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Airbus pledges boxers’ counter-punch to new Boeing mid-jet

Airbus pledges boxers’ counter-punch to new Boeing mid-jet

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TOULOUSE, France (Reuters) – Airbus held out the prospect of a clash over prices to counter any decision by Boeing (BA.N) to launch a new aircraft in the middle of the jet market, by promising a “left hook, right hook” counter-punch with two of its existing models.

FILE PHOTO: The Airbus logo is pictured at Airbus headquarters in Blagnac near Toulouse, France, March 20, 2019. REUTERS/Regis Duvignau/File Photo

U.S. planemaker Boeing is studying whether to launch a 220-270-seat jet wedged between traditional twin-aisle models like the Airbus A330 and its own 787, and the industry’s bread-and-butter single-aisle models like the A320/321 and Boeing 737.

Airbus aims to defend that space with its own A330neo at the top end and the best-selling A321neo at the bottom – two models boasting new engines on older airframes.

“Those programs are both so mature that it gives Airbus pricing flexibility to address this middle-of-the-market segment,” sales chief Christian Scherer.

He promised what he described as a “left-hook, right-hook approach” to that part of the market as airlines replace Boeing 757 and some larger 767 aircraft.

Boeing says its possible all-new aircraft would be significantly more efficient than either Airbus model, but it is under pressure from airlines to develop it at the right price.

Boeing continues to work on the project behind the scenes while toning down public discussions as it focuses on resolving the crisis over its grounded 737 MAX, airline sources say.

The two giants are playing reverse roles at the top end of the $150 billion annual jet market, where Boeing’s upcoming 406-seat 777X – a derivative of its 777 mini-jumbo with new engines – is up against the newer and slightly smaller A350-1000.

Scherer mocked the 777X as a “re-engined Hummer” hobbled by excess weight compared to the carbon A350. Boeing, which recently won a deal to sell the 777X to British Airways after a gap in sales, maintains it is the most efficient plane per seat.

Airbus played down concerns that the aviation industry is reaching the top of its business cycle after a near-decade-long expansion since the immediate aftermath of the financial crisis.

“The market remains quite positive” and less dependent on economic cycles than before, he told a media event in Toulouse.

Airbus officials nonetheless voiced concerns over the impact of renewed trade tensions on demand.

Worries about a trade war between the United States and China have rattled financial markets this month.

Last week, global airlines body IATA said it expected increasing trade tensions and higher costs would mean a cut in 2019 industry profit forecasts.

Reporting by Tim Hepher; Editing by Sudip Kar-Gupta

Our Standards:The Thomson Reuters Trust Principles.

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