Tuesday, March 20, 2018

Airbus Is Said to Weigh A330Neo Cargo Model Targeting Amazon

(Bloomberg) -- Airbus SE is considering building a freighter version of its slow-selling A330neo wide-body, spurred by requests from potential customers Amazon.com Inc and United Parcel Service Inc., according to people familiar with the matter.

The interest from Amazon and UPS could rekindle a competition between Airbus and Boeing Co. as the global air-cargo market rebounds from a decade-long slump. Production of the popular Boeing 767 freighter has been restricted as the U.S. manufacturer focuses on a military tanker variant that is more than a year behind schedule, the people said.

If Airbus goes ahead, the cargo model could help lift sales of the A330neo, a re-engined version of the European planemaker’s smallest wide-body, which has struggled in the marketplace. The aircraft has garnered 214 orders and lost a sale this month after Hawaiian Airlines switched to Boeing’s 787 Dreamliner.

Toulouse, France-based Airbus declined to comment, as did Amazon. Atlanta-based UPS studies options for acquiring new and used aircraft as a matter of routine, spokesman Glenn Zaccara said in an email, adding: “Anything you may be hearing is speculation.’’

Airbus has already been exploring ways to lift sales of the A330neo, including a pitch to boost its maximum takeoff weight. Both Seattle-based Amazon and UPS are asking Airbus to consider stretching the A330-900 variant’s fuselage to carry more cargo while flying a shorter range, according to the people, who asked not to be named as the discussions are private.

Tilt Issue

A freight variant would be a natural advancement of an aircraft that uses the same fuselage as its predecessor, the A330ceo. There is already a cargo version of the earlier model, though it garnered just 42 orders over more than a decade, all but four of which have been delivered. One issue was that the A330 freighter’s front landing gear has to be extended to overcome a tilt forward on the passenger version that complicates cargo loading.

Boeing, by contrast, has logged 196 orders for its 767-300 freighter, almost five times more than the Airbus A330-200F, and has 61 undelivered planes.

A freighter version of the A330neo, offering reduced fuel burn from its upgraded engines, would at least provide Airbus with a product that could benefit once the 767 eventually retires.

Boeing isn’t currently planning an upgrade of the plane, which ceased production as a passenger model in 2014, and the replacement 787 doesn’t come in a cargo version, though Randy Tinseth, the U.S. company’s marketing chief, said Tuesday that a number of options are in the pipeline for boosting sales of the larger 777 freighter. Goods volumes are now coming back strongly after a slump dating to the 2007 financial crash, he said on a conference call.

Amazon Fleet

Amazon plans an initial fleet of 40 used 767 freighters for its Prime Air fleet, and has discussed ordering airplanes with Boeing in the past. The $1.5 billion air hub the company is plotting to build near Cincinnati suggests it will eventually have a far larger operation. 

Cargo carriers typically value cost and capacity over performance, said Richard Aboulafia, an aerospace consultant at Teal Group. 

While Boeing’s freighter, at a list price of $212.2 million, is cheaper, brand-new cargo planes from both companies also face competition from inexpensive conversions of used passenger models. A wave of retired 767s and A330s provide “a lot of feedstock,’’ Aboulafia said by telephone.

Airbus even has its own conversion program, holding a 30 percent stake in Dresden, Germany-based EFW. The venture shipped its first A330-P2F -- for “passenger to freighter” at the end of last year to launch customer DHL Express, a rival to UPS and Fedex that has eight of the planes on order and an option to take 10 more.

Original article ➤  https://www.bloombergquint.com

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