Angus Mackay and Stuart Rubin from ICF provide a market review of the twin-engined Airbus A330 that has proved popular with long haul low cost airlines.

    Developed from the Airbus A300-600 in parallel with the four-engined A340, and originally conceived as a low gross weight small-to-medium regional and medium-haul widebody aircraft intended for high-density operations, the A330-300 has undergone many incremental improvements over its 20-year production history.

    This has resulted in a relatively high gross weight, operationally flexible aircraft serving both intraregional and long-haul markets. The A330-300 is a very popular choice for many Asia-Pacific (APAC) and European carriers.

    In continuous production since 1993, the Airbus A330ceo has an in-service fleet of over 1,257 units, including freighters and military variants, as of early 2018. Although it is a popular medium widebody twin, it has been superseded in the marketplace by newer technology aircraft from Boeing (787) and Airbus (A330neo, A350).

    For many years, outsold by the A330-200, the larger A330-300 has become the preferred member of the A330 family with an in-service passenger aircraft fleet of 684 and a firm order backlog of 72 units as of January 2018.

    Airbus has improved the aircraft with a relatively modest investment and these increases in capability have resulted in increased demand for the type. Through the latter part of the 2000s and early 2010, the aircraft experienced a rise in sales as customers sought interim lift as 787 programme delays increased.

    The A330-300 has eclipsed its natural competitor, the Boeing 777-200, and meets most mission profiles of the longer range 777-200ER.

    Future competition will come from the 300-seat 787-10 (2018 entry into service) and from fraternal competition from the Airbus A350-900 (2015 entry into service, with 144 aircraft currently in service and 531 on order) and the recently-flown A330-900neo (2018 entry into service, with two aircraft currently in service and 218 on order), none of which will gain significant market penetration before the end of the decade.

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    The A330ceo fleet is reasonably well-dispersed geographically but is dominated by operators in the APAC region, where 47 per cent of the aircraft are flown.

    Slightly more than one-quarter of the fleet is in service in Europe, making it the second-highest geographic regional concentration, while 14 per cent of the fleet is in the Africa/Middle East region.

    Within the family variants the A330-300 has significant concentration in the APAC region where nearly 65 per cent of the fleet is in service. Of the 15 largest operators of the A330-300, ten are in APAC, compared to only three in Europe and one in North America.

    The Airbus A330-300 has become a workhorse for major airlines and low cost carriers alike. Low cost carriers of note include AirAsia X, Cebu Pacific, Lion Air and WOW air. Given the long sector lengths and the large passenger volumes, airlines in the APAC region need to transport, these statistics are not surprising.

    However, this concentration does expose the A330-300 to potential challenges should the region suffer an economic downturn in a similar fashion to the 1998 Asian Flu crisis.

    A330ceo market mass, the ratio of aircraft in service and on order to the number of operators/customers, is very good with over 130 operators/customers and nearly 1,340 in service or on order. Aircraft with good market mass tend to be very liquid as the opportunities to transition aircraft from one operator to another are numerous.

    The number of A330ceo series aircraft in storage, a proxy for asset demand, stood at about 6.0 per cent of the current fleet (in-service and stored combined) but it also includes aircraft that may be transitioning to new operators.

    At a variant level, the A330-200 has a significant number of aircraft in storage, nearly 10 per cent, while the share of A330-300s in storage was closer to 2.5 per cent, indicative of strong demand for the latter type.

    Eight of the 17 A330-300 aircraft in storage are earlier vintage A330-300 variants (pre-2000) likely with lower maximum takeoff weights that are operationally less flexible and thus may be less attractive to new passenger operators but may represent an opportunity for the freighter programme.

    With respect to engines, there are some market liquidity issues given that the A330-300 is available with three engine options from Rolls-Royce (Trent 700), General Electric (CF6-80E1), and Pratt & Whitney (PW4000-100).

    The Trent 700 is the market leader with about 57 per cent market share and A330-300s with Trent engines should afford the owners increased remarketing opportunities.

    Investors are increasingly becoming concerned however about the residual values associated with Trent 700 engines at the end of their useful lives given the control exerted over the aftermarket by the Original Equipment Manufacturer (OEM).

    In general terms, the secondary widebody aircraft market like the A330 and 777 markets have been challenged for some time with high reconfiguration costs and slackening demand leading to significantly reduced values and lease rates upon redelivery.

    However, of current generation twin-engine widebodies, the A330 family, and in particular the A330-300, appears to have greater market liquidity than the Boeing 777 family, enjoying a broader operator base and relatively more aircraft returning to service over the past year.

    Visit airbus.com for more information.

    Editor’s Note: The post was originally published in April 2018.