Airbus lndustrie Plans For Strong Future

Airbus lndustrie is at present still recovering from the BAe strike, which held up wing production and inevitably put back the overall Al production program by 32 new aircraft. However, after introducing a well-orchestrated recovery program, production is now described as “nearly” back to normal. Prior to the strike, Al were producing seven A320s per month, and this figure was reached again just two months after the strike ended, and indeed has since increased to 11. 5 aircraft per month to cope with the large A320 order backlog; it was originally planned (even prior to the BAe strike) to go to 12 aircraft per month, but the problems currently being experienced by airline customers meant that this figure became impracticable.

A300/310 production is also just about back on schedule, while the A330/340 program has been set back just a few months, with type certification of the ultra long range four engined A340 pushed back from October to December 1992 with an entry to commercial service now being planned for January 1993. T hus at this moment in time the effects of the BAestrike, which severely affected production at the time, are negligeable and Al are more or less able to proceed with production as was originally planned.

Commercial outlook

The Gulf War and worldwide recession have hit Al customers, and indeed most airlines, hard. Several airlines have collapsed under the strain of their financial woes, whilst others are struggling to survive in the current operating climate. Passenger numbers are down, operating costs are up, and in most cases profit is merely a dream scenario. Yet despite this, Al, like Boeing, remains confident of the future, though naturally in the short term some order cancellations and/or special customer arrangements are to be expected.

Stuart Lddles, Al Senior Vice President Commercial, describes 1989 as “the easiest year ever to finance aeroplanes”. Hence the record orders of 1990, achieved through the generosity of banks which were more than willing to finance (even to the tune of 100%) the acquisition of new airliners by the world’s airlines. Both Airbus lndustrie and Boeing achieved record sales as airlines and leasing companies worldwide rushed to update fleets for the mid to latter half of this decade. Both manufacturers’ backlogs lengthened to somewhat alarming levels, the result being that no delivery slots were available for several years, in some cases as far down the track as 1997. Consequently, production rates for most large jetliners have had to be increased over the coming years to cope with demand. However, following directly on from the record orders of late 1989 and early 1990 was the beginning of what most industry analysts recognise as a cyclical downturn. By the third quarter of last year, the effects of this downturn were beginning to show, and it was only to be exacerbated by the Gulf War and the resulting hike in fuel and operating costs and the significant drop in passenger numbers, both the result of the terrorist threat and growing worldwide recession. Ironically, once hostilities actually commenced on 16 January the cost of fuel began to collapse as the international finance community at last saw an eventual end to the Kuwaiti stalemate.

Whilst some airlines have collapsed (Eastern, Air Europe, etc) or are flying only by the grace of US Chapter 11 provisions (Continental, Midway & PanAm) and others are facing severe financial difficulties, Airbus are apparently riding the crisis quite well. To date Al have recorded just 17 order cancellations, 14 of which were due to “suspension of operations”, whilst several airlines have requested either delayed deliveries or extensions of option conversion deadlines. Whilst nothing can be done about the majority of order cancellations, Al have been able to facilitate the requests of most other customers in difficulty, especially in regards to delayed deliveries.

Several customers have requested that deliveries be delayed if possible, and Al have worked hard to facilitate these requests. In most cases, the delays requested are short-term and several are not actually related to the industry downturn. EgyptAir, for instance, was able to arrange for seven aircraft deliveries to be delayed, the request being the result of financing difficulties which came about as a result of red tape from the 16 bank financing consortium; financing negotiations are expected to be finalised within weeks.

Another airline facing short-term difficulties was able to arrange a swap of delivery slots, whilst two other A320 customers, Cyprus and Ansett, have arranged for one each of their completed aircraft to be stored at Airbus’s Toulouse base on a short-term basis, the aircraft not at this time being required for operations.

On the question of option conversion dates, Airbus have had to take a tough stand because of the strict production schedule which must be adhered to. Thus, though several customers have requested that they be able to postpone option conversions, Al have not been able to allow this to be done and options have in several cases had be abandoned. One such instance was that of Air Canada, which was forced for political reasons to not convert five A320 options to firm orders because the option decision date coincided with sensitive employee layoffs.

And so Al’s Commercial Division is at present dealing mainly with airline delivery needs and requests. But these are seen only as short-term requirements, which will with time right themselves. Such has been Al’s success to date, that at present just one “distressed delivery” is on the consortium’s books, an A320 originally ordered by Royal Jordanian for delivery last November, but now in need of purchase by a new customer. Thus, of the 17 cancelled aircraft orders, this is the only one for which a new buyer has not yet been found. Interestingly, the five A310-300s ordered by Iraqi Airways are not listed as cancelled orders, but rather suspended orders; the aircraft were never cancelled by the Iraqis, however delivery cannot take place because of the United Nations trade embargo, which remains in force.

Airbus lndustrie is therefore coping quite well with the current airline industry crisis, with most customers being determined to retain their orders with the knowledge that they must plan for the future. But not only does Al expect to cope, the consortium predicts that it will reap the benefits of an industry expected to rebound from the current cyclical downturn.

Like its chief competitor Boeing, Airbus recognises the need for airlines to replace older generation aircraft over the coming decade, providing constant orders for the aerospace industry. As a result, it expects its current product range to perform as such over the next 15 years: A300/310 – about 43 aircraft produced in 1992 and 1993, before dropping to about 40 per year in the near future and then dropping marginally; A320/321 – constant production rate of 110 aircraft per year to about 1998, and possibly beyond; A330/340 – 49 in 1993, 74 in 1994, 81 in 1995, then levelling off at 77 per year from 1996, maintaining that rate for at least a decade.

Product line update

Airbus currently has three aircraft on the production lines and is offering to customers another three which have not yet flown. With these aircraft – the A300-600, A310 and A320 (current production range) and the A321, A330 and A340 (under development) – Al will enter the next century with a solid sales base, though by the year 2000 at least two new aircraft programs are expected to have been announced, each necessary to fill a gap at the two extremes of the Airbus range, the high density 500- 600 pax airliner and the smaller 110-130 seat regional jetliner market.

Perhaps the aircraft which is attracting the most interest at present is the prospective 7 4 7 competitor, or even successor. Advanced design studies are underway on the proposed new widebody, already dubbed the A350, however it is still early days with the aircraft not expected to fly until at least 2002. The new widebody will in fact be significantly bigger than the current Boeing 747, with seating for at least 600 passengers, and is aimed primarily at the growing intra-Asian travel market. Airbus designers are currently trying to determine the most feasible way of configuring a 600 seat airliner for the commercial market. Given that the length of the airframe will inevitably be limited, designers are currently looking at either joining two fuselages horizontally to produce, for instance, a 15 abreast airliner, or vertically to have two seating levels.

Both configurations have advantages and disadvantages. The 15 abreast seating configuration could logically present some problems with emergency evacuation of the aircraft, and one would certainly not wish to be the passenger in the very centre row! But, as said, design studies into this high density airliner are still only in the very early stages. For the aircraft to fly in 2002, the latest possible official project launch time is 1997.

An aircraft project which will probably be launched much earlier is the shorter fuselage A320 variant. Though initially termed the A319, Al now officially call the project the A320-M7 (M7 meaning Minus Seven Frames). The aircraft is perceived as a threat to the proposed Fokker 130 (a stretched Fokker 100) and similar projects, and its design has in fact been requested by several A320 customers, principally Swissair. It could typically carry 110 passengers in a three class configuration or 125-130 in a maximum density, all economy arrangement. With strong interest in the project already gauged, this new A320 variant could prove a real winner.

However, Al finds itself in the “unfortunate situation” of being in conflict with consortium partners who have their own, similar projects at hand. One such partner is British Aerospace, who have already launched their 146-NRA project (refer BAe feature elsewhere this issue). However, BAe, which will benefit either way because it undertakes wing production for all Al aircraft, has already signalled that it will abandon the NRA if the A320-M7 goes ahead.

The real threat would appear to come from the German partners, who already are planning a German/Italian jetliner in the same class. Negotiations are underway “at the highest levels” to come to a project agreement, the Germans apparently being insistent on getting more from the project than they presently are. Negotiations are expected to be concluded this year, though it is not certain when (or if) an official project launch will be announced.

Besides these two very much paper planes, Al continues to work on plans for modifications to its existing range of aircraft. Some are listed merely as paper planes for consideration, for example the suggestion of an A310 with A300-600 wing and engines for a substantial increase in payload/range, or even an A300 with A330 wing to satisfy the same requirement. Other potential projects have been abandoned before receiving the official go-ahead, for instancethe A320 “super stretch” (ie A322) which was in effect a stretched A321, but for which technical problems and airframe changes precluded further development.

The original stretched A320 variant, the A321, is currently undergoing wind tunnel testing using a one-eleventh scale model to validate design changes made to the aircraft. The standard A320 fuselage has been stretched to accommodate 186 passengers in a typical two class configuration, with one fuselage plug added forward of the wing and one aft. Wing design changes made to the A321 include an extended trailing edge with Fowler flaps and tab, and also a redesigned flap track and tab fairings. The A321, which will be constructed in Germany, is scheduled to enter airline service in 1994.

At this stage the aircraft due to be most updated with new models being introduced towards the end of the century is the A330/340 family. These new models will entail the introduction of new engines to provide additional range and power, fuselage stretches to provide higher capacity, and in the case of the A340 the introduction of a Combi version, Airbus’s first Combi airliner. The performance parameters of this exciting new Airbus family are planned to be pushed to the limit, to produce a highly successful and competitive aircraft for the airline industry of the early 21st Century. Rather than simply glossing over this important new airliner family, however, a full in-depth Update will appear in the July edition of Australian Aviation.

As Airbus lndustrie enters its third decade of operation it certainly appears to be facing a prosperous future. Despite the airline industry in the short-term facing somewhat extreme financial and operating difficulties, the consortium remains confident at this stage that recovery will be strong and the aerospace industry will be carried into the 21st Century on a high note. With its current range of airliners Al can compete on a strong footing with rival manufacturers; with planning for new aircraft and new variants it will offer a full range from 11O seat to 600+ seat jetliners for all market needs. A far cry from the situation of just one decade ago.