Airbus launches long-range A321 jet, close to 200 orders expected

FAN Editor
FILE PHOTO: The Airbus logo is pictured at Airbus headquarters in Blagnac near Toulouse
FILE PHOTO: The Airbus logo is pictured at Airbus headquarters in Blagnac near Toulouse, France, March 20, 2019. REUTERS/Regis Duvignau/File Photo

June 17, 2019

By Laurence Frost and Eric M. Johnson

LE BOURGET, France (Reuters) – Airbus launched a long-range version of its A321neo jet at the Paris Airshow on Monday, aiming to carve out new routes for airlines with smaller planes and steal a march on rival Boeing’s plans for a possible new mid-market jet.

The European planemaker will announce close to 200 orders for the new model – the A321XLR – over the week, sources familiar with the matter told Reuters.

“We can fly from north-eastern Asia into south Asia, from the Middle East to Bali or from Japan deep into Australia, and so on,” said Airbus chief salesman Christian Scherer.

“It is therefore the lowest-risk investment for airlines on these kinds of routes.”

Leasing company Air Lease Corp became the first customer of the new aircraft, taking 27 as part of a deal for 100 Airbus planes. Sources familiar with the matter said JetBlue Airways Corp would also buy some of the new jets.

The aerospace industry’s biggest annual event, which alternates with Britain’s Farnborough Airshow, is traditionally a slugging match between Airbus and Boeing sales teams in the $150 billion a year commercial aircraft market.

But analysts expect this year’s show to be relatively subdued, with slowing economies, trade tensions and geopolitical uncertainties unsettling airlines – highlighted by a profit warning from Germany’s Lufthansa late on Sunday.

Airbus and Boeing are also grappling with their own problems. The U.S. planemaker is striving to bring its top-selling 737 MAX jet back into service after its grounding following two fatal crashes. Airbus, meanwhile, is occupied with a long-running corruption scandal.

Boeing executives took turns to apologize for the loss of life in the crashes and pledged to apply the lessons learned to future planes following criticism of its response to the disasters in Indonesia and Ethiopia that killed 346 people.

“This is the most trying of times,” Boeing commercial airplanes boss Kevin McAllister told a press briefing.

“But without a doubt this is a pivotal moment for all of us. It’s a time to capture learnings. It’s a time to be introspective. And it’s a time for us to make sure accidents like this never happen again.”

Boeing Chairman and CEO Dennis Muilenburg on Sunday said he expected to announce orders for wide-body jets at the Paris show, but his main focus at the event was safety.

Analysts expect anything from 400 to 800 commercial aircraft orders and commitments at the gathering, compared with 959 at Farnborough last year, though it can be hard to identify truly new business against firmed-up commitments and switched models.

SIZE VS COMFORT

The Airbus A321XLR will be the longest-range narrow-body jetliner and arrives as airlines look to maximize the flexibility of more fuel-efficient, single-aisle aircraft.

Its range of up to 4,700 nautical miles – about 15% more than the previous A321LR – will leapfrog the out-of-production Boeing 757 and nudges it into the long-jump category occupied by more costly wide-body jets.

Airbus shares were up 0.9% at 123.50 euros in early trade

The A321XLR also eats into a range category targeted by a possible mid-market twin-aisle jet – the NMA – under review by Boeing.

“It does provide a very effective airplane for many of the same routes as the NMA, and it does so many years earlier,” Air Lease CEO John Plueger said of the new Airbus jet.

But there is a debate over whether passengers will enjoy flying longer distances in medium-haul planes and at what price.

In particular, the rise of the single-aisle, long-distance jet involves revisiting years of industry marketing about the benefit of roomier cabins to counter jet lag on long trips.

Airbus did not give a price for the A321XLR. The current A321neo has a list price of $129.5 million.

Boeing’s Muilenburg on Sunday said the A321XLR would only “scratch an edge” of the market segment targeted by the NMA.

Boeing is also battling to bring the world’s largest twin-engined jet – the 777X – into service, hampered by problems with General Electric’s new GE9X turbine engine.

GE Aviation on Monday said it had found unexpected wear in a part for the GE9X, forcing a delay of several months while it redesigns and tests the part.

Boeing commercial airplanes boss Kevin McAllister said he was “staying very close to the situation” and it was premature to make any predictions on delays for the program.

Boeing is targeting a 2020 entry into service, but Gulf airline Emirates has said it expects the first plane in June of that year.

(Additional reporting by Tim Hepher, Andrea Shala, Alistair Smout and Cyril Altmeyerhenzien; Editing by Mark Potter and David Goodman)

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