Biggest Airbus A350 Debut Signals Triumph of Two-Engine Jets

(Bloomberg) -- The biggest version of Airbus Group SE’s A350 wide-body jet made its first flight Thursday, swelling the twin-engine model’s capacity as the four-turbine Boeing Co. 747 and the European manufacturer’s own A380 superjumbo struggle to find buyers.

The A350-1000, which departed Airbus’s base in Toulouse, France, at 10:42 a.m. local time, seats 366 people in three classes. That’s just 44 fewer than the latest version of the 747, and with a vastly improved fuel burn thanks to the new aircraft’s two engines and composite construction.

So-called twinjet planes have become the mainstay of inter-continental travel, with the A350, the baseline version of which had its first commercial flight in 2015, following on from the slightly smaller Boeing 787. Both models have built on inroads made by the U.S. company’s 777, which began eating into markets previously restricted to four-jet models fully two decades ago and seats 364 people in three classes with No. 1 operator Emirates of Dubai.

Zafar Khan, an analyst at Societe Generale in London, said the price of crude oil would need to drop “much lower” than $50 a barrel for four-engine planes to have a chance of a renaissance.

“As long as fuel prices remain at elevated levels then two-engine jets will
clearly prevail,” he said.

Before the advent of the so-called “big twin” aircraft, older two-engine wide-bodies such as the 767 and A330 were limited to medium-haul markets such as the north Atlantic, partly because of practical limits on how far they could fly in the event of one turbine failing. The 777 cast off those shackles by winning certification for flights as far as three hours from the nearest airport.

The standard A350-900 has U.S. Federal Aviation Administration approval for up to five hours or 2,000 nautical miles of diversionary flying on a single engine, making possible trips from Southeast Asia and Australia to the U.S. In a denser configuration the new -1000 will be able to carry 440 people, less than 100 short of the A380’s standard 525-passenger payload, though the double-decker could accommodate as many as 800 seats in a single class.

The airline industry’s appetite for bigger twin-engine planes was revealed when Airbus scrapped a shrunken A350-800 variant, which was deemed too small at 280 seats, and opted instead to upgrade the A330 for shorter routes.

With the A350-1000 attracting fewer than 200 orders, versus about 600 for the baseline -900, airlines appear to be holding out for something still bigger, though Francois Caudron, Airbus’s senior vice president for marketing, said in Toulouse it’s not yet ready to commit to a double-stretch of the plane, dubbed the A350-2000. The -1000 already addresses a sweet-spot in the market and is 20 tons lighter and 25 percent more fuel efficient than Boeing’s 777-300ER, he said.

Bigger Boeings

Boeing, though, is adding more seats to its best-selling wide-body, with new slimline berths taking the total to 396 while still retaining three classes.

Twinjet capacity will increase still further from 2020, when the U.S. company introduces the 777X upgrade, the largest version of which will seat as many as 425 people in three classes. A bigger version is under consideration able to take upwards of 450 travelers, making it a true jumbo in its own right.

All told, the A350, 787 and 777 have unfilled orders totaling more than 1,950 planes, versus just 29 for the 747 and 121 for the A380. The four-engine Airbus A340, which emerged around the time of the 777, is already out of production.

The A350-1000’s debut flight means Airbus has met its goal of getting the model into the air before the end of 2016, with Qatar Airways Ltd. scheduled to be the first carrier to deploy the aircraft next year. The manufacturer is still racing to deliver the 50 A350-900s promised this year amid delays in the supply of interior fittings from suppliers including Paris-based Safran SA.

Sandy Morris, an analyst at a Jefferies International in London, said he’s not convinced the four-engine wide-body is on its way out just yet, and that while twinjets may prevail over the next decade, projected passenger growth after that could favor true behemoths such as the A380.

“The last thing you want to do is abandon that product and segment of market only to discover in a relatively short time frame that you need to come back into it,” he said. Airbus has said it will slow superjumbo output to one plane a month from 2018, eking out production and sustaining the program pending a hoped-for revival in demand.

To contact the reporters on this story: Andrea Rothman in Toulouse at aerothman@bloomberg.net, Christopher Jasper in London at cjasper@bloomberg.net. To contact the editors responsible for this story: Chris Reiter at creiter2@bloomberg.net, Benedikt Kammel, Christopher Jasper