Why Airbus Was Smart Building The A330neo

The Airbus A330neo program is a bit of a white elephant in the aviation world. Despite being a fantastic aircraft with lots of technological upgrades over its previous iteration (the A330), it’s not selling well. Yet building it was one of the smartest choices Airbus has ever made.

The A330neo is a smart move by Airbus. Photo: Hi Fly

Why is the A330neo unsuccessful?

If you are unaware, the A330neo series (comprised of two different variants) has not yet been commercially successful for Airbus. There are two main reasons for this.

The first reason is that there is not much market demand for the type. The A330 series is still in its infancy with many of the type still under 10 years old and perfectly operational for airlines. This means that airlines are in no rush to swap out the aircraft

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The second reason is that, because the A330 series was so successful, there is actually plenty of A330 aircraft available on the market second hand. Why buy an expensive A330neo when you can buy a relatively new A330-300 that roughly matches capacity and range (without the NEO improvements). With this in mind, the Airbus A330neo series seems like it won’t really get going in terms of sales until much later.

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the a330neo
The specs for the A330-900 look pretty impressive on paper. Photo: Airbus

However, Airbus was still very clever to make it, because it gives airlines an alternative to the very successful Boeing 787. 

Boeing 787 vs Airbus A330neo

As an aircraft comparisons go, the Boeing 787 series easily seems to take on the Airbus A330neo and walk away victoriously (you can read about the differences here). Because its a white paper design and not a derivative of an existing aircraft like the A330, it can bring to the table new integrated technologies. Concepts like a carbon fiber fuselage, bigger windows (that dim without shutters) and better cabin pressurization.

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These fresh ideas made the Boeing 787 incredibly popular and the type has gone on to receive over 1,485 orders and made Boeing open a 2nd production line just to complete the demand.

In fact, looking at the numbers and how many are set to be rolled out in service you might think that compared to the Airbus sales there is not a chance for the A330neo.

However, it is this very success that justifies the A330neo.

The moment for the A330neo might be just around the corner. Photo: Hi Fly

Why is the Airbus A330neo a good match for the Boeing 787?

Because there are so many orders for the Boeing 787, this means there is a significant wait for the type, upwards to 4-6 years for any specific type of 787.

Thus, airlines who are looking to buy a Boeing 787 need to put their fleet upgrade plans on hold, or hope that another airline doesn’t step in to take advantage of any unique 787 opportunities until they get the type. Unless, of course, there was another manufacturer of an aircraft that could fit the same mission profile as the 787.

As there are so few orders for the Airbus A330neo, Airbus can pump out the aircraft way faster than any 787 order and airlines can be flying in 1-2 years as opposed to the many more with the 787. Plus, because the A330neo is a minor upgrade to the A330 series and didn’t involve years of fresh thinking and design, it is significantly cheaper.

According to figures, both the 787 and A330neo are priced around $300 million USD range, but because it only cost Airbus $2 billion USD compared to the Boeing 787 programs cost of $32 billion USD, Airbus has incredibly wiggle room to beat Boeing off in price.

With the A330neo being quicker to build and cheaper, it has been very tempting for some airlines and will continue to steal some orders from Boeing for years to come.

What do you think? Which aircraft do you think is better? Let us know in the comments.

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Robert

I think the A330neo program has so far been much more profitable than the B787 program.

Jethro

787 will go fut before the a330neo anyway

Frank

Boeing is still down some $20 billion in sunk costs as of Q4 2019, which is why they have slowed production

atlas

Hmm, I really dont think that there is so much demand for 787.
https://simpleflying.com/boeing-787-production-rate/

High Mile Club

As I see it, the A330neo isn’t that successful because the A350 exists. They can’t prop up the neo because it’d likely eat into the profits for the A350, and both it and 787 left the A330neo in the dust. The neo might be cheaper, but if airlines have the funds ready (plus discounts), they’re may be more inclined to buy something completely new if it looks attractive.

Mark Taylor

The A350 is comparable to the B777-200/300 series. The A330Neo is more a direct competitor to the B787 so should be more or less different markets

Steven W

The A330neo, especially the 900, is a great airplane although not as efficient and capable overall as the B787. However it is much cheaper for Airbus to manufacture and therefore sell. They can use it to target specific sales campaigns and, importantly, to force Boeing into heavy discounting. If the purchase price is right the airplane becomes very effIcient for the airline despite slightly higher operating costs. It also allows A350 operators to use the same pilot pool. The B787 hasn’t sold very well in recent years and the backlog is eroding fast. Boeing is having to cut the build… Read more »

High Mile Club

Hate to call you out on this Steve but the 787 has been outselling the A330 since 2014. I’m getting this from Wikipedia (I know anyone can edit it, but no one seems to be callous enough to put misleading info about aircraft), and the numbers for delivers are shown as follows (for all variants): A330: 2014 (108), 2015 (103), 2016 (66), 2017 (67), 2018 (49), 2019 (53) 787: 2014 (114), 2015 (135), 2016 (137), 2017 (136), 2018 (145), 2019 (158) As for net orders, it’s hard to find the chart for the A330. I found it for the 787,… Read more »

Steven W

No problem with you calling me out HMC but I don’t think you are right. I do agree the figures are not easy to get at but from Wikipedia the total nett orders for the B787 since 2014 up to the end of 2019 is 455 (41 + 71 + 58 + 94 + 109 + 82). I chose 2014 because that was the first year that the A330neo was available. Wiki doesn’t give nett orders for the A330 but Airbus does in the spreadsheets it publishes each year. From those we can calculate that they have gained nett orders… Read more »

High Mile Club

I tend to avoid using the manufacturer’s sites directly since sometimes those numbers could be inflated or outdated since orders can be cancelled; though by that logic, wikipedia would be wholly inaccurate. I find it bothersome that no single sheet has all the net orders for each year for the A330; the average person just doesn’t have time to do the math for each number and would prefer an easy quick look. That being said, thanks for looking that up, though the numbers don’t seem to add onto the hype that ought to be going with this if the A330… Read more »

Steven W

HMC, I agree. The quality of some of the Neo orders is questionable whilst most of the B787 orders seem to be more substantive. Time will tell. The A321XLR represents a real and present danger to both the A330-800 and the B787-8. Whilst Airbus will no doubt be sanguine about that challenge it does pose a major threat to Boeing. As a Boeing fan that disturbs me. It would appear they have their strategy wrong. Obviously the MAX issue has knocked their plans too. That said if the XLR really is what the airlines want the delay may have prevented… Read more »

High Mile Club

What airlines want is another, new 757. The XLR is closest they can get to it in today’s market.

Trent

You’re not wrong about the B787 backlog dwindling fast. That SC plant doesn’t look like such a great idea now. One thing for people to keep an eye on is that the A350 backlog is shrinking fast also.

Trent

The argument here is that designing and producing the A330neo was a good decision…..because its not selling well? Good for airlines is not the same as good for Airbus. I believe that Airbus would much rather have the B787 order book than its own. There are more remaining orders for the dinosaur that is the 747 than the A330-800. Boeing should never have opened a second plant for 787 production, but that is a different story. Airbus is pumping out around 45 A330neos a year and Boeing is flooding the market with over 150 B787 per year, and at that… Read more »

Robert

I am sure Airbus wouldn’t mind the B787 backlog, but I am also pretty sure Airbus would mind the $32B development and manufacturing cost.
The initial cost was $6 billion.
The A330neo program cost was $2 billion.
It is not certain that the B787 program will ever be profitable

Matt

Not everything sells like an A320/737. The A330neo already has 337 orders. There are plenty of aircraft historically that have had less and we’re considered successes. It’s enough to maintain an order backlog, and that’s all Airbus really needs. What it does do successfully is is force Boeing to sell the 787 for for way less than it would otherwise. The rumors I’m hearing are that 787 orders like Hawaiian’s were at a very above normal discount. Airbus basically sucked out the 787s price premium that it would have without it.

A Comfortable Seat

Actually, it felt more like Airbus didn’t want to lose that whole segment of the market to Boeing, so they developed the neo as (back then) the ceo had a production backlog of about two or so years. The A350 could’ve been the answer, though it more so competes with the 777 due to its size and weight class. By the time the A330neo came into play, the 787 had a few years under its belt, and some operators were already swapping out their old A330s for 787s. I know of a few airlines that come to my airport that… Read more »

Steven W

Airbus has sold more A330s (520) since 2014, the year the A330neo became available, than Boeing has B787s (455).

Joe

Wouldn’t fly a Boeing aircraft for love or money anymore so yes please Airbus

Henning

The A330neo has 337 Orders and a development cost at 2 billion US dollars, the 777x has 309 orders and a development cost at 5 billion US dollar.
So if the A330neo program is considered to be unsuccessful by those numbers, the 777x program most be considered as a failure.

chaim

yo the 777x isn’t even flying yet, give it some time and tou’ll see what a success it is

Henning

The 777x program was released in 2013, the A330neo in 2014 and both of them are developed from previously successful models who has been in operation for decades.
They both are old aircrafts with new wings and engines and some other tweaks

janj

A330 neo though is not selling like hotcakes today, Airbus has been positioning the model; firstly, for continuance of production of the A330 model, secondly, as mentioned, as a cheaper alternative to B787 and lastly, to have a replacement option for the old A330. One mistake Boeing did was that they killed B757/767 with out a clear product portfolio to replace them (after shelving the B787-3). Airbus has seen that the A350-800 was a non seller (supposed to be the natural replacement for the A330’s) opted to reengine the A330. So the A330 production lines will be continuing and with… Read more »

Mark Taylor

Cannot call the A330Neo a white elephant as almost every frame makes a profit for Airbus due to the low developing and production costs which gives Airbus the chance to offer bigger discounts to customers compared to the B787. And 300+ orders for the A330Neo is not a bad return considering they are still delivering the A330Ceo version as well. The B777X only has 300 orders and has cost more in development yet no-one calls that a White Elephant for Boeing. Also you cannot compare the A350 with the A330Neo as the A350 is a larger aircraft on par with… Read more »

David

Interesting arguments and opinions. I guess it is human nature to develop loyalties for various reasons. The Boeing v Airbus seems like a political scenario where we pick (nit-pick?) on every morsel of info to support our personal following or denigrate the opposition. Credibility is at stake when lies and distortions are told. Being a “pom”, and justifiably very proud of British aviation especially from a historical view, I am an Airbus fan. It would be most uncharitable to suggest that Boeing wings might fall off, my credibility would suffer. Or would it! I am however very upset that ANY… Read more »

Matthew M

I agree cheap(er), efficient and available to purchase beats full price and a waiting list. But the airline industry often never makes sense in retrospective.

Richard Otiso

I thought Boeing 787 competes with Airbus A350 and not the A330neo?? I think the A330neo will compete with Boeing 777-300ER as they are the same class somehow.

Oliver

Since the moment that in a A330neo you can fly in a 2-4-2 abreast and in a 18″ wide seat, I prefer this rather than the more cramped B787.

Mike Cooper

Sometimes it can be as simple as a name change. Do carriers see the A330Neo as a minor upgrade because it still uses the same model No? Perhaps if it had been designated A335 it would have created greater interest for existing A330 operators as it would imply that it is a major modernisation the original A330 rather than a minor upgrade. Just a thought.

Gene

It was a relatively inexpensive derivative that applies pricing pressure on the leader in the market segment, the 787, which is a good thing (Airbus to airline: “We can deliver an airplane faster and cheaper that only costs X% more to operate than a 787”). A somewhat similar analogue on a much smaller scale is the 747-8i, which was priced considerably lower than the A380, and while the A380 sold better, it likely had to make concessions to customers by competing with Boeing proposals.