Airbus is aiming to produce its A320neo family at a rate of 50 aircraft per month by the end of the year and is telling investors that reaching 2022 delivery targets is still doable.
Getting to the targeted 700 deliveries for the year “is anything but a walk in the park in this environment,” Airbus CFO Dominik Asam told financial analysts at the company’s capital markets day in Toulouse on Sept. 23. The company delivered 380 aircraft from across its range in the first eight months of the year, leaving it with 320 to go in the final four months—an average of 80 aircraft per month.
Commenting on the supplier constraints that Airbus has been facing, CEO Guillaume Faury said, “We think it is manageable.” Progress has been made on the engine side where there are now fewer than 10 aircraft on the ground waiting for powerplants that have yet to be delivered. On the other hand, Faury warned that reaching production targets will “not just be an end-of-the-year battle.” He predicted that “2023 will be another difficult year,” and that’s assuming the supply chain situation normalizes by the middle of the year.
Airbus earlier this year was forced to shift a planned step change to rate 65 by six months to early 2024 because of the problems it has been facing with suppliers. But the manufacturer stuck to its target of ramping up to 75 aircraft produced monthly from the middle of 2025. Faury pointed out that Airbus has agreed on engine delivery volumes with both Pratt & Whitney and CFM International for 2023 and 2024 and is now in discussions on 2025 totals. He made clear that both engine providers have committed to the planned rates in conversations with Airbus, though he conceded that “it is difficult for them.”
A monthly rate of 50 aircraft at the end of this year would represent very fast growth over current levels. In the first eight months of 2022, Airbus delivered an average of 37 A320neo family aircraft monthly to customers. The number was just 33 in August and 35 in July.
As Airbus widens single-aisle production, the aircraft mix is also becoming more challenging. The manufacturer is building many more of the highly complex A321neos, and in the future more of the long-range A321XLR variant. In 2019, the A321neo share of the A320neo family backlog was at 45%. This year it is making up 60% of the firm order backlog. Airbus wants to be industrially capable of moving A320neo production to 70% A321neo by the time it reaches rate 75 in around three years.
Faury also predicted a turnaround in the widebody market. “There will be a moment where widebodies will come back big time and it is probably not far out,” he said. He did not want to forecast when that would translate into further rate increases. Currently the A330neo program is moving from two aircraft to three per month, while the A350 is to increase from five to six at the beginning of 2023. That will likely mean the A350 will return to profitability—Airbus is currently close to break-even at the lower rate. Company sources indicate that a substantial step up in the medium term is being prepared, though the supply chain continues to be an area of concern.
Freighters are another focus area. Faury pointed out that Airbus customers are “very interested” in freighter versions of the A321neo and A330neo. “We are looking at new-built A321neo and A330neo freighters,” Airbus SVP Sales and Marketing Paul Meijers told attendees of the International Society of Transport Aircraft Trading Europe, Middle East and Africa (ISTAT EMEA) conference on Sept. 19.
Faury also stressed the market appeal of a further stretch of the A220. “The potential of the -500 is probably even higher than of the -300. It would take a significant share of the market,” he said. The CEO noted that a -500 would make Airbus “less dependent” on the A320neo family, where the focus is moving up to the A321neo. However, he also made clear that the A220 program would need to become profitable before Airbus would be ready to commit to a stretch. Airbus delivered 30 A220s in the first eight months of the year, an average rate of 3.75 per month, but plans to reach rate 14 by 2025, split between the assembly lines in Mirabel, Canada, and Mobile, Alabama.
Airbus has indicated before that it is looking at the A220-500, which would be a more modern competitor to the Boeing 737-8 than the A320neo is. Technical details such as dimensions, seating capacity and range have not yet been revealed for the possible A220-500.
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