Airbus eyes to expand A220 jet capacity amid dwindling demand
(Bloomberg) -- Airbus SE has been sounding out customers appetite for a longer version of its A220-300 jet that would give airlines more seating capacity but at the expense of range.
With the Paris Air Show kicking off on Monday, the plane that's been dubbed the A220-500 is again back in focus. Airbus is hoping to win fresh deals for its existing A220, including from AirAsia for as many as 100 units, people familiar with the talks have said. The European planemaker has been saying for years that it was a matter of when, not if, it moves forward with a bigger version of the airliner.
Such a derivative would create a more modern alternative to the smaller variants of its A320 family and take on Boeing Co.'s 737 Max, without the US company having an obvious response.
Airbus needs to rekindle demand for the aircraft given the A220 has a dwindling backlog and remains unprofitable. Total net sales shrunk by 10 units since the beginning of last year. The aircraft also hasn't picked up a single new order so far this year, instead suffering one cancellation. The backlog stood at just under 500 at the end of May.
The company favors a simpler engineering approach that maintains the same wing and engine to the existing planes, according to people familiar with the planemaker's conversations with customers.
While that option would mean a trade-off with range — including an inability to fly coast to coast in the US — it would enhance capacity and require a less complex and expensive development process that could take years to complete, said the people, who asked not to be identified discussing private deliberations.
The people cautioned that a simple stretch version is one of the options being considered, and that a final decision hasn't been made, with the timing still in flux.
An Airbus spokesperson said the company will continue to invest in the A220 platform and that the company will explore all options. Any decisions on future variants 'are not made until they are made,' the official said.
The planemaker inherited the engineering studies for a third A220 model when it took control of the jetliner family from cash-strapped Bombardier Inc. in 2018. Bombardier designed the aircraft then called the C-Series but struggled to build sufficient sales.
A larger A220 variant would create a new narrowbody offering in a market starved for next-generation jets. Both Airbus and Boeing are sold out into the next decade for their popular A320 and 737 airliners, and neither company is close to coming out with an all-new model to replace the workhorses of the industry.
The version being floated to airline customers would lengthen the fuselage of the A220-300. Another benefit of a more straightforward stretch is that such a version would likely face fewer certification hurdles with regulators, given the overlap between its design and the aircraft currently in service.
The approach is popular with customers like Air France-KLM, which doesn't need the longer transcontinental in demand with US airlines. But the trade-off over range might be a dealbreaker for some A220 operators, particularly US carriers plying the lucrative transcontinental routes, some of the people said.
Still, it would save Airbus from having to seek a new engine model from Pratt at a time when the supplier is dealing with a costly repair program for its GTF-model family that has grounded hundreds of planes. A larger turbine would necessitate a redesign of the wing and the pylons from which it hangs, investments that could quickly run into the billions of dollars for Airbus and its suppliers.
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