Jetrader

Appraisal: Airbus A350-1000

The A350, as we know it today, is a far cry from the original vision Airbus had for the type. What began as a refresh of the A330 would ultimately become a clean-sheet design.

Initially, Airbus believed that Boeing’s 787 posed little threat to its existing widebody offering, the A330; however, pressure mounted within the market for Airbus to deliver on a clean-sheet design that would go head-to-head with Boeing’s 787. Airbus would eventually deliver with its A350 XWB (Xtra Wide Body) design. Like its competitor, the A350 XWB relies upon composite materials to bolster the type’s efficiency. The A350 XWB is one of the most technologically advanced airliners in service today.

Initially, Airbus offered two variants of the A350 XWB: the A350-900 and A350-1000. Generally, the A350-1000 commands a 7-10% value premium over the -900. Airbus would later introduce an Ultra Long-Range (ULR) variant of its A350-900, which affords operators with a staggering 9,700 NM range. Adoption of the A350-900ULR has been limited and, to date, Singapore Airlines is the only operator of the type. Thus far, the consensus view within the market has been that the additional seating offered by the -1000 is preferred over the added range of the -900ULR.

Since introduction, Airbus has managed to add a couple of inches to the A350 XWB’s cabin width by resculpting the sidewalls. This improvement was introduced in 2022 and has been dubbed the “new production standard,” which allows for either increased comfort or 10 abreast seating (typically a 3-4-3 arrangement).

It is worth noting that the A350 XWB is powered exclusively by the Rolls-Royce Trent XWB engines.

The first A350-900 delivered in the beginning of 2015 to launch customer Qatar Airways. Obviously, these deliveries lagged Boeing’s initial 787 deliveries by over three years. By the time Airbus delivered the first A350 XWB, Boeing had already delivered around 230 787 aircraft. This lag time allowed Boeing to gain solid footing within the next-gen widebody segment.

Focusing in on the A350-1000 variant, as of May 2024, Airbus reported a total of 85 -1000 deliveries, and 214 of the type remained in backlog. Qatar Airways was also the launch customer for the A350-1000 and received its first -1000 in Q1 of 2018.

While the A350-900 generally finds itself pitted against Boeing’s 787, the A350-1000 is positioned to compete with Boeing’s 777X, which has yet to deliver. Boeing has amassed a respectable 481 orders; however, deliveries of the 777X are not expected to begin until 2025, and some have speculated that initial deliveries of the type may slip into 2026.

Today, only eight airlines operate the A350-1000 variant, and the majority of the fleet is operated by only three operators.
At this time, the A350-1000 is exclusively operated by operators within the Eastern Hemisphere; however, the regional demographics of the fleet are forecast to evolve over time. The chart on this page illustrates the forecast regional demographics of the A350-1000 (based upon Airbus’ existing orderbook and assuming all existing orders are fulfilled).

The A350-900 has amassed nearly double the orders of the -1000. However, it is worth mentioning that, to date, in 2024, the A350-1000 has outsold Airbus’ -900. The A350-1000 has seen two early and noteworthy orders this year: In January, U.S.-based Delta Air Lines ordered 20 units, and in March, Korean Air placed an order for 27 aircraft. With an existing presence in the Asia-Pacific, the Delta Order represents a more interesting step change and may aid in the type’s campaign for Western-use of the aircraft type.

Also of note is Airbus’ introduction of the A350F in 2021. Entry into service is expected in 2026 and, to date, Airbus has garnered 55 orders. The A350F is based on the -1000 variant, potentially opening the door for the -1000 to be used for future passenger-to-freighter (P2F) program(s). Boeing’s 777-8F (based on its 777X) is slated for entry into service in 2027. At this time, Boeing does not delineate which of its 777X orders are for the freighter variant; however, a cursory review of press releases since the type’s introduction shows an approximate 53 order backlog. If the 777X were to be delayed further, Airbus could gain significant ground in this segment of the freighter market.

As previously mentioned, the A350 XWB uses the Rolls-Royce Trent XWB engines exclusively. This may prove to be a bane for the type, as it has already cost Airbus a large order from Emirates (~50 units). In late 2023 during the Dubai Airshow, Emirates CEO Tim Clark cited engine reliability issues as the reason for opting for Boeing’s 777X.
When operated in harsher operating environments, the on-wing time for the Trent XWB is greatly reduced. However, Rolls-Royce is reportedly working to resolve these issues and incremental fixes/improvements are anticipated. This will continue to be a watch-item in the near-term as Rolls-Royce works to improve on-wing time for Trent XWB engines.

In wake of the COVID-19 pandemic, values and lease rates for the A350-1000 saw less significant declines than current-gen widebody aircraft — ~8-15%, depending on vintage. Values and lease rates for the type have stabilized since their initial declines observed in the early stages of the pandemic. Overall, the market for next-generation widebody aircraft is strong.

An ongoing replacement cycle (of current-gen aircraft) is expected to drive solid demand within the coming years. In its most recent Air Passenger Monthly Analysis, the International Air Transport Association (IATA) reported that international Revenue Passenger-Kilometers (RPK) grew 15.8% in April. Over the past year, in concert with this recovery in international travel, values for widebody aircraft have continued to show improvement.

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