On the crisis at Airbus: "Airbus has a depth of experience and talent. We are producing more than one airplane a day in the single-aisle and..."
On the crisis at Airbus:
“Airbus has a depth of experience and talent. We are producing more than one airplane a day in the single-aisle and up to seven a month in wide-bodies. We’re finally getting our act together on the A380. We’re about to have an industrial launch, I trust, on the A350-XWB, which required a quick redesign.
“The survivability of Airbus is not in doubt. It’s generating billions of dollars in cash and revenue and profits…. It’s not as bad as it looks.”
On the A380 production delays:
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“We have a way forward. … We leave a lot of these customers speechless when we try to explain what happened and why it happened. But after all the yelling and screaming, people say, it looks like you’ve finally got it under control.
“With the exception of Fred Smith [chief executive of FedEx], most are staying with the program. … I believe Emirates will stay with us. I’m not getting any indication right now that they are seriously looking at canceling their order.”
On whether the A350 will primarily compete against the 787 or the 777, and on its sales prospects:
“It’s going to be both.
“[The A350-1000 is] an airplane with the range of the 777-300ER, about 15 fewer seats, and about 25 to 30 percent better cash operating costs per seat.
“Granted, you’ve got to wait a few extra years, but you get better performance and better economics than Boeing has on the table right now.
“I’ve got 100 orders already for the A350. So far, I’m not finding anybody who wants to cancel their order.”
On using composites in the A350:
“We’re talking in a range of 50 percent [composites] by weight, similar to what Boeing is doing [in the 787].
“The one thing we’re not looking at, at all, is Boeing’s concept of doing this male mold where you wrap the fabric around it and have this one piece coming off the line. Our engineering staff are pretty convinced that is not at all the way to go.
“The customers don’t seem to care that much, as long as the airplane has the performance, the economics and the reparability. And that’s where composites gets people worried a bit, on the reparability. They ask, how are we going to repair it?
“Anything you see with Airbus will have composites perhaps in sections that can be removed and repaired rather easily. Whereas what Boeing is doing is this one big male mold which produces one-piece fuselages.
“Most of the world’s airlines, at least the ones I’ve been talking to, have big concerns about that.”
On the prospects of launching a freighter version of the A330:
“I would think you will see the industrial launch of an A330-200 freighter in the next few months.
“I have a few delivery positions that I’m marketing at the end of 2009 and 2010. But with everything else we’ve had on our plate, [the A330 freighter] hasn’t been at the top of the list.
“You tend to go out to see Qantas or Emirates or Singapore first, to explain what’s happening with the A380, before you go running around asking if you’d be interested in an A330 freighter for delivery in 2010.”
On his heart surgery two weeks ago, when doctors put a couple of stents in a blocked coronary artery:
“Boeing’s market share may have had something to do with it. [a joke]
“I’ve had better years.
“I’ve been told if I don’t want to have more blockages in my heart, I ought to slow down a little bit. I did spend three nights on airplanes flying out to Australia. Unfortunately for me, that was just before I had the heart surgery.
I’m still trying to get out to meet the customers. But I guess as you get older, you slow down a bit.”
On Boeing’s strong performance and the 787:
“On the industrial side, Boeing has been doing something right.
“And they’ve clearly got a leg up on us on the 787. We didn’t see it coming. We didn’t know the level of technology that they had.”
On the 787 sales lead:
If that were a market for 1,000 airplanes, and we lost 400, that would be devastating. If it’s a market for 6,000 airplanes, which we think it can be over a 20-year period, especially when you start looking up to the A350-1000 [which competes against the 777], then you’ve got a situation where the first 400 lost are extremely disappointing but not critical.”
On the schedule for new single-aisle jet-development program to replace the A320 and 737 families:
“Boeing has much more of a need to look at single aisle than we do.
“In all my travels around the industry, I get questions about ‘When I can get A320 delivery positions?’, not ‘When are you coming out with an updated version?’
“We got caught napping on the 787. Don’t expect we’re going to fall into that trap twice. We’re watching what the level of technology is. … A whole new generation of engines has to be developed.”
On Airbus’ gangbusters production:
“We’re taking the production up to 34 a month [on the A320 narrow-body jet family]. We’re looking at even going higher. No one’s ever done that before.
“You can say it’s been the best of years, it’s been the worst of years. In 22 years at Airbus, I don’t think we’ve had this big a backlog with this level of production.”
On this year’s race for orders, which at the end of October stood at 788 for Boeing, 508 for Airbus:
“I’m not in an order race with Boeing. Which is what you would say if you were several hundred orders behind.
“We’ve really been looking at the 40 to 60 percent market-share range. … We want a duopoly that’s stable. …
“When all is said and done, I think you’ll see Airbus sitting between 40 percent and 60 percent of the market for the next five or six years. The last five years, we were above 50 percent.
“Will we be slightly below? I don’t think it matters whether we are slightly below or slightly above.”
Dominic Gates: 206-464-2963 or email@example.com