HOT

AIR THE MID-SIZED WIDEBODY RACE IN EARLY THIS DECADE 1

Hot Air
The Mid-sized Widebody Race In Early This Decade
Airbus A330-200 HGW versus Boeing 787-8

Analyst: Vinay Bhaskara January 2012

HOT AIR THE MID-SIZED WIDEBODY RACE IN EARLY THIS DECADE 2

Introduction
The Boeing 767 and Airbus A330 families of aircraft are typically the smallest-sized aircraft in the intercontinental fleets of global carriers. With two-class seating capacities of between 200 and 260 seats in typical long-haul configurations and design ranges between 5,990 and 7,250 nautical miles (nm), the Boeing 767-300ER and the Airbus A330-200 form the backbone of global long-haul fleets today, with 623 and 437 examples currently in service, respectively. Both of these aircraft are used over a wide range of routes, from regional international service in Asia to intercontinental flights between Oceania and the US West Coast. These aircraft are most prevalent, however, on transatlantic flights between the European Union (EU) and the United States, replacing the previous generation of Airbus A310, Lockheed L1011s, and Douglas DC-10s that were far more costly to operate. Produced since 1998, the Airbus A330-200 has accrued 573 orders with 441 examples being delivered, and a backlog of 132 planes1. Meanwhile, the Boeing 767-300ER has gained 682 orders since entering service in 1986, with 20 planes yet to be delivered2. However, with the oldest A330-200 turning 14 in 2012, and the oldest 767-300ER turning 26, the question of replacing these fleets is quickly becoming an all-important question. The contenders in the market today are the Airbus A330-200 HGW (high gross weight) and the Boeing 787-8. In this report, we compare the two aircraft, analyse their mission capabilities, and compare their advantages and disadvantages. The aircraft have different capabilities with the A330-200 HGW being able to lift more payload and the 787-8 being able to fly further with a full passenger load. Which of the two aircraft is more optimal for meeting airline requirements for replacing the 767-300ER and current generation A330-200, and how do they compare, is the focus of this study.

The Airbus A330-200 HGW

The latest iteration of Airbus popular A330 series, the Airbus A330200 HGW (high gross weight), entered service in February 2009 with Korean Air. Derived from the Airbus A330-200 platform which was itself a shrink of the Airbus A330-300, this aircraft seats 250 passengers in a typical 2-class long haul configuration, or 290 using a 2-class regional configuration.

1 2

Source: Airbus O&D spreadsheet, November 2011 Source: Boeing O&D custom report, November 2011

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The Airbus A330-200HGW offers a few improvements over the -200 including an increased maximum take-off weight (MTOW) of 5 tonnes (11,000 lbs), allowing the aircraft to carry an extra 3.4 tonnes (7,500 lbs) worth of payload or an extra 300 nautical miles (nm) in range. These improvements increase the range of the aircraft to 7,250 nautical miles (nm) when fully loaded. The high gross weight version of the Airbus A330-200 originates from the initial Airbus A330-300 variant, which was in turn developed from the Airbus A340. As compared to the A330-300, the A330-200 features a common wing with a stronger structure, but a 10 frames shorter fuselage and taller vertical stabiliser to compensate. The A330-200 is a mostly metal aircraft, and utilises the fly-by-wire (FBW) flight control technology first implemented on the Airbus A320.

The Boeing 787-8

The Boeing 787-8 is the initial variant of the new Boeing 787 family of aircraft. Announced in 2003, the Boeing 787 was designed by Boeing as a replacement for the Boeing 767. Entry into service (EIS) was planned for May 2008, however a myriad of delays pushed that date back to October 2011. Typical 2class configurations for long-haul 787s seat about 240 passengers whereas regionally configured aircraft seat about 270. The Boeing 787-8 promises a 20% fuel burn improvement versus the initial Boeing 767300ER, which will allow the aircraft to be flown on routes of up to 8,200 nautical miles (nm). The 787 will be an all-new aircraft, with a unique construction, it is the first aircraft to be made up of more than 50% composite materials, especially carbon fibre reinforced polymer (CFRP). Other new components of the aircraft include its electrical architecture, which replace the traditional bleed-air and hydraulic power systems, as well as the refreshed interior which features 65% larger windows, higher cabin pressure, and LED mood lighting. New engine technology for the 787-8 has been developed by both Rolls-Royce - Trent 1000: derived from Trent 900 that powers the Airbus A380-800 and General Electric - GEnx engine is also used on the Boeing 747-8.

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Comparative Specifications
The Boeing 787-8 and Airbus A330-200 HGW are the smallest wide-body aircraft currently in production. Both aircraft are more capable than the Boeing 767-300ER and oldgeneration Airbus A330-200, which were the backbones for many global airline fleets. The majority of Boeing 767 orders were for the 767-300ER, with the smaller 767-200 and larger 767400 likely to be replaced by narrowbody aircraft and larger variants of the 787 family and A350s respectively. Meanwhile, the Airbus A330 has had its orders split almost right down the middle between the larger -300 and the smaller -200 variants, with the former likely to be replaced by future variants of the Boeing 787 and Airbus A350. The A330-200 HGW is a larger aircraft than the other two, while the Boeing 787 has a longer range. In examining the table below, it appears that the 787-8 supersedes the Airbus A330-200 HGW in most categories. The 787-8 seems to have a significant advantage over the Airbus A330-200 HGW because it provides the greatest improvement in specifications relative to the 767-300ER and Airbus A330-200. Specification Capacity dual class long haul Capacity dual class regional Range in nm Cabin Width (ft.) MTOW (tonnes) MLW (tonnes) OEW (Typicaltonnes) Engines 767-300ER (WL) 225 255 5,990 15.5 186.88 145.15 90.01 PW 400094, GE CF6-80C2, RB211524H A330-200 250 290 6,900 17.25 233 175 119.6 GE CF680E1, PW4000, Trent 700 A330-200 HGW 250 290 7,200 17.25 238 180 119.6 GE CF680E1, PW4000, Trent 700 Boeing 787- Advantage 8 240 A330 270 ~7800 (7650-8200) 18 228 161 110 GE GEnx, Trent 1000 A330 787 787 A330 787 787 A330

HOT AIR THE MID-SIZED WIDEBODY RACE IN EARLY THIS DECADE 5

We gave the 787 the advantages in maximum landing weight (MLW) and operating empty weight (OEW), because a lighter airplane offers lower operating costs and navigation charges, mostly landing fees. We understand the argument that the Airbus products higher weight allows it to carry a larger structural payload which is roughly 2 tonnes more, as well as 15-20 more passengers. In consideration of these factors, we gave the maximum take-off weight (MTOW) advantage to Airbus, while keeping the other two categories in favour of the 787-8. Capacity In typical seating configurations, the 767-300ER is the smallest aircraft, though similar in size to the 787-8. The A330-200 HGW is the largest of the three (by roughly 7%). Thus the A330-200 HGW receives the capacity nod, and is rated to a maximum of 380 passengers. Range Neither the 767-300ER nor the A330-200 HGW can match the range capabilities of the Boeing 787-8. In the United States, the 767-300ER has the range to do almost every transatlantic itinerary imaginable, as well as serve West Coast-Asia flights. The A330-200 HGW can perform all of these functions with an additional range built in, while the 787-8 can serve flights to most of Asia from anywhere in the US. The following charts show competitive range for each aircraft.

767-300ER (WL) A330-200 787-8 A330-200 HGW

Figure 1. From New York John F. Kennedy International Airport

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767-300ER (WL) A330-200 A330-200 HGW 787-8

Figure 2. From London Heathrow International Airport

767-300ER (WL) A330-200 A330-200 HGW 787-8

Figure 3. From Tokyo Narita International Airport

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Comparative Economics
The Boeing 787-8, 767-300ER, and Airbus A330-200 HGW all perform differently on various missions. Generally speaking, the 787-8 has the best seat-mile, as well as aircraft-mile operating economics, followed by the A330-200 HGW, with the 767-300ER bringing up the rear. This pattern is visible over a broad scope of flight segments, and the 787-8s advantage over the other two types generally increases as stage length does. Our independent analysis, using the GEnx-1B engine for the 787, the PW4000 engine for the A330, and the RB211-524H for the 767, provides the following results using the best ceterus peribus comparison that we could develop given the continually evolving nature of the 787-8 for flights of 2,100 and 4,850 nautical miles (nm). It should be noted that the figures for the 787-8 are for aircraft produced after line number LN90, a category which all new orders for the 787-8 would fall under, since LN90 will be the first production example meeting Boeings original operating empty weight (OEW) and airline-specific manufacturers empty weight (MEW) targets3. We utilised US Department of Transportation (DOT) Form 41 data, internal company resources from the original equipment manufacturers (OEMs), public figures released by Boeing and Airbus, as well as other independent analyses to craft these estimates. The comparison is of operating economics (Direct operating cost, DOC = cash operating cost (COC) + capital cost), including fuel cost, airframe maintenance, engine maintenance, crew costs, and landing fees. However, neither capital cost nor the related cost of ownership for the aircraft is included due to their variable nature. European carbon trading fees under the emissions trading scheme (ETS) are specifically excluded, as these will not be globally applicable. 2,100 nm Aircraft Cost Per Seat Mile* Comparison with 767-300ER (WL) -10.4% -5.8% Datum Cost Per Aircraft Mile* $14.75 $16.67 $15.56 Comparison with 767-300ER (WL) per aircraft mile -5.17% +7.13% Datum

787-8 A330-200 HGW 767-300ER

$0.0546 $0.0575 $0.0610

*In constant 2011 USD.

3

Boeing eyes 787 improvements along with production ramp-up, Aspire Aviation, 11th January, 2012. Accessible at http://www.aspireaviation.com/2012/01/11/boeing-eyes-787-improvements-along-with-productionramp-up/ Challenges remain as 787 becomes reality, Aspire Aviation, 3rd October, 2011. Accessible at http://www.aspireaviation.com/2011/10/03/challenges-remain-as-boeing-787-becomes-reality/

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4,850 nm Aircraft 787-8 A330-200 HGW 767-300ER Cost Per Seat Mile* $0.0603 $0.0651 $0.0689 Comparison with 767300ER -12.52% -5.49% Datum Cost Per Aircraft Mile $14.47 $16.28 $15.50 Comparison with 767300ER (WL) per aircraft mile -6.69% +5.01% Datum

*In constant 2011 USD.

Conclusion
The 787-8 is the longest-ranging aircraft in its class, surpassing the range of both the 767300ER and the A330-200 HGW, and for the first time opening up the possibility of a 200-250 seat jet flying routes of up to 6,000 nautical miles or more. The A330-200 HGW remains the stronger aircraft with regards to payload, but the lighter 787 can counter with its superior operating economics. From an economic standpoint, the 787 has a clear-cut, if somewhat less than advertised, advantage over its competitors. A 10%-12% advantage in seat-mile costs can save hundreds of millions of dollars over time. The maintenance costs still may fluctuate significantly, but given the 787s self-healing carbon-fibre body, and heavy utilisation of advanced technologies such as the bleedless air system, the 787 is likely to be substantially cheaper to maintain than the A330. The most important redeeming factor for the A330-200 HGW is that it is available for carriers now, even with a backlog of more than 200 aircraft, Airbus will have plenty of spare production capacity for the A330 until Boeing has delivery positions for the 787-8, the latter is essentially sold out till 2018 or onwards.

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Appendix I. Cost Analysis Between 787-8, A330-200 & 767-300ER (WL)

Aircraft Distance (nm) Flight Time Fuel (US$) Maintenance (US$) Crew Costs (US$) Landing Fees (US$) Trip Cost (US$) Seats Trip Cost/Seat (US$)

787-8 2100 280 min 20183.9 5750 4500 550 30983.9 270 114.7551852

A330-200 2100 301 min 22579.3 7023 4800 600 35002.3 290 120.6975862

767-300ER (WL) 2100 300 min 19851.8 7500 4800 520 32671.8 255 128.1247059

Aircraft Distance (nm) Flight Time Fuel (US$) Maintenance (US$) Crew Costs (US$) Landing Fees (US$) Trip Cost (US$) Seats Trip Cost/Seat (US$)

787-8 4850 619 min 48301.235 12710.13 8600 550 70161.365 240 292.3390208

A330-200 4850 654 min 54194.45 15260 8900 600 78954.45 250 315.8178

767-300ER (WL) 4850 651 min 49494.23 16275 8900 520 75189.23 225 334.1743556

ComparaOve OperaOng Analysis HOT AIR THE MID-SIZED WIDEBODY RACE IN EARLY THIS DECADE 1 0 2,100 nm mission Aspire AviaOon Esimates
0.062 0.061 Cost per Seat Mile (US$) 0.06 0.059 0.058 0.057 0.056 0.055 0.054 14.5 Series3 767- Series1

787-8

A330- 200 Series2 HGW

300ER (WL)

15

15.5 16 Cost per AircraM Mile (US$)

16.5

17

ComparaOve OperaOng Analysis 4,850 nm mission Aspire AviaOon Esimates

0.07 0.069 0.068 Cost per Seat Mile (US$) 0.067 0.066 0.065 0.064 0.063 0.062 0.061 0.06 0.059 14.2 14.4 14.6 14.8 15 15.2 15.4 15.6 Cost per AircraM Mile (US$) 15.8 16 16.2 16.4 Series2 200 Series3 767- Series1 787-8

A330- HGW 300ER (WL)

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Daniel Tsang Founder & Chief Analyst danieltsang@aspireaviation.com Tel: +852 6383 3471

Vinay Bhaskara Analyst & Editor vinay.bhaskara@aspireaviation.com

Hong Kong ~ Singapore http://www.aspireaviation.com

Copyright @ Aspire Aviation 2012. All Rights Reserved. This report cannot be reproduced, in whole or in part, including illustrations, in any form without the written permission of the publisher.