Airbus is said to revisit bigger A220 model as Paris Air Show nears

Airbus (OTCPK:EADSY) (OTCPK:EADSF) is once again evaluating the prospect of expanding its A220 lineup with a stretched version of the A220-300, informally dubbed the A220-500, as it seeks to boost sales momentum and attract new airline customers, Bloomberg News reported Sunday.

The initiative comes amid the opening of the Paris Air Show, where the European manufacturer is also hoping to secure fresh orders for its current A220, including a potential deal with AirAsia for up to 100 jets, a source familiar with the discussions said to the news outlet.

The proposed A220-500 would offer increased seating capacity but sacrifice some range, making it less suitable for long-haul routes such as coast-to-coast flights in the United States. However, it would provide a more contemporary alternative to the smaller variants of Airbus’s (OTCPK:EADSF) (OTCPK:EADSY) A320 family and could challenge Boeing’s (NYSE:BA) 737 Max in the lower end of the narrowbody market, where Boeing (NYSE:BA) currently lacks a direct counter.

Commercial hurdles

Despite its technical appeal, the A220 program faces commercial hurdles. The aircraft backlog has declined, and the program remains unprofitable. Airbus (OTCPK:EADSF) (OTCPK:EADSY) recorded a net reduction of 10 orders since early 2024, and the A220 has not secured any new purchases this year, instead losing one through cancellation. As of the end of May, the backlog hovered just below 500 units.

Sources cited by Bloomberg News said Airbus (OTCPK:EADSF) (OTCPK:EADSY) is leaning toward a low-complexity upgrade that retains the existing wing and engine setup. This would streamline development and reduce certification risks, while avoiding costly design changes. Although it would restrict range capabilities, the approach is seen as a practical solution that could be implemented more quickly and economically.

However, no final decision has been made, and the timeline remains uncertain. An Airbus (OTCPK:EADSF) (OTCPK:EADSY) spokesperson said the company continues to invest in the A220 family and is reviewing all options, emphasizing that decisions on future variants are not made until fully confirmed.

Airbus (OTCPK:EADSF) (OTCPK:EADSY) inherited design studies for a third A220 model when it took over the program from Bombardier (OTCQX:BDRBF) (OTCQX:BDRAF) (OTCPK:BOMBF) in 2018. Originally launched as the C-Series, the aircraft struggled to gain commercial traction under Bombardier’s ownership.

Narrowbody marketplace

The potential A220-500 would fill a gap in the narrowbody segment, where demand for next-generation aircraft continues to outpace supply. Both Airbus (OTCPK:EADSF) (OTCPK:EADSY) and Boeing (BA) have largely sold out their A320 and 737 lines into the 2030s, and neither is close to launching a clean-sheet successor.

The longer A220 would likely encounter fewer regulatory obstacles due to design commonality with the A220-300. This configuration may appeal to carriers like Air France-KLM, which operate shorter-haul routes and are less concerned about transcontinental range.

U.S. airlines, on the other hand, might view the limited range as a drawback, given the profitability of long domestic flights. Nevertheless, Airbus (OTCPK:EADSF) (OTCPK:EADSY) could benefit from avoiding a new engine program with Pratt & Whitney (NYSE:RTX) at a time when the engine maker is already dealing with an expensive maintenance crisis involving its GTF line, which has grounded hundreds of jets. A more powerful engine would necessitate significant redesigns of the wing and pylon structures, potentially adding billions in development costs.