New A320 On anvil, Boeing raises doubt

Airbus SAS is in final negotiations with suppliers about a reworked version of its bestselling A320 and is poised to unveil a more fuel-efficient version as early as next month, Chief Operating Officer Fabrice Bregier said.

New engines on the A320 would cost 1 billion euros ($1.3 billion) to 1.5 billion euros, a fraction of the $10 billion a brand new model could reach in development, Bregier said. Airbus has forged preliminary agreements with two engine makers and is talking to suppliers of nacelles that house the engines, landing gear, and other equipment that would need changing, he said.

“If we re-engine, we give the plane another 10 years to live,” Bregier said in an interview in Toulouse, France, where Airbus is based. “We’d sell another 3,000, 4,000 more planes, so it’s worthwhile for us to look seriously at how we can have equipment evolve or change.”

Putting new engines on the A320-series planes would help Airbus satisfy airlines seeking greater fuel efficiency in the face of rising oil prices. The move would also put pressure on Boeing Co. to reconsider its 737 model, after indicating it may skip a reworked version because it would not meet the efficiency gains that airlines demand.

The final decision to approve the business case for new engines hasn’t been signed off on, and the company is still “talking in the conditional tense,” Bregier said. He and other members of the executive committee gathered in China last week for their monthly strategy meeting.

Engine choices
The A320 family of aircraft offers the choice of two engines. One, the CFM56, is built by CFM International, a joint venture between General Electric Co. and Safran SA of France, and is also the only model available on the Boeing 737. The other, the V2500, is manufactured by International Aero Engines, a group that includes Pratt & Whitney and Rolls-Royce Group Plc.

New engines would involve a more fuel-efficient version of the CFM56 model with a new hot section, or core, and a new model from Pratt & Whitney, whose geared turbofan allows the outer fan to turn at different speeds, using less fuel. Pratt would be returning to the narrow-body market as a solo supplier for the first time since the 1980s.

Shares of European, Aeronautic, Defence & Space Co., which owns Airbus, were 0.2 per cent higher at ¤18.96 as of 12:18 pm in Paris. The stock has added 35 per cent this year.

Lucrative market
While the A320 and 737 are the smallest jetliners built by Airbus and Boeing, single-aisle planes are the most widely flown and the market is seen as a crucial one for manufacturers.

Airbus has handed over more than 4,000 A320s since the series was introduced in 1988, helping it to leapfrog Boeing as the No 1 planemaker in 2003, while the 737 has achieved in excess of 6,500 deliveries since its debut in the 1960s.