CIT Executive Insights with Steve Mason
The Small Twin-Aisle Market: What’s Next?
The A330 Bridge
Closing this gap with Boeing may well fall to the A330, where Airbus has several options for
extending the life of the aircraft:
Do nothing. This would result in reduced sales for the A330 and put Airbus significantly behind
Boeing in twin-aisle market and production share. At industry average stage lengths for this size
category aircraft, the lower capital cost of the A330 makes for a very competitive aircraft, however,
the A350 and the 787 have accounted for almost 80% of twin-aisle sales since the beginning of 2012.
While the A330 in its current form will continue to enjoy some additional sales, it won’t be enough
to justify continuing the current production rate of 10 a month for long. The regional version of the
aircraft announced by Airbus in 2013 to boost sales has not yet been the stimulus Airbus seeks;
however, we do expect certain Asian carriers to purchase the aircraft in not insignificant quantities.
Small changes. Airbus could continue to wring additional market value from the A330 by improving
aerodynamics or introducing engine efficiencies or other design tweaks that would adapt the
aircraft to additional markets and reduce its operating cost. Rolls-Royce and General Electric will
be introducing modifications to their engines to reduce fuel burn by up to 1% in
2015 to coincide with the entry into service of the 242T A330. Airbus has been
successful in offering incremental improvements to the A330 since its inception,
and this tactic could give the company some breathing room in the market through
2017. While even minor changes in aircraft design can improve efficiency, they have
their limitations. Airbus seems to have picked the low hanging fruit, and from now
on every additional improvement will tend to be more technically challenging and
expensive than the last.
Significant changes. Rather than tweaking the design, Airbus could invest in a
more significant overhaul which could include new engines, new wings, a refreshed
cockpit, landing gear changes or new fuselage material. These could add to the
A330’s market appeal, but timing is crucial for any significant A330 modifications.
Airbus needs to bring the new version to market quickly to capitalize on the limited
availability of the A350 and 787, and such major modifications can be costly and
“Airbus could continue
to wring additional
market value from the
A330 by improving
efficiencies or other
design tweaks that
would adapt the
aircraft to additional
markets and reduce its