Tuesday, March 21, 2023

Airbus turns profit, plans new jet assembly line in Alabama

Airbus said on Wednesday its profit had tripled to 1.22 billion euros ($1.28 billion) in the first three months of 2022, boosting aircraft deliveries as airlines recover from the worst of the pandemic.

Airbus said it plans to accelerate production of its A320 family of planes that compete with the Boeing 737 to 75 per month by 2025. To hit that rate, Toulouse, France-based Airbus will build a second final assembly line at its plant in Mobile, Alabama, CEO Guillaume Faury told reporters.

The ramp-up in A320 production builds on the current Airbus goal of producing 65 A320s a month by mid-2023. The company expects to take advantage of the strong demand for short and medium-range aircraft. Boeing is trying to churn out 737 MAX jets as well, but is only producing 30 a month.

Richard Aboulafia, an analyst at Consultant Aerodynamic Advisory, said Airbus’ aggressive plans should worry the European giant’s rival, Chicago-based Boeing Co.

“The market for single-aisle jets is extremely strong, and the A321neo is doing particularly well,” Aboulafia said. He added that Airbus aims to capture 70% of that market, leaving only 30% for Boeing, “and they can just get there.”

While it is moving forward with ambitious production plans, Airbus had a setback in building a new aircraft, the A321XLR. Airbus now expects the plane to start carrying passengers in early 2024, and not as late as 2023. Airbus has faced more difficulty than ever to meet the certification requirements set by Europe’s aviation regulator.

The market for “narrow” aircraft such as the A320 and 737 families is stronger than demand for larger, two-aisle “widebody” aircraft, which are mostly for long-haul international flights – a segment of the travel market that has been slow to recover. Used to be .

Some analysts question whether the supply chain is strong enough to allow Airbus to meet production targets. Airbus executives said on a call with analysts that suppliers have assured the company they can produce the parts needed.

However, Airbus said Russia’s invasion of Ukraine and the resulting embargo on Russian imports increased the company’s risk for supply-chain disruptions. Before sanctions, the company used titanium from Russia in aircraft parts.

In the first quarter, Airbus delivered 142 airline planes, compared to 125 a year ago. Revenue rose 15% to 12 billion euros ($12.645 billion) from a year earlier.

The company stood by its goal of delivering 720 airliners this year and generating 5.5 billion euros ($5.8 billion) in adjusted profit before taxes, even due to the “complex geopolitical and economic environment”. With increasing risks, Fauri said.


Nation World News Desk
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