B787 Delays Continue to Favor A350

With the expectation of further delays to the B787 as a result of modifications to the wingbox, Airbus are likely to secure additional orders underpinning increasingly strong residual value calculations for the European product. Two years ago the prospects for residual values of the A350 were grim...

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With the expectation of further delays to the B787 as a result of modifications to the wingbox, Airbus are likely to secure additional orders underpinning increasingly strong residual value calculations for the European product.

Two years ago the prospects for residual values of the A350 were grim. Enhancements to an existing design failed to excite the market and more importantly, compete effectively with the B787 which was then securing a record number of orders. The already announced delays to the B787, combined with an extensive backlog, have already swung attention towards the A350. With Airbus promising that the A350 will offer advantages over the B787 not only in terms of size but also technology, operators are becoming increasingly interested in the Airbus product. Further delays to the B787 will only serve to further divert attention.

The wingbox issue, which appears to result of an attempt to reduce weight on a structurally critical part that is now made of composite rather than aluminum, could result in a six month hiatus according to some sources. This, combined with potential problems emanating from flight testing, could see service entry delayed until 2010 compared with the current schedule of first quarter of 2009 and an original date of 2008. The civil service method of artificially inflating the required time to fix a problem would provide Boeing with the opportunity to solve other problems that could emerge though this would not settle well with either the stock market or customers who are already seeking compensation for existing delays. Perhaps more importantly for Boeing, with the service entry dates of the two products converging and the absence of delivery slots until the arrival of the A350, there exists a real possibility that existing orders for the B787 could be changed to the A350.