In order to maintain and expand market share both Boeing (NYSE:BA) and Airbus (OTCPK:EADSF) came up with new airplanes. The Boeing 787 saw its first commercial flight in October 2011, but has been coping with battery problems and other problems lately. The Airbus A350 has made its maiden flight, but still awaits its first commercial flight.
The Airbus A350 comes in 5 variants, each should be able to compete with its Boeing counterpart:
* Subject of this article
As all 5 variants and their counterparts take different spots in the payload vs. range diagram, I will use this article to give a bit more information about the Airbus A350 design and go compare the Airbus A350-800 and the Boeing 787-9. The other 4 variants with their respective counterparts will be dealt with in future articles.
The Airbus A350, at that time a redesign of the Airbus A330, was to be announced on the 2004 Farnborough Airshow, but the launch of the A350 was announced more than 1 year later in October 2005. Development costs were estimated to be 3.5 billion euros. The A350 was supposed to be a 250-300 seat wide body airplane, but eventually this number was upped to 350. As the A350 was intended as a replacement for the successful A330 and the less successful A340 it shared the same fuselage characteristics as the A330 fuselage. The market's wish however was to have a redesigned fuselage, offering a wider cabin. The wings, engines and horizontal stabilizers were redesigned and fuselage would be sport new composite materials. Although the fuselage would be made primarily out of the lighter composite material, the market forced Airbus to change the fuselage dimensions.
Lead by potential customers for the airplane, Airbus redesigned the fuselage of the airplane. From this point Airbus added the abbreviation XWB (standing for eXtra Wide Body) to the name of the A350 to emphasize that its fuselage would be wider than that of its competitor: the Boeing 787. The Boeing 777 still has a wider cabin though. The term XWB would appeal to passengers as it implies that there will be more space for passengers, but in fact this also allows for 10 seats per row (lower passenger comfort), which would appeal more to (low cost) airlines. At this point the change to the XWB concept delayed development of the A350 by 2 years, increasing the development costs to 9.7 billion euros.
The A350 has 2 engine options:
- Trent XWB (Rolls Royce)
- GEnx (NYSE:GE), only for the A350-800 and A350-900
General Electric decided only to supply engines for the -800 and -900 versions of the A350 as the company is not willing to 'compete' with its highly successful engine on the Boeing 777. Consequence of this decision was that GE lost contracts of bigger GE operators to RR. On the 14th of June 2013, just before the start of the Paris Airshow, the A350 made its maiden flight.
Detailed look at the design
Just like the Boeing 787 and the Airbus A380, the Airbus A350 pushes the boundaries when it comes to the use of new materials:
Whereas most conventional airplanes are primarily built out of Aluminum and Aluminum-Lithium alloys, on the A350 the composite materials are primarily used. Titanium is used for the parts that should be able to withstand high torques and/or bending moments. Aluminum is still used for the parts that are hard to manufacture out of composites.
Compared to the A330 and the A340, the A350 will offer more passenger comfort, offering a bigger overhead storage, bigger windows, more headroom and a wider cabin.
The wing will be completely manufactured out of composites, offering the biggest wings for single-deck airplanes available nowadays. This means that more lift can be generated and less trust (thus less fuel) is required. The A350 makes use of winglets to reduce the loss of lift due to vortices.
Similar to the Airbus A380 and the Boeing 787, the conventional gauges have been replaced by glass displays.
With the A350, Airbus offers an airplane that has better performance characteristics than its older Airbus A330 and A340, increased passenger comfort and a modern flight deck, giving orders for Airbus' long range aircraft a boost.
Comparing the Airbus A350-800 and the Boeing 787-9
Whereas Airbus wants to make a comparison between the Airbus A350-800 and the Boeing 787-800, claiming a lower fuel burn, Boeing points out that the Boeing 787-9 is better airplane to make the comparison with. Looking at the passenger and range for both airplanes, I think this comparison is the most reasonable as well.
Cabin width [m]
LD3 containers [-]
Wing Area [m2]
List price [million $]
Engine power [kN]
* Better in the comparison
Looking at these numbers a couple of conclusions can be drawn:
- As Airbus promised the cabin will be wider for better 'passenger comfort', but the difference is only 12 cm. If there are 9 seats per row this is only 1.33 cm per seat.
- Looking at the payload (passengers (typical 3 class configuration)+ cargo) and the range, one could say that the Boeing 787 is favorable.
- When it comes to MTOW, Airbus leads the way. Normally MTOW numbers are used to indicate how much fuel can be taken on the flight. The higher the MTOW, the more fuel can be stored. Although the A350-800 has the higher MTOW it stores less passengers, less LD3 containers and less fuel. This means that the structure weight is higher than that of its competitor the Boeing 787-9. One of the reasons for this high structure weight is that the airplane has not been tweaked (effectively/actively).
- The Airbus A350-800 has bigger wings than its Boeing counterpart. As the lift force scales with the wing area, one could say that the -800 is able to generate much more lift (on lower airspeed). On the other hand, one could also say that the A350-800s bigger wings have to lift a heavier structure and less payload compared to the Boeing 787-900.
- One of the important characteristics of an airplane that determines the drag is the aspect-ratio (AR). The drag coefficient can be lowered by increasing the aspect-ratio. Lower drag means, lower fuel burn and less fuel costs. So when it comes to drag the Boeing 787 has an advantage with its high aspect-ratio wings.
- Range numbers are equal.
- Looking at the fuel/km and the fuel/km per passenger (nota bene: this is not the specific fuel consumption!), the Airbus A350 seems to be performing better. Accurate fuel burn calculations are not available at the moment.
- With the Boeing 787-9 an airline has a cheaper airplane that can carry more passengers in 3-class configuration. Airbus on the other hand claims maintenance costs for the Airbus A350-800 are lower.
One could say that Airbus cannibalizes sales on the Airbus A330-200 in favor of the Airbus A350-800, but Airbus already has a suitable airplane that can fly farther to replace the Airbus A330-200 in a couple of years.
It should be noted that the Airbus A350-800 has not been 'tweaked', the A350-800 is in general just the same plane as the A350-900 but with some sections (10 frames) taken out and a slightly less powerful engine.
When it comes to passenger comfort, the A350-800 is more appealing, but Boeing delivers a good airplane as well.
When it comes to dense seating configuration the Airbus A350-800 will be the better choice as well as it can carry up to 440 passengers, but this reduces the range of the aircraft.
The Airbus A350-800 will enter service in mid 2016, while the Boeing 787-9 will enter service in early 2014. This means that orders for the A350-800 are squeezed on 1 side by orders for the Airbus A330-200 and on the other side by the Boeing 787-9 that will enter service 2 years earlier.
Although the A350-800 and 787-9 have quite similar characteristics, both aircraft fulfill different roles in their respective product lines. The Airbus A350-800 is meant as a replacement for the successful Airbus A330-200 (517 deliveries and 68 orders in backlog). Given that airlines are still ordering the 330-200, while Airbus kept tweaking the 330-200 to compete better with the 787 it might take years before airlines will start replacing their 330s by the 350.
The 787-9 was introduced as a replacement of 767-400ER (and 747-400M), which both did not gather a lot of orders and are out of production now. So to some extent it can be said that Boeing is exploring a 'new' spot in the range vs. payload diagram.
It could be said that Airbus is bringing a replacement for an airplane that is successful and still quite new. While Boeing brings an airplane that replaces 2 old models (the base models for the 767 and 747 are decades old by now).
I think Boeing did a better job when it comes to timing the introduction of a new model, it reflects in the order numbers as well.
Guidance and production rates
Boeing expects that by 2032 there will be demand for 3300 medium wide body aircraft. Airbus didn't specify a number for this category but expects demand for 7273 wide body aircraft, while Boeing are slightly higher with 8590 aircraft.
The Boeing 787 now has a production-rate of 10 airplanes/month, which should be 12 per month at the moment the A350 enters service and 14 per month by 2020.
The Airbus A350 that will enter service 2 years after the 787 is expected to have a rate of 10 airplanes per month. This gives the Boeing 787 a big advantage over the A350.
Orders and financials
Although the Airbus A350-800 seems to be a strong airplane in the market, it does not reflect on the order numbers:
As can be seen the Boeing 787-9 has 6-7 times more orders. In the future, orders for the Airbus A350-800 can be expected to grow as companies will start replacing their Airbus A330-200s in favor of the A350-800, which has a larger range.
In my opinion both airplanes are good options, but due to the earlier service-entry and higher production rate, Boeing has an advantage over Airbus. The characterizing numbers are similar, with a difference in price being the only ´big´ difference. Time will learn how characteristics like fuel efficiency are in real life.
So far the A350-800 has gathered 61 orders with a book value of 16 billion dollars. Given that the Airbus has an order book worth over 795 billion dollars (Airbus Commercial), the Airbus A350-800 will not make a big difference that will make this stock fly higher, but I expect that orders for the A350-800 will grow and add significance to the order book and add to the strong financial results of this company.
At this point the Airbus A350-800 makes up for 2% (approximated) of the order book. In short the Airbus A350-800 will add to the strong financial position of this company.
Although the 787 is having a lot of problems the orders for the 787-9 are strong (worth 96.4 billion dollars). The Boeing Commercial Airplanes department has an order book filled with orders worth of 345 billion dollars. The Boeing 787-9 has a significant contribution to the order book. If Boeing manages to solve the problems that they have with the 787, orders will grow even further and will keep the order books filled.
Looking at the performance of Airbus (blue, +78%) and Boeing (green, +84%) it can be seen that both companies did quite well. Since the market outlook for the aviation industry is quite good, I think both companies have huge upward potential for 2014. Airbus being the cheaper stock and lagging a bit (compared to Boeing) is more favorable, regardless of the order numbers for the lower order numbers for the Airbus A350-800. It does not hurt to have both stocks in your portfolio though.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.