In the beginning of December Airbus announced its plans to raise the seat count of the existing A340s by 8% and improve the plane’s economics as well as lower maintenance expenses for operators due to the commonality of A340s parts with some of the other models. However, shaken by the recent global economic crisis and unsure of the future ahead carriers are reluctant to take Boeing’s word for it as the manufacturer is still struggling to produce hard evidence behind its ambitious cost-cutting efforts.
Two years ago, Airbus halted the manufacturing process of its A340 passenger jets. The demand for the model introduced in 1993 dried up as the oil prices rose and aircraft makers were forced to introduce more energy-efficient aircraft, like Boeing 777-200LR. Now, after watching the prices of second-hand A340s decline for years, Airbus is struggling to breathe new life into the aircraft secondary market.
“Although the A340 has proven useful for some carriers, such as Norwegian Air Shuttle, which ended up leasing A340s while Boeing struggled with the technical problems of its Dreamliner, the overall attitude towards the aircraft spells no good news for the manufacturer,” comments Zilvinas Sadauskas, the CEO of Locatory.com. “Many carriers have stated that the plane’s latest model uses up to 30% more fuel than the Boeing’s 777x or Airbus’s A350. As a result, in the process of fleet renewal, they are re-selling the planes, which were once worth approximately $120 million each, for as little as $20 million. Certainly, in such a context, Boeing’s strategy of buying back its 747’s, which have faced similar problems, seems like a smart move.”
Although currently up to 350 of 377 A340s built remain in service, more than 50 are kept in storage. However, as Airbus forecasts up to 325 of the aircraft to be still operating in 2017, the current struggle to upgrade them does seem worth a shot. According to the manufacturer, with 475 seats, the A340 would accommodate more passengers while offering a 7% reduction in operating costs. Moreover, an A320/A330 operator introducing A340s could save up to $2 million over 5 years due to the commonality in airframe spares alone, not mentioning maintenance and training, compared to the cost of introducing a non-Airbus type.
“Certainly, the savings brought about by the aforementioned commonality sound impressive. Nevertheless, these numbers require confirmation, which may be gained only after the actual application of the proposed model. In such a competitive industry as aviation, trying and failing might be too large a risk to take,” says Zilvinas Sadauskas. “Thus, if the plan doesn’t work out, the manufacturer might be left with a much less attractive option, stemming from the parts commonality: to buy back the unused aircraft and tear them down for parts. In any case, compromising the reputation among loyal clients would definitely come at a high price.”
