Airbus mulls raising output of jet built in Alabama as demand soars

Airbus mulls raising output of jet built in Alabama as demand soars
With more airlines around the world placing large orders for the A320 family of airplanes, Airbus is considering expanding its production capability in sites where the plane is made, like Alabama. (Airbus)

Airbus SE is considering increasing production rates for its best-selling single-aisle A320 jetliners, as airlines around the world place orders for hundreds of planes to meet surging demand for air travel.

“The success of the products is forcing us to look at any opportunities we can have to improve the rate,” Eric Schulz, Airbus’s new sales chief, said at the Singapore Airshow on Tuesday. “We have not come to any conclusion yet. But this is something we are looking at very, very closely.”

Airlines, particularly in Asia, are scrambling to secure aircraft to support the rapid expansion in emerging markets, including China and India, where more and more people are taking to the skies for the first time. The demand has boosted orders for both Airbus’s A320 family of single-aisles as well as Boeing Co.’s 737 — models that form the backbone for short-haul travel.

Delta is one of several airlines ordering the Airbus A320 airplanes. (Airbus)

Airbus said previously it aims to produce 60 A320s a month by mid-2019, up from an average of 50 in the first quarter of last year, across production lines in Mobile, France, Germany and China. Outgoing Chief Operating Officer Fabrice Bregier indicated last month that there is enough demand for Airbus to be producing as many as 70 of the aircraft a month, adding that any decision would be left to his successor.

Output hurdles

Production hurdles that have hindered deliveries of engines for both Airbus and Boeing narrow-bodies have leveled out in recent months, with Schulz saying he was “confident” that the European manufacturer’s supply chain would be able to cope with a higher target. CFM, a joint venture between General Electric Co. and Safran SA, said in January it had been approached by each planemaker about reaching a rate of 70 planes a month.

Tight aircraft availability is already hindering deals, including for a possible order of 50 narrow-bodies from India’s Vistara, sources said on Monday. The airline may have to agree to lease some aircraft to bridge the time until it can get new jets off Airbus’s production line.

Boeing’s 737 Max is available for delivery only after 2020, the company’s senior vice president for sales in Asia and India, Dinesh Keskar said. The company has already indicated that rates on its narrow-bodies will reach 57 jets a month this year.

Asia Pacific is likely to have 3.5 billion airline passengers by 2036, more than doubling the forecast for North America and Europe combined, according to estimates by the International Air Transport Association.

Airbus’s Schulz was making his first appearance as sales chief, succeeding industry legend John Leahy, who secured aircraft orders worth more than $1 trillion during his decades-long tenure. Leahy has said he intends to stay on at Airbus to help with the transition.

(With assistance from Anurag Kotoky and Benjamin Katz. Contact the reporters at [email protected] and [email protected].)

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