Bloomberg News

Airbus May Build Souped-Up A350 as Boeing Reviews Rival 777

June 07, 2011

(Updates with comment from analyst starting in 10th paragraph, EADS share price in last.)

June 7 (Bloomberg) -- Airbus SAS may boost the performance of its planned A350 jet with enhancements including more thrust, seeking to outflank any revamped version of the Boeing Co. 777.

Upgrading the A350-1000, as the largest version of Airbus’s new twin-engined widebody jetliner is known, could require upgrades to the model’s Rolls-Royce Holdings Plc turbines, Emirates President Tim Clark said in an interview in Singapore.

“They’ve said that changes are on the way and hinted at increased thrust,” Clark said. “The idea is to get increased takeoff weight, but they haven’t given me details yet.”

Customers have been urging Airbus to increase the A350’s range and capacity after it developed the model in response to Boeing’s smaller 787. Qatar Airways Ltd., the A350’s No. 1 customer, and International Lease Finance Corp., the biggest aircraft lessor, both said today they favor a performance boost.

Boeing is meanwhile studying modifications to defend the 16-year-old 777 against the new Airbus, which is slated to enter service in the next two years. The U.S. company will watch Airbus’s production schedule and the A350’s ramp-up before deciding whether to improve the 777 or offer an all-new variant, Jim Albaugh, its commercial airplanes chief, said today.

“We’ll respond in kind,” Albaugh said at a briefing in Singapore, where airlines are gathered for the annual meeting of the International Air Transport Association. “We’re spending a lot of time looking at the 777 and what upgrades we could do to an existing plane, and what derivatives we could do.”

Longer Routes

Rolls-Royce’s Trent XWB is the only engine on offer for the A350 series. Josh Rosenstock, a spokesman for the London-based company, declined to comment on its plans for the model today.

Sean Lee, a spokesman for Toulouse, France-based Airbus in Singapore, declined to comment, saying the planemaker will brief the press on the A350 at the Paris Air Show later this month.

Increasing the takeoff weight of the A350-1000 would allow the plane to carry more fuel, which could then be used to fly longer routes or carry more passengers in competition with Boeing’s long-haul 777-300ER.

Change of Plan

“It would be a change of strategy with Rolls-Royce and Airbus having said that the XWB engine would be sufficient,” Matthew Hickman, an analyst at MF Global UK Ltd. in London, said today in a note to investors. “This is positive for both because the engine is now better focused on the end markets.”

Hickman, who rates Rolls-Royce “buy,” said the indicated cost of a new engine for the A350 is “close to $2 billion” and could create a delay from 2014 to 2016, though with the -800 and -900 versions of the plane on schedule a redesign could have “less of an effect in the long run than might first be thought.”

Clark said that Emirates, the world’s biggest airline by international traffic, hasn’t been pressing for changes, though it’s the biggest joint customer for the competing models. The Dubai-based carrier is the No. 2 client for the A350, with 70 on order, including 20 -1000s, and has outstanding commitments for the 777 that will make it the Boeing plane’s biggest user.

Qatar Airways, the No. 1 customer for the A350, with 80 on order, said today that the -1000 will require a larger wing, as well as a bigger engine with more thrust.

“We’d like increased weight, we’d like increased range,” CEO Akbar al Baker said in an interview at the Singapore event. “Airbus says the plane will compete with the 777-300ER, so let us see.”

ILFC Keen

International Lease Finance Corp., the world’s biggest plane lessor by fleet value, has 20 A350s on order and also said it favors a more powerful variant.

“We’d welcome more performance for the A350-1000,” CEO Henri Courpron said today on the fringes of the IATA meeting.

The A350-1000 is designed to carry 350 people in a three- class formation as far as 8,000 nautical miles, according to Airbus’s website. The first delivery is scheduled for 2015. The A350-900, which is due to begin operations two years earlier, will be able to fly 100 miles further carrying 314 people. The planemaker is also developing a smaller -800 variant.

Rolls-Royce is unlikely to completely change the engine on the A350-1000 for a different model as that would likely force alterations to the plane’s design, Clark said. Instead, it will probably need to alter the core of the Trent powerplants so that they extract more thrust from the same size fan, he said.

Airbus had 574 orders for the A350, across the three different versions, as of the end of April.

The planemaker’s parent, European Aeronautic, Defence & Space Co., was trading 0.3 percent higher at 21.53 euros as of 2:58 p.m. in Paris.

--Editors: Chris Jasper, Benedikt Kammel.

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

To contact the editors responsible for this story: Benedikt Kammel at bkammel@bloomberg.net; Neil Denslow at ndenslow@bloomberg.net


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