The model of an A400M military transport aircraft (R) of European aerospace giant Airbus is pictured during the company's annual press conference in Munich, southern Germany, on February 27, 2015. AFP PHOTO / GUENTER SCHIFFMANN

Airbus Boosts Production of A320 Single-Aisles, Focuses on Fuel Economy

BY :ANDREA ROTHMAN

FEBRUARY 27, 2015

Tom Enders, chairman of European aerospace giant Airbus, gestures as he speaks during his company's annual press conference in Munich, southern Germany, on February 27, 2015. AFP PHOTO / GUENTER SCHIFFMANN

Airbus plans to boost production of its workhorse A320 single-aisle aircraft to 50 a month to meet surging demand for more fuel-efficient airliners.

The increase by the first quarter of 2017 from today’s 42 will help airlines get earlier delivery slots for the A320neo models with new engines that are already sold into the next decade. Airbus disclosed the plans as it announced a 15 percent gain in 2014 profit on higher plane deliveries.

The A320 family, introduced in the late 1980s and assembled at two sites in Europe and one in China, has helped Airbus create a global duopoly with Boeing in the civil aircraft market, which relies predominantly on smaller planes like the A320 and 737.

Airbus’s new production plans are still below targets by Boeing for 52 single-aisle 737s a month by 2018.

“Due to strong demand for single-aisle aircraft we have decided to increase production of our A320 family to 50 aircraft a month from 2017 onwards,” Airbus chief executive Tom Enders said in a statement.

Airbus also announced a drop in production for its wide-body, twin-engine A330 plane, to six a month from early 2016 versus 10 today. Production will climb again as it starts building a more fuel efficient variant with new engines, the A330neo. Airbus confirmed its plan to break even on its A380 superjumbo in 2015.

Earnings at the parent company for 2014 before interest, tax and one-time items rose to 4.07 billion euros ($4.56 billion) from 3.54 billion euros, beating estimates by analysts for 3.84 billion euros. The company took a charge of 551 million euros for penalties related to delays of its A400M military transport. Sales rose 5 percent to 60.7 billion euros amid a proposal for a record dividend of 1.20 euros a share, up 60 percent from 75 cents in 2013.

The European aerospace company, which draws two thirds of sales from its airliner unit, is particularly reliant on its best-selling single-aisle series. In 2014, out of 629 deliveries, 490 were short-haul models, providing the bulk of revenue.

Airbus assembles its A320 and related variants mainly in Hamburg and Toulouse in southern France, with a plant in Tianjin, China, producing four planes monthly. It will be adding four A320neos monthly by 2017 at a new plant in Mobile, Alabama.

It predicts “slightly higher” deliveries and sales this year than last, and reiterated plans to break even with its A380, which has struggled to attract fresh orders. Airbus said it expects a “slight” increase in operating earnings before certain items, with a break-even on cash flow before acquisitions.

Bloomberg

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