(WN):-Airbus expects to triple the number of
Airbus A320neo-family deliveries in 2017, Airbus Commercial Aircraft President
Fabrice Bregier said.
“Some maturity issues remain,” Bregier
conceded during the Airbus 2016 financial results presentation on Feb. 22.
“Both engine suppliers are committed to deliver in line with customer
expectations,” the company stated. “Challenges remain with the A320neo ramp-up
and delivery profile, which is expected to be back-loaded in 2017.”
Airbus delivered 68 A320neos in 2016, and
incurred significant delays and customer turmoil. That was mainly because of
development and installation for Pratt & Whitney PW1100G engine fixes.
Qatar Airways, the original launch customer, is among other airlines that have
refused to take delivery of A320neos, and are now negotiating with Airbus to
switch to the larger A321neo.
Bregier said that, in his view, getting
A320neo production up to 60 aircraft a month in mid-2019 is “the only challenge
on the single-aisle side,” refuting claims that the industry may be heading
into an overcapacity situation.
The A330neo’s first flight is planned at the
end of the first half of 2017, according to Bregier. The first aircraft is to
be delivered in spring to TAP Portugal. Bregier reiterated that Airbus plans to
make the transition from the current version of the aircraft to the new variant
at a rate of 6–7 aircraft per month. Airbus Commercial’s underlying profit for
2016 was negatively affected by the lower A330 production rate, which is one of
the highest margin civil programs.
Airbus is “pretty much covered,” as far as
filling the planned production of the A380 in 2019, Bregier said. Following 28
deliveries in 2016, the manufacturer is reducing production to just 12 aircraft
per year from 2017. That is a level it wants to sustain for several years,
hoping that demand will ultimately pick up.
Airbus is in the middle of
identifying further cost-cutting possibilities that would help it limit the
losses in the A380 program. Among other things, one of the hangars at the
Hamburg Finkenwerder Airport plant is now rededicated to A320neo production.
“I believe there is a long-term future for
this aircraft,” Bregier stressed. But he also admitted that “we need additional
orders” to fill production slots, even at the lower rate of 12 per year.
Emirates recently deferred deliveries of six
A380s due to arrive in 2017 by one year, and deferred a further six aircraft
from 2017 to 2018. The move meant a sharper-than-planned reduction in output
this year, but helped fill open slots later. Sustaining production at the
current level would either require additional orders, and likely latest within
the next year or persuading Emirates to pull some of the deliveries now planned
for later forward.
Given the current state of the market, which
Bregier described as “pretty small,” and the troubles that Emirates is going
through in its core markets, both targets are highly ambitious.
Airbus Commercial revenues were up 7% to
€49.2 billion ($51.9 billion), but the reported operating profit for the
division dropped by 33% and reached only €1.5 billion. Research and development
spending decreased by 21% as the A350 efforts were wound down.
But there were some significant negative
effects. Airbus had already booked a €385 million A350 charge in the first half
of 2016. It also saw margin pressure from “transition pricing” mainly in the
A320 program and the ramp-up costs for both the A320neo and the A350.
Groupwide, Airbus suffered a €930 million
negative impact due to a dollar predelivery-payment mismatch and a revaluation
of its balance sheet. It booked a €182 million charge for restructuring efforts
as it merges group structures with Airbus Commercial, a plan that leads to the
cutting of more than 1,000 jobs.
Airbus Commercial plans to deliver more than
700 aircraft this year compared to 688 in 2016. The company delivered 25
aircraft in January. Among them were five A320s; two A320neos; 14 A321s; three
A330-300s; and one A350-900.
0 Comments