Bloomberg News

Airbus in Supplier Talks Mulls Upgrades to A320neo Jet

June 05, 2014

Airbus Group NV (AIR) is moving to upgrade its A320neo jetliner even before the revamped narrow-body plane’s scheduled commercial debut in 2015.

In committing to the Neo in 2010, Airbus gambled by offering airlines a simple overhaul of the top-selling A320 that focused on fuel-saving new engines while Boeing Co. (BA:US) studied an extensive redesign of its 737.

Now, Airbus is preparing to introduce upgraded avionics and other systems that would bring its plane’s features closer to those offered in Boeing’s upgraded 737 Max, which is slated to begin commercial flights in 2017, said Richard Aboulafia, an aerospace analyst with Teal Group, a Fairfax, Virginia-based consultant.

“This is something they’ve always done,” Aboulafia said in a phone interview. “Boeing tends to launch all of its big changes in one block. Airbus has more of a rolling update approach.”

The redesign effort by Toulouse, France-based Airbus creates new opportunities for suppliers including Cedar Rapids, Iowa-based Rockwell Collins Inc. (COL:US), which is providing new cockpit displays to the Boeing 737 Max.

“Post Neo or Neo Plus, as some people are calling it,” Rockwell Collins Chief Executive Officer Kelly Ortberg said in an interview yesterday in Chicago, “they’re looking at technology insertion opportunities to continue to upgrade the airplane and provide cost reductions, if possible.”

Workhorse Supremacy

Ortberg’s account gave a glimpse of possible changes ahead on the A320neo as Airbus vies with Boeing for supremacy in single-aisle jets, the workhorses of the global airline fleet. By getting the A320neo to market ahead of the 737 Max, Airbus has won about 60 percent of the narrow-body orders.

“It does present opportunities for us,” that weren’t initially available with the neo, Ortberg said, since Airbus didn’t change the information systems that Rockwell Collins provides on the current A320.

Mary Anne Greczyn, an Airbus spokeswoman, declined to comment when asked about plans for a Neo Plus initiative.

Enhancements contemplated for the A320neo may serve as a template for extending the life of the A330 aircraft, should the planemaker decide to revamp the 20-year-old wide-body with more fuel-efficient engines, Ortberg said.

Aircraft Upgrades

Rockwell Collins watches for aircraft upgrades by Airbus and Chicago-based Boeing because they provide a chance to increase content and sales, said Ortberg, 54. The company is angling to wrest contracts from Honeywell International Inc. (HON:US) for cockpit displays and other equipment on Boeing’s new 777X after landing similar work on the 737 Max and 787 Dreamliner.

Boeing hasn’t indicated when it will announce critical suppliers for the 777X, which is slated to enter the market in 2020 and has garnered 300 orders and commitments since a November unveiling.

“We are in discussions with them on potential opportunities on the airplane,” Ortberg said. “I’m hopeful we’ll see by the end of our fiscal year (COL:US) some decisions being made as to who’s doing what.”

Airbus is nearing a decision on whether to invest about $1 billion on a refreshed A330. The makeover would provide an opening for Rockwell Collins, which isn’t a supplier on the current version.

“I think there would be some good opportunities for us,” Ortberg said, “but it’s still a little premature to know what that would be.”

Rockwell Collins provides aircraft communications, information management, landing and navigation systems and other equipment for Airbus’s wide-body A350, which is slated for its first delivery this year.

To contact the reporter on this story: Julie Johnsson in Chicago at jjohnsson@bloomberg.net

To contact the editors responsible for this story: Ed Dufner at edufner@bloomberg.net Molly Schuetz, Ben Livesey


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Companies Mentioned

  • BA
    (Boeing Co/The)
    • $128.58 USD
    • 0.82
    • 0.64%
  • COL
    (Rockwell Collins Inc)
    • $77.8 USD
    • 0.49
    • 0.63%
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