Airbus May Beat Boeing to Market With Range-Boosting Plane

(Bloomberg) -- Airbus SE could build a longer-range version of its newest narrow-body jet by 2023, according to prospective buyer Air Transat, beating a competing Boeing Co. model to the market.

The Canadian carrier's president, Jean-Francois Lemay, has been briefed by Airbus on its thinking regarding service entry for the proposed aircraft, as well as by leasing firm AerCap Holdings NV, the biggest supplier to its fleet, he said in an interview in London.

A development of the existing A321neo known as the XLR for extra long range, the Airbus plane is under consideration as Boeing mulls a launch decision for a family of mid-range jets with the working title New Mid-Market Aircraft, or NMA. That model is a wholly new design and wouldn't reach airlines until about 2025, Chief Executive Officer Dennis Muilenburg said on a July earnings call.

“We're a natural buyer for the XLR,” Lemay said Thursday, adding that the current LR -- or long-range version -- of the A321neo that will join its fleet from next year has the capability to reach Britain, France, Spain and Portugal from Canada, but won't be able to serve European locations further east.

No Date Yet

Airbus hasn't yet indicated a service-entry date for a new plane. Asked about the 2023 timing, a company spokesman said that “it's no secret the A321 still has lots of potential.”

Lemay also gave some insight into the likely range of the aircraft, saying it would easily reach destinations such as Split in Croatia, which Air Transat plans to serve from 2019. The route will initially use the carrier's fleet of Airbus A330 wide-bodies as it's beyond the reach of the A321neoLR, he said.

The A321neo is already nibbling away at the bottom end of the 220-to-270-seat market Boeing is targeting for the NMA, with the LR variant racking up orders from carriers like Air Transat that see it as the best prospect to replace the U.S. firm's out-of-production 757 and the 767 on some trans-Atlantic routes.

Lemay said he's braced for a lag of four to six weeks in the delivery of Air Transat's first LR, scheduled for February, as Airbus grapples with delays prompted by faults afflicting the model's engines. A second jet is due in March but the slippage won't be problematic so long as both are available by the time the peak summer timetable kicks in June, he said.

Not in Running

Air Transat isn't in the market for the NMA -- also dubbed the 797 -- since it's moving to an all-Airbus fleet, Lemay said, with a total of 15 A321 LRs set to allow the retirement of five Boeing 737s, as well as older Airbus A310s. Operating aircraft that all its pilots can fly will help save as much as C$15 million ($12 million), he said.

The executive predicted that trans-Atlantic flying will become increasingly narrow-body dominated as carriers from Norwegian Air Shuttle ASA to IAG SA's Aer Lingus embrace the potential of smaller planes with longer ranges.

The market is vital for Air Transat, he said, generating 90 percent of revenue during the summer lull in travel from Canada to the Caribbean, a flow that's busier in winter when it accounts for 85 percent of sales. With the A321 LR -- and potentially the XLR -- the carrier will have planes perfectly suited to both markets for the first time, Lemay said.

(An earlier version of this story was corrected for the executive's name.)

--With assistance from Benjamin Katz.

To contact the reporter on this story: Christopher Jasper in London at cjasper@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Brendan Case, Tara Patel