A321LR and A321XLR: The new players for medium-long haul flights

The main aircraft manufacturers (Boeing and Airbus) are subject to the new course of action of the airline business, imposing the need to improve their aircraft models to compete within the different ranges and service segments. This competition is mainly focused on the development of more efficient aircraft that also allows the possibility to unlock new business models resulting on both the coverage of unserved (or inefficiently served) range segments but also on the optimization of the capacity allocated to specific routes (densification – large number of frequencies – vs. increased utilization – higher load factors on strategic slots).

In this sense, Airbus has leveraged the versatility of the A320 family and found a new entry to the medium-long haul flights market with narrow-body aircraft thanks to the extended range of the new A321XLR and its predecessor the A321LR (currently operating). Boeing is currently operating in this niche with the “old” Boeing 757; however, airlines are considering the A321LR and A321XLR as their preferred choice of aircraft for this type of operations (transatlantic flights, intra-continental long-range flows such as N-S corridor in America and the E-W corridor in Europe and Asia, etc.). This decision is based on the enhanced technical features of the new Airbus models whilst Boeing has not positioned yet a competitive updated model with comparable specifications for this segment.

Competitors and technical specifications

The Airbus A321XLR is a single-aisle narrow-body aircraft which will be structured under a typical two-class capacity of 180-200 passengers with a maximum capacity of up to 240 passengers.

Table 1. Aircraft technical specifications (aircraft type; passengers; range)

Source: Airbus and Boeing commercial aircraft data

Nowadays, the other aircraft with such characteristics in terms of capacity and range is the B757. Both the A321LR and the B757 have similar ranges but the A321LR is more efficient in terms of fuel burn (between -15% and -30% of fuel burn per seat compared to its main competitor generation, according to Airbus) and it is a new generation aircraft (B757 first flight was in 1982 and A321LR was in 2018).

The fact that Boeing has not yet developed a new generation aircraft designed to replace the B757 is making the A321LR/XLR not just a competitor but as the natural replacement for the B757 by many airlines such as American Airlines and United Airlines, among others.

As an example, this tendency is reflected in the evolution of the seat offer in transatlantic routes between 2019 and 2022.

Figure 1. A321LR and B757-200 seats offer evolution from USA-EUR routes by year

Source: OAG, ALG analysis

In addition to the afore-described competitive benefits of the A321LR against the B757, the entry into service of the A321XLR will not only increase even further the capacity of the aircraft model (maximum of 244 passengers) but also unlocks an additional range due to its improvement from 3,995 NM of the A321LR to 4,700 NM.

All those factors could contribute to a change in the paradigm of the traditional long-haul market. Routes that were traditionally operated by wide-body aircraft requiring a significant number of passengers to reach the break-even load-factor, could be operated by the A321LR/XLR optimizing the capacity, enhancing profitability of the route and reducing risks for the airline, with a more sustainable operation on top of all these benefits.

Figure 2. Range comparison between narrow-body and wide-body aircraft from London Heathrow (LHR) airport

Source: Airbus and Boeing commercial aircraft specifications

Orders: A321XLR and A321NEO are the preferred choice within the A321 Family

From a worldwide perspective, looking at the backlog of orders and deliveries, Boeing has outstripped Airbus in the wide-body market (~70% orders and deliveries) meanwhile in narrow-body both manufacturers have similar market shares. However, in 2022 Airbus has overtaken Boeing in narrow-body orders and deliveries and wide-body deliveries mainly due to the recent problems with B737 MAX that Boeing has been dealing with.

Airbus capitalized on this opportunity and entered the medium-long market by launching A321XLR for an “unserved” segment due to its range and specifications and boosting A321LR commercial strategy to unseat Boeing B757 from medium-long haul segment (as shown previously, Europe-EE.UU. East Coast could be an example) and take advantage in the narrow-body market due to its better performance.

Figure 3. Worldwide orders/deliveries of Airbus and Boeing

Source: Airbus and Boeing Commercial orders & deliveries

Out of the total A321neo orders, ~15% correspond to the A321LR/XLR versions. Regarding the regions that they will be serving, most of them (~37%) will be delivered to Asian airlines while ~28% and ~24% will serve North American and European airlines respectively.

Figure 4. Total A321neo family orders by region

Source: Airbus Commercial orders & deliveries

As an example, taking a closer look to the European and North American A321LR/XLR markets, fleets and orders are distributed as follows:

Airlines already operating the A321R in transatlantic routes

Table 2. Airlines A321LR/A321XLR aircraft orders and in-service

Source: Centre for aviation (CAPA) data; Airbus commercial orders & deliveries

JetBlue is a worth mentioning case: an American LCC which has started operating long-haul flights recently thanks to the incorporation of the A321LR in the fleet.

Airlines currently operating long-haul routes with WB and having A321LR/XLR orders

Table 3. Airlines – A321XLR aircraft orders and in-service

Source:  Centre for aviation (CAPA) data; Airbus commercial orders & deliveries

Those airlines will be able to add more operational flexibility to their long-haul once the A321LR/XLR is incorporated in their fleets.

Airlines currently NOT operating long-haul routes and having A321LR/XLR orders

Table 4. Airlines – A321XLR aircraft orders and in-service

Source: Centre for aviation (CAPA) data; Airbus commercial orders & deliveries

Finally, those LCCs, once they incorporate the A321XLR to their fleet, will be able to explore the long-haul market. In the case of Frontier, probably in transatlantic routes (following JetBlue’s model) and N-S American corridor. In the case of WizzAir, with transatlantic routes if operated by a European subsidiary or in Asia/Middle East if operated by the UAE subsidiary.

Opportunities: Why are airlines targeting this new segment

From an operational perspective, allocation of an efficient narrow-body aircraft to medium-long haul flights instead of wide-body options could provide multiple opportunities:

(1) Point-to-point in medium-long haul routes

Traditionally, long-haul routes have been operated from hub airports due to the high volume of passengers required to operate these routes with a wide-body aircraft in a cost-effective manner. With the introduction of narrow-body aircraft capable of flying medium-long haul routes, airlines can explore the option of operating from medium-size airports as they no longer require the consolidation of multiple spokes to feed their hubs and operate cost-effectively with appropriate margins.

As a consequence, airlines that are operating from hubs with wide-body aircraft or have to make connections from smaller airports to feed their hubs in order to fly long-haul routes could be challenged from players operating point-to-point medium-long haul routes, cannibalizing their feeding bases and also benefiting from more convenient slots in decongested medium-size airports.

(2) “Profitable seasonality”

The fact of having a narrow-body aircraft in the fleet, capable of operating medium and long-haul routes gives flexibility to the airline to adapt the capacity to the demand, especially in the case of seasonal routes. As an example, routes operated by wide-body aircraft with sufficient demand to operate in a profitable way during peak season, sometimes face lower demand during low season, which is not enough to operate with that wide-body. Availability of the A321LR allows the airline to operate these routes on a sustainable manner, since they require lower load factors to ensure break-even on the segment.

(3) Fleet management – Enhanced cost

Since the A321LR/XLR belong to the Airbus A320 family, the costs associated to aircraft, maintenance, and crew training, can be lowered as a result of the compliance and standardization of parts and procedures for an airline with an optimized fleet.

(4) Emissions reduction – Carbon footprint, NOx and SOx emissions

According to Airbus infographic, A321XLR emits 30% less CO2 per seat than the previous generation of their competitor aircraft.

According to InsightIQ Carbon Emissions Calculator, the Airbus A321LR operated from LHR (London Heathrow) to JFK (New York) by JetBlue emitted -19% CO2 emissions compared to Boeing 757-200 operating a similar sector length. In addition, A321LR offers better enhancements in emissions against its competitor also as a result of a denser seat configuration.

(5) New opportunity for LCCs to operate medium-long haul routes

These aircraft could facilitate the option for LCCs (low-cost carriers) to operate medium-long haul flights without the need to use larger aircraft that are not aligned with the standards of a low-cost airline, mainly in terms of operability and costs. Some LCCs have tried to enter the medium-long haul market but in most of the cases, routes needed to be operated with wide-body aircraft (e.g. Norwegian, which tried to enter into the long-medium haul market by leasing a B787 fleet) but it did not worked due to the high cost of wide body aircraft operations.

Now, with the new A321LR and A321XLR, this business model could provide more sustainable economic results due to the reduction of fuel consumption and the possibility to reduce fares because of lower break-even load-factor.

However, it is important to consider that this “business model” is yet to be tested with narrow-body aircraft and that previous attempts with wide-body aircraft and low-cost model did not work.

(6) De-risking network development and route testing

For an airline, opening a new route involves a number of risks associated with testing whether or not the route is profitable for a certain period of time.

To address on whether if a new route is profitable, it is necessary to prove that it reaches the minimum load-factor, which usually takes some time based on the passenger awareness and destination consolidation derived from the interest of the traveller base on each particular destination.

Routes operated with wide-body aircraft require higher number of passengers to achieve profitable load factors and, therefore, evaluation cycles for a new route are longer until desired load factors are achieved (sometimes requiring aggressive price discounts that may jeopardize profitability of the route itself).

However, a narrow-body aircraft does not require as many passengers to reach its break-even load-factor, so the evaluation of a new destination is less risky and could provide faster results with lower absolute volumes of demand on the route.

(7) Lower ticket fares– Cost and fuel efficiency

On the one hand, aircraft price is one of the factors where narrow-body aircraft outperform their counterparty wide-body alternatives for medium-long haul routes. Airlines operating A321XLR or A321LR could then establish lower fares for the same route operated with a wide body. This is possible not only in the acquisition/lease cost, but also to all the operating costs associated to their lower MTOW. Airport fees are commonly based on maximum take-off weight (MTOW), the class of flight and the acoustic rating, therefore, lower MTOWs derive on lower airport fees and, as a result, lower ticket prices for the passenger.

On the other hand, Airbus A321XLR and A321LR are more efficient in terms of fuel consumption than their direct competitor, Boeing B757. Being the fuel one of the main cost streams for an airline, reduced fuel consumption would allow for reduced fares, making the routes operated by this aircraft more competitive.

Figure 5. Oil and fuel CASM/Stage length comparative by aircraft

Source: U.S. Department of Transportation Data; ALG Analysis

Qantas airline case: Opening to Southeast Asia

Qantas is one of the airlines that has confirmed more A321XLR orders (~56 orders). Its actual fleet is composed by Boeing 737 for short/medium-haul flights and A330 and Boeing 787 for long-haul routes.

Table 5. Qantas’ aircraft orders; in-service and inactive

Source: Centre for aviation (CAPA) data; Airbus and Boeing commercial orders & deliveries

Sydney Kingsford Smith Airport (SYD) is the main hub of the airline and from there they operate to multiple destinations including domestic, Africa, Asia Pacific, Europe and North America destinations. Currently, the B737 which is the only narrow-body aircraft of the fleet is mostly operated in the domestic network and New Zealand while most of the international destinations are served with wide-body aircraft.

From the point of view of the A321XLR, routes from SYD to Southeast Asia (Malaysia, Philippines, Thailand, etc.) are of particular interest. Currently those routes are being operated by wide-body aircraft as they are the only aircraft with enough range to get to those destinations.

Figure 6. Range comparison between B737-800 and A321XLR from SYD

Source: AIRBUS and Boeing commercial aircraft specifications

However, with the addition of the A321XLR to the fleet, Qantas will be able to operate in the Asian market with a narrow-body aircraft, not only to the already served markets, but as well explore new opportunities such as China or Japan with less associated risk.

In addition, the A321XLR will add flexibility to the fleet, allowing Qantas to operate high-demand domestic routes and unlocking Qantas strategy for international medium-long haul routes between peak and low periods. Furthermore, A321XLR will make profitability of those routes easier during low seasons and the possibility to test new routes reducing risks.

Summary advantages and disadvantages: New generation narrow body vs. wide body for medium long haul


About the authors
Alejandro López Fernández holds a MSc. in Aeronautical & Airport Management and is a Business Analyst at ALG alopezf@alg-global.com
Carlos Cuenca holds a MSc. in Aeronautical Engineering and a Commercial Pilot License and is a Consultant at ALG ccuencar@alg-global.com
Sergio Rodríguez Sánchez holds a MSc. in Aeronautical Engineering and a Postgraduate in Business Administration and is an Engagement Manager at ALG sjrodriguez@alg-global.com

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