fleet decisions

Oct 11, 2017

Airbus comes under criminal probe and A330 NEO order pressures

Airbus warns its people of impending fallout over corruption claims and launch customer for A330NEO says it might take A350s instead

Ben Sandilands — Editor of Plane Talking

Ben Sandilands

Editor of Plane Talking

Awaiting its new generation Rolls-Royce engines, the first A330-900

The curse of ‘interesting times’ is visiting Airbus over bribery and corruption claims and separately, buyer indecision which might benefit its A350 program but at some cost to the A330 NEO line.

German public prosecutors are reported as saying charges will be pressed specifically in relation to alleged breaches of the law in the sale of Eurofighter jets to Austria.

The CEO of Airbus, Tom Enders, has written to all employees about the potentially serious outcomes of this and other legal matters and urged them to be on guard against false information.

In a totally unrelated matter, which may have net benefits for Airbus, the chief executive of the Air Asia Group, Tony Fernandes, says its long haul franchise, AirAsiaX, is considering replacing its entire  type launch order for 66 of the A330-900 NEO version of the wide-body twin engined jet with A350s instead.

AirAsiaX already has an order for 10 A350-900s. Mr Fernandes campaigned vigorously over several years to persuade Airbus to overcome its initial reluctance to build a new engine option, higher technology version of the A330-300s that support its higher capacity network in place of the A350, which at the time was considered by Air Asia to be too large for its needs.

Times, and growth, have overtaken that assessment. Mr Fernandes has also referred to possibly choosing Boeing 787s, in a move some observers see as designed to assist Airbus to see the merit of returning to the original Airbus position (which he had opposed in 2013) of taking all A350s in the first place.

In short, it seems the customer is always right, and while such a change will remove sales from the A330 NEO line up, A350 sales are more valuable to Airbus.

The A330-900 is a more fuel efficient and longer flying alternative to the A330-300, which is the leading medium capacity wide-body flown by Asia-Pacific carriers. It is being readied for its first flight, while a slower selling A330-800 model is also under final assembly and being offered as a new technology version of the A330-200.

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5 thoughts on “Airbus comes under criminal probe and A330 NEO order pressures

  1. Tango

    Standard Air Asia MO, kicking the plane orders down the runway. So the A330NEO wonder, one of the two big order pushers (Delta the other one) on the way out.

    I have predicted this for some time. It has to do with Ego, not running a real airline.

    It has nothing to do with size, he doesn’t take the sizes he has.

    1. Dan Dair

      I can easily see why anyone would want to replace their A330’s with better, more efficient ones, if they’re already happy with the product.
      I wonder though, whether it’s in Airbus’s interest to let one of their major orders (& of course, launch customer) pull out of the deal.??? Even if they’re supposedly buying an alternate Airbus product.?

  2. Tango


    You miss the point on upgrade. Tony has been one of the key drivers for this aircraft (A330-NEO). He badged Airbus over it. He made offers of deals that he sort of did.

    Now he changes his mind.

    But if you follow how he operates, he first had a lot of A330-CEO, he dropped those when the NEO came to fruition. The NEO was down the line a ways but he dropped the whole order.

    Then he converted to the NEO of course. As the NEO and the A350 are quite different, what we are talking about is different market when he has not developed the market he said he had.

    That in turn puts the required (A350) even further down the road as he is last in line for those but first in line for the A330 NEO.

    Much like Trump, loud mouth, flim flam man.

    Keep in mind the timing is that he would have to make substantial payments for the A330NEO not just the deposits.

    So like Trump he is keeping one step ahead of the law as it were.

    If Airbus is smart they will take his deposits and then charge him a new set for A350. When he decides he wants A380s they can do the same thing.

    Just don’t count on him taking them!

    1. Dan Dair

      Maybe Airbus are every bit as wise to Tony Fernandes as you are,
      but maybe they’re just happy to keep the ‘volume’ on their books,
      whilst perhaps not actually allocating any real production slots to these ‘orders’.

  3. Tango

    Dan: I don’ think you understand the system.

    Parts have to be made well in advance of actually assembly, they have to be ready when assembly begins. 787 is a poster child of how awful that can be and affect it has on a program.

    Air Asia had (who knows now) orders for 66 A330NEO. That’s 31% of the orders.

    Airbus needs to sell probably 300 to justify the program, that’s not ROI, that’s just break even (my estimate)

    Loosing 31% or the orders has major downstream consequences.

    The A330-NOE 800 is already a lost leader (Hawaiian the only buyer)

    Airbus now has to juggle the order books, determine if others want to move up, and if not, then cut back the production. Delta might, but the orders are fairly normal (25) and then its how much more of a break Airbus would give them (more money out). Sometime moving up is good, sometimes it disrupts things.

    The wide body orders are iffy right now in all categories other than the 787 which is still selling ok, not huge but selling.

    Orders on the books don’t pay the rent. So it also depends on where Air Asia was in line.

    Big money is involved, the first payments are not huge, the current due ones are.

    Air Asia is on the Leeham watch list for shaky customer. I had made that same conclusion separately. they have far better data than I do.

    RR take a hit on this as well as the engines for it are specifically built for it.

    GE declined to participate and that is looking to be a very wise move.

    Again nothing good in this for Airbus.

    My original forecast was for 250 of this and that does not justify the program.

    On paper it actually looks like a pretty good deal.

    But in reality if you have a shaky customer, you should not base a program on that. In the end it could cost Airbus a lot of money and hurt things overall.

    And if you can’t count on them for the A350 orders then that’s another hit down the road.

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