Business | Aviation
Boeing sees little sense in Airbus re-engine plan
Competition hots up in single-isle passenger jets market
- By Pilita Clark,Financial Times
- Published: 00:00 December 13, 2010
- Image Credit: Bloomberg
- The Boeing Business Jet. Boeing executives believe the Airbus plan to re-engine its A320 family of planes does not make sound financial sense
Washington Boeing cannot see any "compelling reason" to follow its European rival Airbus and offer a new engine upgrade for its best-selling single-aisle passenger jets, the US company has revealed.
A keenly anticipated €1 billion (Dh4.85 billion) plan Airbus announced last week to offer new engines on its A320 family of jets from 2016 would be costly and complex, said Jim Albaugh, head of Boeing's commercial aircraft division. It would only add "a few per cent" in financial benefits for airlines.
"We certainly can't see a compelling reason to do it," he said in an interview with Financial Times. He said he believed most airlines would prefer to wait a few more years for manufacturers to develop an all-new aircraft model that could offer up to 20 per cent better economic efficiencies.
"I think most of them will wait for a new aeroplane," he said. "It's not a simple proposition." Albaugh added he had told his engineers not to use the words "simple" and "re-engine" in the same phrase.
He also argued that on top of the higher price of the re-engined Airbus jets, which are expected to cost around $6 million (Dh22.06 million) more, airlines would face extra costs because they would have a new type of engine to maintain.
New phase
Albaugh's remarks ramp up pressure on Airbus as the world's two leading aircraft makers enter an important new phase of competition in the crucial market for their narrow-body cash cows. Airbus' A320 and Boeing's 737 family together make up 44 per cent of all commercial jets being flown.
The pair have dominated the market for decades, but their jets are older and have less fuel-efficient engines than new aircraft that rivals in Canada, China and elsewhere plan to start flying as early as 2012.
Both have spent months trying to decide whether to re-engine their jets or spend more time and money building an all-new aircraft. Albaugh said a final decision will be made some time next year, but his remarks seem to rule out any idea of Boeing putting new engines on its 737s, a more difficult task technically because of the aircraft's design.
They will be seized upon by Canada's Bombardier, the closest competitor to the big two, whose CSeries jet is due to have its maiden flight in 2012 and enter commercial service in 2013.
Airbus says its A320NEO, as it is calling its new re-engined aircraft, will make the CSeries business case "impossible". But Bombardier now has Boeing at its side, claiming that Airbus' engine plan does not make financial sense.
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