Airbus May Redesign A350

April 10, 2006
CEO Humbert responds to criticism from senior aviation executives -- and to Boeing's sales gains.

Airbus said Monday it would consider improving the design of its wide-bodied A350 airliner after the planned fuel-efficient jet drew criticism from senior aviation executives.

Airbus CEO Gustav Humbert, speaking at the inauguration of a new facility at the company's headquarters in southern France, said the European aircraft maker "has every reason to go the extra mile" to ensure its products respond to customers' needs.

Humbert was responding to remarks by Chew Choon Seng, chief executive of Singapore Airlines Ltd., a key Asian customer.

Having gone to the trouble of designing a new wing, tail and cockpit using advanced composite materials, Airbus "should have gone the whole hog and designed a new fuselage," Chew said last week.

Humbert stopped short of committing Airbus to make changes to the A350, but he said the company was studying all options amid an "intensifying dialogue" with airlines.

Airbus hasn't yet started cutting metal for the A350, which is currently scheduled to enter service in 2010.

He acknowledged that Boeing had gained ground against Airbus in the market for longer-range planes such as the A350's main rival, the 787 "Dreamliner, which is set to begin commercial flights two years earlier.

"Boeing's sales advantage was based on the fact that it launched its 787 much earlier and scored some strong marketing points against us," Humbert said.

The 787 "has strongly contributed to a great Boeing comeback story which they so urgently needed after all the trouble they had," he also conceded.

But Airbus will not rush into any quick-fixes, Humbert stressed. "Our strategy isn't driven by the needs of the next one or two campaigns, but rather by a long-term view of the market and our ability to deliver on our promises," he said.

The A350 was originally intended to be an upgraded version of Airbus's existing A330, a medium-capacity twin-engined jet, in what would have been an economical way to compete with the 787. However, rising fuel costs have already forced Airbus to redesign the aircraft once to make it attractive to airlines.

Steven Udvar-Hazy, chairman of leasing company International Lease Finance Co., Airbus' largest customer, recently criticized Airbus for basing the A350 on an older design.

The company is "at a crossroads," Udvar-Hazy told an industry gathering in Florida. "It needs to address whether it needs a new family of aircraft."

Airbus is already spending billions to develop the A350 and the A400M military cargo plane, however, and will only start earning serious revenue from its A380 double-deck superjumbo at the end of this year. The government loans that fund one-third of its airline development are also the subject of a trans-Atlantic World Trade Organization dispute over subsidies to Airbus and Boeing.

Humbert also commented on the Friday announcement by Britain's BAE Systems PLC that it had begun preliminary talks on selling its 20 percent share of Airbus with European Aeronautic Defence & Space Co., the Dutch company which owns the other 80 percent.

Although BAE's interest in selling the stake had been known for some time, Humbert said, "the timing came as a complete surprise to us."

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