A member of the ground crew prepares an Airbus aircraft on the tarmac before it transports sections of Airbus A320 wings, produced by Airbus Group NV, away from the company’s assembly plant in Broughton, U.K. (Photographer: Paul Thomas/Bloomberg)

Airbus Sees Higher Costs From A320Neo Delays as Gliders Hit 100

(Bloomberg) -- Airbus SE expects higher costs from managing deliveries of its A320neo aircraft that have suffered months of delays and seen scores of jets parked without engines amid glitches at both of its engine providers.

The Toulouse, France-based company has spent February and March coming up with a plan to address a new unexpected issue with engines supplied by Pratt & Whitney at the beginning of the year, head of commercial aircraft Guillaume Faury said in an interview. That’s led to more investment and pressure on working capital as it prepares for as many as 100 so-called “gliders” by the end of this month.

“It’s a challenging situation, that’s very clear,” Faury said on the sidelines of the International Air Transport Association’s annual general meeting in Sydney. “If the engine manufacturers stick to their plans, we will stick to ours or very close.”

The planemaker said at the start of the year that it expects to deliver 800 aircraft this year, but made the forecast before a problem with the knife edge seal component on Pratt’s geared turbo fan engine -- one of two options available on the A320neo. The other choice, CFM International’s Leap turbine, is also contributing to the number of aircraft that have been undelivered.

That’s leading to a very backloaded delivery schedule in the second half of the year, Faury said in a separate briefing with reporters. Airbus has had to cover the costs of placing those aircraft in storage and the reorganization of its production line and supply chain to adjust for the change in schedule.

Airbus is however still studying raising the production rates for the A320 to as high as 70 or 75 aircraft a month by 2020, though Faury cautioned that Safran SA, which owns CFM in a joint venture with General Electric Co., has said it won’t lift output until it has a grip on the current issues.

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