2023-06-24 21:17:50
This week took place at Le Bourget airport the Paris Air Show 2023the first post-pandemic edition of the most important event in the global aerospace industry.
In this context, we had the opportunity to talk with Arturo Barreira, President of Airbus for Latin America and the Caribbeanon different topics of the region.
Aviacionline (AL): We start with the A220, an aircraft that, due to its capacity, seems to have the ideal size for Latin America, but they have not yet sold a single unit [ahí]. Is there a specific reason?
Arturo Barreira (AB): The thing is this, I think Airbus has been extremely successful with the A320 family in the region.
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The A220, designed from the ground up with the latest technology, offers comfort on the same level as the A320 family, setting a standard in the market. It has its space for those routes between 100 and 150 seats. We see that many of our customers started with the A319, have migrated to the A320 and A321 and have been very successful. And we think that for this niche of 150 seats there is no better plane than the A220 for its comfort, so we think that we have opportunities in the region with several clients for the model to be successful.
AL: But they haven’t sold any yet. Do you think they will place some units with operators in Latin America in the coming years?
AB: Yes, as I was saying, I think it’s the ideal aircraft, so it’s a matter of time before we penetrate the Latin American market with the A220.
AL: Are you considering new operators or those already on the Airbus platform, like the A321?
AB: Not necessarily, we talk to all customers in Latin America, about our entire range of aircraft. They may be operators that operate Airbus aircraft or not, but there is no difference for the A220 whether its new customers are Airbus operators or not, simply with those that our families already have there is more relationship and proximity.
AL: Many of the efforts to increase volume come from the success of the A321 in Latin America with low-cost airlines. Do you think that trend of new orders for larger narrow-body aircraft will continue in the coming years in Latin America or will it level off?
AB: The A321 is definitely the most competitive single-aisle aircraft on the market in terms of unit costs, and there has been a trend in recent years to become more efficient to that extent, which is why the success of the A321 has become so relevant. We are not going to say that all the planes we are going to have are A321, there are going to be companies that need to have a mix because not all the sizes are the same size, but what we do see is that, for example, in the case of low-cost carriers, their focus in an increasing percentage is the A321.
AL: Does that mean the momentum is going to continue?
AB: Yes, definitely. The A321 is the market leader.
AL: The A319neo, have you sold any units in Latin America?
AB: The A319ceo is an aircraft that, due to its performance and the conditions of the hot & high market and those of the time (we sold many in a two-class configuration of around 125 seats), as it was a natural replacement for the previous aircraft that were operating, like the MD or 737, because it was much more technological. Also then, the airlines were more focused on the cost per trip than on the unit cost. But we saw that with the A320neo you can have the same hot & high performance and range or better, so many of our customers made that change from A319ceo to A320neo.
AL: So you don’t think that in Latin America they will return to the A319neo?
AB: We see that there is less intention to go to planes that are better in cost per trip, when the A320neo is capable of giving you the same performance with lower unit cost.
AL: There is still a long way to go before the complete replacement of the CEOs, how do you plan to face that challenge if you lack production capacity?
AB: In Latin America, we are going to need more than 2,400 aircraft in the next 20 years. 40-45% is aging fleet replacement and the rest is growth. We see potential for not only replacement of these aging fleets, but also growth with new aircraft.
AL: But with the lack of production capacity, the prices of the planes go up. In a region with less purchasing power like Latin America, aren’t you worried that prices or financing costs [de aviones] grow too big?
AB: In Latin America, the growth potential is important for several reasons. One, the number of trips per capita is very low and there are no travel alternatives, there are practically no trains, it is not like in Europe where there can be substitutes for the plane for certain routes. On the other hand, there are in some countries important geographical accidents. We believe that all this will continue to stimulate the market to reach higher levels of per capita travel.
Therefore, the price of the aircraft is not the only factor to consider. Today our entire line, from the A220 to the A350 are 25% more efficient in fuel consumption than current aircraft, and that cost can represent up to 40% in the structure of an airline.
AL: How do you see the performance of Pratt & Whitney GTF engines in Latin America vs the rest of the world?
AB: The GTF engine is giving its expectations in fuel consumption. Indeed there are issues to improve, but it is the platform that makes the A320 a winning family.
AL: The A330neo seems to be picking up speed on orders. But even though it’s your smallest widebody, it still hasn’t sold much in Latin America, what are your perspectives on that?
AB: The A330 is the most successful widebody family with more than 1,500 aircraft in operation. We see that there is a wave of replacements for the A330-200 and -300 that were very successful in the region, so we know that the future of the A330neo is going to be important here.
Today we have Azul, which is the first operator of the A330neo in Latin America and we think we have a lot of potential to continue growing. We have also just won a new A330ceo operator with Boliviana de Aviación, so we remain very optimistic about the potential of the A330 in Latin America.
Certainly not a region of widebodies. More than 90% that operate are single-aisle, and of these, 60% are from the A320 family.
AL: And what expectations do you have regarding the A350? Because it seems too big for Latin America…. Are you working hard to position it or are you focusing more with the A330neo?
AB: And this is horses for courses, No? There are planes that are appropriate for certain situations, clients and environments and others that are not. It depends on the volume, the position, the performance, etc., so it can be said that for certain campaigns this aircraft is more appropriate than another.
It is true that in Latin America widebodies are few (it is the region with the lowest proportion), and they are also the smallest. But for example we now have a couple of A350s operating with Azul right here in Paris, and they are very happy with the performance of the plane on the route.
The A350 is the latest widebody ever developed, and it has all the technology, performance and economics that make it very competitive.
AL: And between the A330 and the A350, which one has more future in Latin America in terms of sales?
AB: Surely in Latin America the smaller widebodies have more future than the big ones because historically there has been this trend, so I think that in the short term the A330neo has more potential, but the A350 is an airplane for those high-density routes, especially from Brazil where on top they can carry 20 tons of cargo.
Airbus in Latin America and the Caribbean
According to the latest Global Market Forecast (GMF) that Airbus had presented at the end of 2022, passenger traffic flying from origin to destination (O&D) in Latin America will increase in the next 20 years by a 3.7% per year, doubling in the next 20 years. Domestic traffic will grow at a faster rate, 4.0 percent annually, while intra-Latin America and the Caribbean traffic will grow 3.2 percent.
It is anticipated that 38,000 new pilots and 38,000 technicians will need to be trained over the next 20 years in Latin America, representing service revenues of $13 billion in 2041.
In Latin America and the Caribbean, Airbus has sold more than 1,200 aircraft and has more than 500 pending delivery. Around 60% of the fleet in service is Airbus after capturing 70% of net orders in the region since 1994.
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