Airbus' Most Powerful Narrow-body Aircraft "Make a Good Start": Winning Strategic Customers, Achievi

OnJanuary 10, the first A321neo airliner assembled by European Airbus (referredto as "Airbus") at its manufacturing center in Tianjin, China, landedat Tianjin Binhai International Airport at around 12:50 p.m. This means thatAirbus has realized its plan to build the world's most popular single-aislemainline airliner in China. In addition, the A321 series models also helpedAirbus achieve another breakthrough in 2023 with the delivery of the firstaircraft to Xiamen Airlines, a key step in the transformation of a mid-sizedairline that has been operating an all-Boeing fleet for nearly three decades.

Narrow-bodyaircraft

Since itscompletion in 2008, Airbus' narrow-body assembly line in Tianjin has beenupgraded at various stages as Airbus upgrades its products by signing newcooperation agreements to have new models assembled locally in China.

From theinitial production of the A320ceo series of narrow-body aircraft, to therollout and delivery of its upgraded narrow-body A320neo family in 2017, untilNovember 2022 when it will begin production of the A321neo, Airbus' largenarrow-body aircraft with the largest number of orders in reserve and the most sought-afterin the market.

Airbus announcedin late 2021 that it will build the A321neo on its Tianjin assembly line andbegin adapting and upgrading the line for A321 aircraft production and deliverycapability in August 2022. This is the first major upgrade of the assembly linesince it began operations in 2008.

Xu Gang,Airbus global executive vice president and chief executive officer of China,said previously in an interview including the Huaxia Times, "The AirbusTianjin team worked closely with the European expert team and suppliers toovercome the impact of the epidemic situation at home and abroad andsuccessfully completed the relevant adaptation modification work as planned,which has become another milestone in the cooperation between Airbus and China."

As thelargest of Airbus' new-generation mainline narrow-body aircraft, the A321neocan carry 180 to 220 passengers in a typical two-class cabin layout and 244passengers in a high-density layout. The A321neo has a range of 3,650 nm (6,760km), while Airbus has also developed two long-range derivatives based on theA321neo, the A321LR and A321XLR, with ranges of 4,000 nm (7,400 km) and 4,700nm (8,700 km), respectively, which are close to those of some large twin-aisleairliners. This makes it possible for narrow-body airliners to operateintercontinental routes.

It is notdifficult to understand why the Airbus narrow-body family has gone from theA320ceo series, where the A320 was the backbone of the previous generation, tothe A320neo series, where the A321neo and its derivatives have become the morepopular aircraft with airlines.

Accordingto the latest order statistics released by Airbus, in the era of the A320ceoseries, the ratio of orders for the A320ceo and A321ceo was 4763 and 1791,while in the era of the A320neo series, the ratio of orders for the A320neo andA321neo became 3965 and 4609. According to the current Airbus narrow-bodyaircraft reserve order statistics, about 60% of them are this large narrow-bodyairliner.

With 931 unitsA321neo aircraft delivered and more than 3,000 reserve orders to be delivered,many airlines have just emerged from the epidemic and are eager to re-up theircapacity, and the A321neo series, with more seats and a wider range, clearlymeets the needs of airlines in terms of capacity growth, network expansion andcost control in the coming period. Flexible configuration. At the same time,under increasingly stringent environmental pressures, the trend is torejuvenate the fleet to improve fuel efficiency and reduce emissions.

It is notdifficult to understand why Airbus has already launched the A321 family ofaircraft on four assembly lines in Toulouse, France, Hamburg, Germany, Tianjin,China, and Mobile, USA, with the Toulouse assembly line being astate-of-the-art digital production line using facilities from the discontinuedA380 assembly line.

Accordingto Airbus, the first A321neo model assembled in Tianjin is expected to bedelivered to Chinese airline customers in February. In Xu Gang's view,"After the adjustment of the domestic epidemic prevention and controlpolicy, it will be very convenient for Airbus to deliver aircraft both at homeand abroad, and the cost for airlines to receive the aircraft will be muchlower."

Althoughthe impact of the epidemic on the aviation industry has caused aircraftmanufacturers, including Airbus, to slow down, especially as ambitious capacityexpansion plans have had to be delayed, according to Airbus, it is "ontrack to produce 75 units A320 series aircraft per month by around 2025."

Leveragenew customers

If theA321neo has played a key role in helping Airbus gradually start to close thegap with its competitors in the narrow-body aircraft market competition from alate start, and finally achieve the overtaking process, the greatersignificance of this model for Airbus now is that, if the previous competitionwith the U.S. Boeing Civil Aircraft Group (hereinafter referred to as"Boeing") products in the competition with Boeing Civil AircraftGroup (hereinafter referred to as "Boeing"), a lot of rival productshave been "fighting against each other, there is a back and forth",then from the second half of the market cycle of the A321ceo, to the A321neointo the market, Boeing has not been able to in its 737 and the upgradedversion of the 737MAX series models to "block "A321 quickly eatmarket share to find the right product, especially in the 737MAX in two aircrashes after a long period of grounding worldwide, so that Airbus in aircraftdeliveries behind Boeing seven years in a row, from 2019 to the present fourconsecutive years not only in the delivery volume to maintain the leading edge,but also in the number of orders has been over the rival head, truly Thecompany has achieved the later.

Boeing istired of coping with the many crises and difficult situations in front of it,and the new medium-sized aircraft project that should have been launched longago has been only in the discussion stage, watching the market gap between thenarrow-body aircraft and the medium-sized wide-body aircraft that is graduallybeing valued by the airlines is rapidly occupied by the A321 series in avirtually uncompetitive environment.

Thebigger impact for the two mainline aircraft manufacturers is that someairlines, driven by demand, have had to start thinking about choosing Airbusproducts, even if these companies were once loyal Boeing customers. Forexample, Xiamen Airlines, which has been operating a Boeing fleet for nearlythree decades since it began flying.

XiamenAirlines took delivery of its first Airbus aircraft on the first day of 2023,thus ending its history of operating a single-brand fleet. According to XiamenAirlines, "The opening of a new operational chapter for the Airbus fleetwill provide stronger capacity for Xiamen Airlines' future development."

Founded in1984, Xiamen Airlines will maintain an all-Boeing fleet until 2023, includingthe 737 series, 757 and 787. according to official data, Xiamen Airlines andits subsidiaries currently operate a fleet of more than 210 aircraft, includingthe 737 series, 787 series and the 737 MAX series, which has not yet beenreintroduced into operation.

ForAirbus, the significance of "taking" Xiamen Airlines is obviouslymore strategic than the order itself. Airbus had marketed its wide-body productto Xiamen Airlines years ago, but the airline eventually purchased twelveBoeing 787 series wide-body aircraft to begin its expansion into theintercontinental business.

The firstA321neo with registration number B-32CU received by Xiamen Airlines was thefirst of 15 lease orders from China Merchants Bank Leasing. As early as 2019,Xiamen Airlines reached preliminary cooperation intentions with Airbus andsigned the first procurement contract for 40 A320 series aircraft in September2022.

Accordingto Xiamen Airlines, the opening of a dual-brand fleet operation mode and theintroduction of new branded aircraft is an important move based on thestrategic layout of Xiamen Airlines' future development, and the airline willalso gradually promote the structural adjustment and optimization of its fleet.The new aircraft types "will not only further improve the operationalefficiency of Xiamen Airlines, but also provide more comfortable air travelexperience for the passengers."

Accordingto Xiamen Airlines, its first A321neo will be put into commercial operation inthe spring after a verification test flight, and its initial route will be fromXiamen Gaoqi International Airport to Beijing Daxing, Chengdu and Shanghaiairports. The aircraft has a total of 208 seats, including eight business classseats and 200 economy class seats.

Althoughthe Boeing 737MAX series also has the 737-10 and 737-8200 models withcomparable passenger capacity to the A321neo, but in addition to the groundingfactor, these models have failed to give the A321neo a challenge in terms ofperformance indicators or time to market, especially the 737-10 is Boeing'slargest 737MAX model 737-9 and the A321neo. The 737-10, in particular, is amodel that Boeing launched by lengthening the existing model design in the faceof the 1:5 sales of the 737 MAX 737-9 and A321neo, and obviously still fails tobecome a real challenger.

It is nothard to understand why Xiamen Airlines decided to switch to Airbus even thoughit was almost established as Boeing's "benchmark" customer in China.After all, for a medium-sized airline like Xiamen Airlines, its flexibility inaircraft type selection and demand fit determines the quality of its routenetwork and cost control, which is the key to maintaining its advantage in theincreasingly competitive airline market.

"Exceptfor some relatively small-scale airlines and low-cost carriers, full-serviceairlines of a certain scale usually do not completely adopt single-brandoperations," said a person working for a state-owned airline in an exchangewith the Huaxia Times, "on the one hand, the route network demand is morecomplex, on the other hand is like the 737MAX long time grounded cannot bedelivered this kind of risk, Xiamen Airlines fleet size since 2020 almost nogrowth, but if there is no epidemic, and adhere to a single brand fleetoperations, it is clear that will face a capacity crisis."