Why the Launch of Airbus’ New Plane Isn’t Going to Plan

Skift Take

The Airbus A321XLR is due to make its commercial debut in just a few months, but the aircraft has found itself caught in the middle of a major dispute.

There’s been a late change of plan for Airbus’ new plane. The A321XLR is the company’s flagship single-aisle jet and until recently, Aer Lingus was due to fly it before anyone else.

Now, the Irish flag carrier has lost the honor – the first flight is going to Iberia instead.

In aviation circles, laying claim as ‘launch operator’ is coveted. It can raise brand recognition and tell the world you’re a company at the cutting edge. So what went wrong for Aer Lingus? 

The biggest factor is a lengthy pay dispute with its pilot union. Flight crew are reportedly seeking salary increases of around 20%. Aer Lingus has said it will not offer more than 8.5%, a proposal rejected in January.

The Irish Times reports that Aer Lingus and the Irish Airline Pilots’ Association are awaiting a labor court recommendation following hearings that adjourned earlier this month.

The IAG Factor

Earlier this year, Luis Gallego, CEO of Aer Lingus’ parent company IAG, publicly warned that the new aircraft wouldn’t be heading to Dublin if the pilots couldn’t agree to a deal.

IAG is a powerhouse in the European airline industry. It also owns British Airways, Iberia, budget carrier Vueling, and long-haul low-cost operator Level. Having multiple brands under a single parent organization allows IAG flexibility in where, when, and how it invests. 

Put simply, it can place a single order as IAG and fine-tune the specifics later.

In a statement to Skift, IAG said: “Aer Lingus has not been able to give IAG the assurances needed on cost structure to ensure the returns required to invest in its fleet. IAG has decided that the Airbus XLR planned to be assigned to Aer Lingus for delivery in September 2024 will no longer be assigned to Aer Lingus. We will only make fleet investments where it makes commercial sense to do so and where we can generate a return from doing so.”

Aer Lingus did not respond to a request for comment.

Made for Dublin, Bound for Madrid?

Iberia confirmed to Skift that it will be the launch airline for the XLR. Madrid to Boston and Washington D.C. are likely to be the first long-haul routes in the fall. However, ahead of its transatlantic debut, the airline said it will operate the aircraft on “medium-range” flights within Europe.

Speaking last week, Marco Sansavini, Iberia’s new president, said that the delivery plan for the XLR joining the Spanish carrier is being accelerated. 

It is common for airlines to introduce a new plane type on a soft launch basis. This typically includes flying shorter routes to bolster crew familiarization. It also offers the company a chance to iron out any teething issues before the plane flies more complex long-haul services.

The immediate fate of the first plane – which has already been pictured at Airbus’ factory in Aer Lingus colors – is unclear. A speedy Iberia paint job is a possibility, or the maiden aircraft could be leapfrogged by another unit on the production line. 

What Next for IAG’s A321XLRs?

IAG’s annual report shows the group has 14 future deliveries of the XLR and 14 options. When the order was first announced in June 2019, the company said that eight planes would go to Iberia and six to Aer Lingus. 

More recently, it has been less clear with its language.

At IAG’s full-year results presentation in February, the company said it was expecting delivery of the first three XLRs this year – one for Iberia, but the two others had yet to be allocated within the group.

IAG told Skift that no decision has been made yet on future XLR deliveries.

Why the A321XLR Matters to Airlines

The Airbus A321XLR (that’s Xtra-Long Range) is the plane maker’s flagship single-aisle product. It builds upon the hugely successful A320 program, which is already the cornerstone of fleets at carriers including JetBlue, Frontier Airlines, and easyJet.

With an enhanced range of 4,700 nautical miles, Iberia (and ultimately Aer Lingus) will be able to fly from European hubs deeper into the United States using a narrowbody aircraft.

Notably, the XLR has the same unit cost as a more traditional twin-aisle long-haul jet. This allows more profitable network expansion on routes that could not sustain bigger planes.

Other future operators, such as United Airlines and Icelandair, are looking to the XLR to replace aging Boeing 757s, which are more expensive to run and have poorer environmental credentials. 

Navigating Multiple Challenges

The issues at IAG haven’t been the only obstacle for the new plane.

When the project was first announced in 2019, a target of summer 2023 was given for the first delivery. More recently, executives at the European firm said the second quarter of 2024 would be the date of the first handover. In February, CEO Guillaume Faury confirmed that it would be the third quarter of the year before the first airline received the new jet. 

Timeline slips are common for any new plane – even if it’s a variant of an existing design. Airbus’ fairly modest delay pales in comparison with Boeing, which is facing multi-year setbacks to its 737 Max 7 and 10, as well as its 777X program. 

Heightened scrutiny from safety regulators has caused some of the Airbus delay. To squeeze even more flying range out of the same aircraft shell, the company has had to get creative. The XLR features an extra fuel tank, molded into the contours of the central-rear part of the aircraft. 

While this allows the plane to fly up to 15% further, it has concerned safety regulators. Officials highlighted fire risks and lengthier evacuations in the event of an accident. Tweaks to the design and resulting tests to satisfy aviation authorities have taken time.

Despite its issues, the XLR has proved to be a hit with airlines. More than 550 have been ordered by customers around the world. These include big-name carriers such as Qantas and American Airlines, as well as more niche players like VietJet and flynas.

IndiGo Airlines CEO Pieter Elbers recently told Skift about his grand plans to link India and Europe with the new aircraft.

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