Issue 363: Fighter Fit

Where the C Series, sorry, A220 goes from here will provide a fascinating insight in the strength of the Airbus brand. Despite a protracted development, the Canadian-built jetliner offers promising payload-range performance, excellent operating economics and a fantastic passenger experience with its five-abreast economy class seating configuration.

And despite some initial cognitive dissonance, the A220 does look like an Airbus, a hint of Sharklet winglets here, a touch of A350 windscreen there. It wears the Airbus livery more comfortably than the McDonnell Douglas MD-95’s transformation into the Boeing 717.

If Airbus can make the A220 a sales winner where Bombardier could not with the C Series, it will validate yet again that success in business is much more than having a good product – which the C Series/ A220 clearly is – it is due to having effective marketing and sales teams, and strong after-sales support and back-up.

All those elements, and more, combine to make up brand equity. And it is really brand equity that Airbus brings to the C Series. On its own the C Series was a good aeroplane but something of an orphan. Airlines were used to dealing with Bombardier as a manufacturer of excellent regional turboprops and jets (Q400, CRJ etc), but mainline jets (can a 100-130 seater really be considered a ‘regional’ jet?) is a whole new territory.

In a conservative business, airlines, and more importantly the leasing and finance companies that finance their aircraft, are extremely cautious in taking on aeroplanes for which there is a perceived weak secondary market, and hence weak residual values (think A380). On the other hand, Airbus’s own A320 and Boeing’s 737 are proven, low-risk financial propositions. No airline CFO was ever fired for ordering a 737 or an A320.

Both the A320 and 737 are excellent aeroplanes, but they are also (relatively) easily trade-able commodities. A good second-hand 737 or A320 with plenty of economic life left in it won’t sit idle for long.

And that has been the chicken and egg challenge facing the aeroplane formerly known as the C Series – if few major airlines have ordered it, no matter its technical excellence, few others will, for fear of taking an orphan into the fleet.

But what Airbus, and the Airbus brand bring to the A220 is that assurance that the aircraft is no more an orphan. And what it also brings is the muscle and clout to drive a virtuous circle – the Airbus brand brings reassurance to airlines considering ordering the A220, and the more airlines and leasing companies that order it, the more Airbus can reduce the cost and price of the aircraft thanks to economies of scale, and thus the more attractive a proposition the aircraft becomes to more airlines and financiers.

It is exactly that virtuous circle that has driven the incredible success of the A320 and 737 series. It will be fascinating to see how much of that success can be brought to the new baby Airbus.