Airbus may be reworking its newest twin-aisle airliner, the A350, as cancellations increase amid criticisms of the new jet. Boeing could benefit from Airbus’ snags as they plan their next plane to succeed the 777.
The pending decisions on the 777 and the A350-1000 show the risks in an industry whose products cost billions of dollars to develop and typically stay in production for decades. While Airbus and Boeing share a duopoly for single-aisle jets, the U.S. company holds the advantage in wide-body planes, which offer higher margins because they cost three times as much.
“Airplane development is one of the best real-life case studies in game theory,” said Carter Copeland, a Barclays Plc (BARC) analyst in New York. “These are big bets with long-life paybacks. Decisions about components, technology, production systems, all have an important bearing on the long-term profit profile of these programs.”
The A350-1000 was initially scheduled for delivery in 2015, before Airbus announced a delay in late 2011, saying it needed another 18 months to boost the performance of the largest member of the A350 line. Qatar Airways and Emirates, the biggest A350 buyers, have said they still aren’t content with the design, adding pressure on Airbus as Boeing plots what comes after its 777-300ER.