Airbus sets plan to gear up production in show of confidence

Charlotte Ryan

Airbus SE is preparing to ramp up output of its most important jet, the A320neo, next year, in a sign the European planemaker is gaining confidence that a recovery in demand is on the horizon.

While no decision has been made, suppliers have been told to be ready to support a monthly rate of 47 A320neo-family planes per month in the second half of 2021, according to an emailed statement Thursday.

“We plan to maintain the rate 40 up till summer next year and we have asked the supply chain to protect up to rate 47 to be prepared for when the market recovers,” Airbus said.

In this file photo dated Thursday, July 9, 2020, the logo of Airbus group is displayed in Toulouse, south of France.

The optimistic tone suggests that Airbus is comfortable enough with demand that it can maintain deliveries despite a recent round of capacity cuts and order deferrals by major customers. Analysts have been warning that its current production rates may not be sustainable.

“We have done a re-evaluation of the situation after the summer period,” Airbus said. “We have refined the plan for the A320 family programs based on our current view of the market.”

Airbus, based in Toulouse, France, and U.S. rival Boeing Co. have been negotiating intensely with airlines and lessors who found themselves in sudden distress this year when the coronavirus crisis flattened revenue. Last week month Delta Air Lines Inc., a major customer, delayed $5 billion of deliveries until after 2022. AirAsia X Bhd, the biggest customer for the A330neo wide-body, has asked to toss out its entire order book as it seeks to restructure its debts.

Airbus, which is poised to report results next week, said that for now it will keep rates of the A330 and its outgoing A380 super-jumbo steady. It didn’t mention the A350, its most popular long-haul plane.

Before the Covid-19 crisis, Airbus had been producing about 60 A320-series jets per month. It dropped its output target to 40 in April as the virus spread in Europe and the U.S.