A330/340 vs. B777

Date:         27 Dec 96 04:41:05 
From:         Chuanga@cris.com (H Andrew Chuang)
Organization: Concentric Internet Services
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It's been a while since my last A330/340 vs. B777 "market analysis."
Because of my anti-subsidy stand and constant criticisms of the
A330/340 program, many think I'm an Airbus basher.  However, I really
don't think I am one.  I have not criticized too much about the
A300/310 and A319/320/321 programs.  Also, long long time ago, I have
criticized the B757 program for failing to achieve its original goal
of replacing the B727.  Till today, not many B727s have been replaced
by the B757.  Nevertheless, the B757 did pick up some steam in the
late 1980s.  And I believe it will be on track to be the fifth Boeing
jet airliner to achieve the 1,000 mark in a not-too-distant future.
(There are only two other jet airliner programs that have achived the
1,000 mark [in terms of orders], namely, the DC-9/MD-80/MD-90 and the
A319/320/321.)

Back to the A330/340 vs. B777 watch.  This is the first year since
the B777 launch that there are more A330/340 orders than B777 orders.
Thanks mostly to the newly-launched A330-200.  Last year, I predicted
the A330-200 would revitalize the A330 program.  Maybe I should go into
marketing. ;-)  In about a year, Airbus has received seven A330-200 orders
(some pending) from ILFC (13), Korean (2), Emirates (16), Asiana (10),
Swissair (4), Sabena (4), and Austrian (4) for a total of 53 units.
That's more than one fourth of the total A330 sales and more than one
third of the A330 backlog.  I think Boeing cannot afford not to launch
the B767-400ERX.  My guess is Boeing will launch the -400ERX early
next year with orders from Delta and at least one Asian airline.  (No,
Delta has not committed to the -400ERX, I'm just guessing.)  I'm a bit
surprised that the proposed -400ERX will still use the 62K engine that
powers the B767-300ER.  However, to get to the next thrust level
(65K-68K), it will mean Boeing will also need to redesign the engine
installation because the 65K-68K engine is larger than the 62K engine.
It seems the A330-200 may have a 500-nm advantage over the -400ERX.
I'm not sure if this will result in a handicap for the Boeing product or
not.

Nevertheless, I still think Airbus slapped on its own face by launching
the A330-200 (but I guess it's better to slap oneself than to give up
the market).  Airbus criticized the B777 for comprising the medium-range
and the long-range designs and emphasized how the A330 was optimized
for the medium-range missions and the A340 for the long-range missions.
The fact that most airlines like twins rather than four-engines planes
has forced Airbus to launch the long-range A330-200.  The A340-200 may
have a slightly longer range than the A330-200, but they basically
cater to the same market.  The A340-200 got less than 40 orders in
almost ten years while the A330-200 got more than 50 orders in one
year.  It's obvious what airlines want.

The B777 has a good year but not as spectacular as last year.  The
B777 re-orders from United and British Airways were probably smaller
than expected.  However, Boeing's planned B777 production rate of
seven per month seems to suggest that there are more orders coming.
(Boeing has about 250 B777s still on order.  Airbus has about 200
A330/340 on backlog, and they intend to increase their production
rate to 4.75 per month, IIRC.)

The B777-300 is expected to be in service with Cathay Pacific in 1998.
At this time, only Asian airlines have ordered this model.  I believe
Virgin is interested in the -300 but does not think the -300 has enough
range for Virgin's requirements (e.g., LHR-SFO).  If Airbus is to
launch the A340-600X, then Boeing will be pressured to increase the
-300 range, soon.  (Boeing does have a plan to increase the -300 range
to around 6,000 nm from the current offering of 4,600 nm.  Any further
increase will push the 777-300 into the 747-400 market, hence, the
A340-600X market.)  Right now, the A340-600X is looking more and more
like a B747-400.  Two years ago, Airbus was talking about 45K-lb-thrust
engines (such as the CFM-XX, PW2000, and RB.411).  Earlier this year,
when Airbus signed an exclusive study with GE, it was at 51K level.  Now,
they are talking about 55-60K.  (The B747-400 engines have 56-58K lb of
thrust.)  Air France will be the launch customer for the -600X if Airbus
does decide to build it (since Air France has already signed up for
five A340-600X as options).  Personally, I don't think Airbus should
stick with the A300/310/330/340 fuselage cross-section for the A340-600X
(or any long-range aircraft).  Do remember, the original A300 was a
short-haul aircraft!  Cabin comfort requirement for a short-haul flight
is quite different from a long-haul flight.

I'll update my A330/340 vs. B777 page when I come back next year.
Wish everyone a happy new year.