Wednesday, March 29, 2006

Leasing Kahunas Tell Airbus: Redesign or be Marginalized

It has been widely reported today that Stephen Udvar-Hazy, the aircraft leasing Big Kahuna, has told Airbus what was widely known but not talked about-that the A350 is not in the same league as the B787 it was created to compete with, and that it ought to be redesigned. Udvar-Hazy was joined in this sentiment by Henry Hubschman, president of GECAS.

Udvar-Hazy suggested that the A350 that's on the drawing boards at this date is a good design but dated, and it is limited by the 30 year old elements of its design-the fuselage cross section and the wing design. However, continuation of the present design will consign Airbus to 25 per cent of the market for this class of aircraft.

These are ominous words from two of the larger customers with orders for the A350-ILFC with 12 on order and 8 options, and GECAS with 10 on order.

It was suggested that a decision on this could be reached in a few months by Toulouse. Airbus executive John Leahy also in attendance was unimpressed.

One thing that Udvar-Hazy said that was lost in the shuffle was that he expects the A380 to sell "at most 300 to 400 airplanes".

One thing that any greenhorn customer service clerk at Walmart can tell you is that when you're hearing static like this from some of your largest customers, you had better pay very careful attention. And that doesn't seem to be the way Airbus does business-at least, not when the media's around.

Look for a big announcement of some sort to recapture the momentum of last year's Paris Airshow at the upcoming Farnborough Grand Fandango, running from July 17-23 of this year. It may well be time for Airbus to fish or cut bait as my old man used to say.


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