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Airbus Backs Jet Output Target Amid Supplier Concerns

Published on Jan 12 2021 2:10 PM in General Industry tagged: Airbus

Airbus Backs Jet Output Target Amid Supplier Concerns

Airbus has stuck to ambitions for a partial recovery in jet production later this year, amid speculation that it may have to delay the move as Europe faces new coronavirus lockdowns.

Airbus has said that it wants to be in shape to raise benchmark A320-family output by 18% to 47 jets a month by July, but the goal has already slipped to the fourth quarter, according to analysts, with some saying that it could slip further.

"It looks like the rate of 47 is slipping to the right," one supply chain source said.

Another supplier said that the rate is beyond reach for 2021.

Airbus was producing 60 of the jets a month before the spread of COVID-19 grounded airline fleets last year.

Asked about the output plans at a news conference on annual deliveries, Airbus chief executive Guillaume Faury said that current plans point to an increase in the second half of the year, but noted "a lot of uncertainties" because of the coronavirus crisis.

Last month, Airbus chief operating officer Michael Schoellhorn told the Hamburger Abendblatt newspaper that output "could...rise a little later or flatter" than previously anticipated.

An Airbus spokesman said that no decision has been made.

Airbus is planning a virtual briefing with the heads of some its major suppliers in the coming days in a move that is expected to set the manufacturing tone for the coming year, industry sources said.

It is involved in a stand-off with some suppliers who want guaranteed or upfront payments for parts to support any output increase, in case volatile demand falls again. Those companies are in turn receiving similar demands from their own suppliers.

That is making it harder for Airbus to confirm the timing of an increase, sources said, though it is focussing for now on maintaining the flexibility to act whenever needed.

Delaying the planned increase in production to 47 aircraft a month would prolong financial pressure just as Airbus is struggling to reach targets for job reductions, especially at its headquarters in France and in German plants, sources said.

Airbus has extended a deadline for voluntary redundancies as part of a restructuring plan affecting up to 15,000 jobs.

Faury is expected to force significant cuts among executive posts as part of the biggest restructuring in the company's history as it contends with a coronavirus slump in air travel.

Faury said that the restructuring is "making progress, on track".

Stronger Than Expected Deliveries Last Year

Despite renewed lockdowns in Europe, Airbus confirmed its position as the world's largest plane maker with stronger than expected deliveries of 566 jets last year.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.

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