Mary Kirby

Airframer's Internal Debate Will Not Affect Fleet Replacement Plans, Says Carrier

In a memorandum to employees president and chief executive Doug Parker says US Airways management understands Airbus "is having internal debate as to whether or not they shouldn't start over on the A350." He adds: "If they come back with a new aircraft, great. If they don't and we don't have an order any more, that's fine. The merger's done and [Airbus has] been paid back, so everyone's happy."

...US Airways says it is not considering plans to replace the A330s and 767s with the Boeing 787 if the A350 deal is shelved.

"We have an order for the A350 and that's where our head is at this time. We aren't going to speculate beyond what might happen with the A350 because it's simply still in progress," the airline says. "Airbus is a terrific partner and they are taking the necessary time to consider their options. We'll wait to hear from them."

Is this the first time since Mr. Udvar-Hazy "dropped the dime" on the A350 program at ISTAT in late March that an actual or potential customer has intimated that the design may be fine just the way it is?

I think if US Airways may follow if other carrier Qatar Airways dropped A350 ordered in switching to B787 or else. Because Qatar CEO are not happy with Airbus A350 has same design as A330. Probably Airbus may kill A350 programs in poor sales performance and lowest number of customer of major airlines. I believe B787 beat A350 competition.

So what's next and what happened to US Airways for the future of new aircraft?

 

[PropPiedmont]

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I think if US Airways may follow if other carrier Qatar Airways dropped A350 ordered in switching to B787 or else. Because Qatar CEO are not happy with Airbus A350 has same design as A330. Probably Airbus may kill A350 programs in poor sales performance and lowest number of customer of major airlines. I believe B787 beat A350 competition.

So what's next and what happened to US Airways for the future of new aircraft?

I'm having trouble comprehending what you are trying to say.

 

[Heinrich]

What does "Airbus has been paid" mean? I thought Airbus loaned US 90 million

 

[hp_fa]

What does "Airbus has been paid" mean? I thought Airbus loaned US 90 million

My guess is that they were paid back a few months ago when some of the finances were reorganized (not BK reorganized) by the company. However, I don't know what provisions remain that might compel the company to use Airbus aircraft as a preferred vendor. Those provisions, if they exist, may well be out of the public domain as competitive information.

 

[BoeingBoy]

My guess is that they were paid back a few months ago when some of the finances were reorganized (not BK reorganized) by the company.

Your guess is entirely correct. Airbus originally loaned $250 million, of which $90 million was not required to be repaid if we ordered the A350. All but the $90 million was repaid in the 1st quarter in conjunction with the $1+ billion refinancing arrangement with GE. That 'forgiven' $90 million was one of the special items in the 1st quarter report.

While I have no idea what Airbus will do with the A350, I strongly suspect they won't just scrap it and turn that market over to Boeing. The A330 will need replacing in time anyway and the A340 hasn't exactly been a runaway success vs the B777.

So they'll either redesign it (most likely IMHO) or build it as specified with some minor tweaks (less likely IMHO). Assuming one of these, I suppose we're on the hook for whatever the A350 ends up being since we accepted the 'free' $90 million.

Jim

 

[700UW]

The 797 supersonic was scrapped a few years ago.

 

[BoeingBoy]

Here's a blurb from an Aviation Week article about freighter conversions:

In the second half of 2005, Boeing recorded orders for factory-built 767-300ERFs from All Nippon Airways, LAN Airlines and Japan Airlines; meanwhile, IAI has delivered more than a dozen converted 767-200Fs to Tampa Cargo, ABX Air and Star Air. Boeing, teamed with Aeronavali, is moving ahead with a conversion program for the 767-200. First delivery of a Boeing/Aeronavali 767-200 Special Freighter conversion to launch customer Cargo Aircraft Management is scheduled for the third quarter of 2006. Boeing also decided late in 2005 to proceed with development of a 767-300 freighter conversion program based on a launch order from All Nippon Airways.

The 757-200 conversion market also is expected to grow. The 15-pallet Precision Conversions program was certified in June 2005, and the competing Alcoa-SIE 14+ pallet 757 conversion is in the final stages of certification. More competition for 757-200 conversions will come from IAI and ST Aero (Singapore), which have a licensing agreement to use Boeing-supplied data to update an earlier 757-200 Special Freighter program developed by Boeing for DHL. The IAI/ST Aero programs will be more cost competitive than the prior Boeing operation, and are aiming for full 15-pallet capability.

Orders and deliveries of converted 737-300s and 757-200s haven't developed as fast as some anticipated, due partly to a lack of growth in the U.S. domestic express market. Companies have delayed decisions regarding upgrades or replacements of their 727 and DC-9 freighters. On a more positive note, there's a growing market for regional freighters in China, providing a large potential outlet for 737-300s/-400s and 757-200s and converted A320s expected to see considerable long-term use.

Jim

 

[lpbrian]

The 797 supersonic was scrapped a few years ago.

Actually, the 797 is the Boeing internal designation for a 737 sucessor

 

[700UW]

Originally it was a supersonic and Boeing is using 737RS or RG also.

 

[delldude]

The 797 supersonic was scrapped a few years ago.

uh oh.....

 

[john john]

While I have no idea what Airbus will do with the A350, I strongly suspect they won't just scrap it and turn that market over to Boeing. The A330 will need replacing in time anyway and the A340 hasn't exactly been a runaway success vs the B777.

So they'll either redesign it (most likely IMHO) or build it as specified with some minor tweaks (less likely IMHO). Assuming one of these, I suppose we're on the hook for whatever the A350 ends up being since we accepted the 'free' $90 million.

Jim

My guess is jerry and the gang new the A350 had problems they just wanted to play ALPA a little more kind of like the largest Airbus order in history. These guys are cold and calculating and very smart they get the big bucks. . You better believe Airbus and upper management stay in touch

 

[FM2436]

While I have no idea what Airbus will do with the A350, I strongly suspect they won't just scrap it and turn that market over to Boeing. The A330 will need replacing in time anyway and the A340 hasn't exactly been a runaway success vs the B777.

So they'll either redesign it (most likely IMHO) or build it as specified with some minor tweaks (less likely IMHO). Assuming one of these, I suppose we're on the hook for whatever the A350 ends up being since we accepted the 'free' $90 million.

Jim

I just read in the June 2006 issue of Air Transport World (page 9) the following:

Airbus Eyes Wider Fuselage for A350

Airbus is close to announcing a radical revamp of the A350, according to insiders in Toulouse. CEO Gustav Humbert told reports in late April that the company would make some sort of decision by summer.

Key to the new variant sources report, is a wider Al-Li fuselage, up to 14-inches wider than the current A350, to accommodate a true nine-abreast configuration. This would be a first for Airbus, all of whose current widebobies share a common-width fuselage barrel dating back to the original A300. Reportly, the revise A350 also will feature a larger, new composite wing. The changes, if implemented, would push back delivery to at least 2012, say insiders.

 

[BoeingBoy]

Meanwhile.....

Article - CO orders more 787's

Jim

 

[TheWatcher]

Maybe US can switch to an all Boeing widebody fleet while keeping and growing an Airbus narrow body fleet.

 

[Travelpro72]

Why does US have this wait and see approach to the A350 situation? If Airbus decides to scrap the current design and develope a new one it will leav US without a new int'l a/c for another two years or more. With the a/c we have to use on int'l very few, management sure has a cavalier attitude about it. With there not being many widebodies out there now I bet we see more 757's as US's answer to int'l expansion. We really do need some more a/c before we are left in the dust on int'l flying.