European airplane manufacturer Airbus has launched a new assembly plant for its latest jetliner the A350. The A350 assembly factory will produce a new generation of aircraft made of lightweight materials engineered to save carriers fuel costs and allow Airbus to go head-to-head with rival Boeing.
The plane is meant to be Europe's first major contribution to a new generation of aircraft scheduled to drastically decrease fuel consumption by using high-tech materials. The A350 will be made of carbon-composite elements instead of much-heavier aluminum and is designed to seat between 270 – 350 passengers.
According to Airbus officials, the company will start the production cycle immediately, and it has set an ambitious goal of producing 10 planes per month by 2018.
According to Reuters, the A350 was built as a direct response to rival Boeing's 777 and 787 Dreamliner airplanes. It is scheduled take off in 2013 and enter service by the second half of 2014.
High Production Costs Countered by High Demand
Although the market Airbus and Boeing are competing in is worth several hundreds of billions of dollars and will likely upstage the largest jetliners currently on the market, both firms face construction challenges for these innovative aircrafts.
The lightweight carbon-composite materials used to create the Airbus 350 and Boeing 787 may be stronger and lighter than its heavier aluminum counterpart, but it is much costlier to produce.
As a result, neither jet is expected to make a profit for years.
However, with total demand for both the A350 and the 787 Dreamliner expected to be more than 6,000 over the next 20 years, their anticipated arrival is generating new routes designed to bypass crowded airport hubs – possbibly equating to serious profit in the long run.
Key Statistics - World Aerospace & Defense Industry (source: MarketLine)
- From 2006 through 2010, the compound annual growth rate (CAGR) of the global aerospace and defense industry was at nearly 7%, resulting in total revenue of approximately $1.1 trillion in 2010.
- In 2010, the most profitable segment of the global aerospace and defense industry was the defense segment, which had total revenue of over $791 billion - or more than 74% of the total market value.
- From 2010 to 2015 the performance of the market is expected to decline with an anticipated CAGR of 2.5%, driving market value to $1.2 trillion by 2015.