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By Tim Hepher and Cyril Altmeyer
TOULOUSE, June 13 Airbus mapped out a potential
revamp of its A330 jet, but vowed not to let the estimated $2
billion investment divert it from improving profits at Europe's
largest aerospace group.
Fabrice Bregier, chief executive of the flagship planemaking
unit of Airbus Group, said the company would decide
whether or not to launch a re-engined version of its most
profitable wide-body jet before the end of the year.
"We are studying it. We have many customers telling us 'this
aircraft is excellent, please try to also reduce the fuel burn
with new engines'," Bregier told reporters.
"So we are looking at that, we are not rushing. We will take
the decision this year. It's not limited to putting new engines
on; it's more complicated than that."
Airbus faces a drop in orders for the 20-year-old A330 from
2016 as attention switches to the newer Boeing 787, but appears
progressively more confident about being able to preserve its
wide-body 'cash cow' with improvements in fuel efficiency.
The move depends on a jigsaw of decisions including the
outcome of talks with engine manufacturers General Electric
and Rolls-Royce and a debate about whether the
market is big enough to support more than one choice of engine.
It must also weigh the fuel savings provided by newer - but
larger - engines against their increased weight and drag.
Airbus says it can compete with the newer plane because of
factors such as cheaper maintenance and a lower price for the
A330 and has clashed with Boeing over which plane is lighter.
It said strong sales had surprised even its own experts.
"The 787 promised the world an awful lot but in spite of all
the promises it made, airlines have found that the A330 still
has a lot to deliver," said Executive Vice President Kiran Rao.
Boeing has dismissed the A330 revamp as a distraction from
the 787's innovations but has pledged to "react" in a sign that
it may be tempted to shift its pricing strategy.
Airbus insisted it was looking at more than a brief stopgap.
"I wouldn't be interested in doing a short term programme
for only 4-5 years; it has got to be an aircraft that would be
powerful enough in the market place until the end of the next
decade," said Executive Vice President Programmes Tom Williams.
The A330 review comes as Airbus looks beyond the entry into
service of its brand-new A350, which it expects in December as
scheduled, to the production ramp-up needed to reach a
longer-term target of making the jet profitable by 2019.
Such plans, calling for a rapid increase in output, have
little margin for error and can quickly drive up costs.
Bregier, who has made avoiding the delays and cost overruns
that beset the rival Boeing 787 Dreamliner his chief
priority, said the A350 would prove itself financially and
downplayed the impact of a major order cancellation this week.
"At the end of the day, we are looking at profitability,"
"We believe that at the end of the decade we will have not
only the A320, the A330, but also the A350 very profitable. On
the A380 our goal is to break even. If we have that, the
financial challenges that you know for Airbus will be met."
Some analysts have expressed concerns over the strategy for
the aircraft after Emirates cancelled 70 airplanes.
Rating agency Moody's said the cancellation was "credit
negative" for Airbus Group and "credit positive" for Boeing.
Bregier meanwhile held out the prospect that Airbus would
continue to increase production of smaller narrowbody
A320-family jets if the market called for it.
Airbus and Boeing are producing narrowbody jets at record
rates and have suggested they could go higher from around 2018.
"There is no industrial limit. Conversely, I don't want to
build extra capacity and not be able to make the best use of my
cash," Bregier said during an annual media seminar.
Airbus said it had found signs of fatigue on fewer than 10
percent of doors inspected on the A380 after a number of reports
of noise, but that there was no immediate safety issue.
On Jan 4, a Singapore Airlines A380 carrying 494
people made an emergency landing in Baku, Azerbaijan, after
problems with the door seal led to oxygen masks being deployed.
(Editing by Geert de Clercq)