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This article first appeared in The Edge Financial Daily on November 10, 2017

TOULOUSE (France): Airbus SAS will hand over the first of six Airbus A350-900s to Air Lease Corp, to be operated by Malaysia Airlines Bhd by the end of this month, said Airbus head of messaging Borna Vrdoljak.

“The A350 is now in the final stage of completion,” he told Malaysian journalists during an A350 tour here on Wednesday.

The smaller but fuel-efficient A350s — which will see Malaysia Airlines debut the first A350 with a first-class cabin — will take over the national carrier’s daily Kuala Lumpur-London service from the super-jumbo A380s, which will be hived off to a new subsidiary to serve the carrier’s haj and Umrah market.

Vrdoljak also said Malaysia Airlines is in discussions with Airbus for more wide-body aircraft, but declined to elaborate.

Amid the popularity for Airbus’ smaller aircraft, Vrdoljak said the European plane-maker remains confident about the future of the A380, which is the world’s largest passenger plane, on the back of growing passenger demand.

“Why? It’s simple. [Today,] 90% of traffic goes through under 100 airports around the world. People are still moving to the big cities and these big cities are still growing. Airports like London’s Heathrow Airport are struggling to support the growth [due to slot constraints].

“When you have slot constraints, the best way to grow your market profitably is with the A380s. While we have reduced production to 80 aircraft per month going forward, but sales will come. [Our study shows] 60% of passengers will go out of their way to fly the A380,” he added.

Last Thursday, Singapore Airlines Ltd (SIA) — one of the A380’s launch customers — unveiled an all-new cabin that will be installed on its existing fleet of the double-decker super-jumbos.

“The A380s have been in service for a number of years now. [On its part,] it was time for SIA to revamp its cabins,” said Vrdoljak.

“We see so many airlines with so many challenges, we have decided to innovate in the cabins, in areas where normally we are not supposed to touch [because] the airlines do that themselves. This is where we are trying to help push the industry forward to make better utilisation of the aircraft, which are highly valued assets,” he added.

As of Sept 30, 2017, Airbus’ overall backlog of jetliners stood at 6,691 worth €1.06 trillion (RM5.19 trillion), which will keep it busy for the next 10 years. “This year, we are targeting to deliver around 700 aircraft,” added Vrdoljak.

On prospects, Airbus expects the Asia-Pacific region to continue to lead demand for new aircraft over the next 20 years.

“For the next 20 years it will continue to grow faster than North America and Europe. In Asia-Pacific, the Malaysian market is the most important after China and India,” said Vrdoljak.

According to Airbus, the Asia-Pacific region is expected to see an annual increase in passenger traffic of 5.6%, which would contribute to a requirement for some 12,800 new aircraft valued at US$2 trillion (RM8.44 trillion).

Meanwhile, Airbus aircraft interiors marketing director Corrin Higgs said the plane-maker is seeing a trend towards a higher number of cabin classes in each aircraft configuration.

“The premium-economy class, for example, is becoming more and more popular among our airline customers. These premium-economy class passengers are typically independent business travellers, business travellers whose corporate policy doesn’t allow them business-class fares, retirees or older adults travelling without their families who they want to spend a little more money to be a bit more comfortable. So, the average number of cabin classes that we fit in our aircraft is slowly increasing because it makes sense to have more choices and more price points.

“A typical two-class aircraft is economy and business, with the business-class ticket typically four or five times the price of economy. Obviously, there is a lot of missed revenue opportunities from those people who could have spent in between. That’s why there is an incentive to increase the segmentation,” Higgs added.

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