Airbus Readies Suppliers for Next Step in A320 Ramp Up

Airbus SE has told suppliers to be ready for a ramp up in production of its best-selling A320 narrow-body jet series to as many as 53 a month by the end of next year, people familiar with the matter said.

The number reflects the top end of a range under consideration and no final decision has been taken, according to the people, who asked not to be named discussing a private matter. Airbus is building 40 A320s a month now and has set out plans to go to 43 in the third quarter and 45 by the end of 2021.

The European planemaker is targeting increased production of its best-selling model even as the latest coronavirus spike hits the burgeoning Indian market and European carriers wait to see whether key leisure routes will reopen in time to avoid another lost summer. The plans for 2022 provide an insight into how quickly demand could rebound as vaccinations are rolled out worldwide and infection rates finally subside.

The news is “a positive for both Airbus and its suppliers,” Vertical Research Partners analyst Robert Stallard wrote in a note. “A rate increase of this scale would only be implemented if Airbus was very confident in its customers’ ability and willingness to take the planes, and that appears to be the case.”

A spokesman for Airbus, which slashed jetliner build rates by a third when the coronavirus first hit, said it doesn’t comment on “speculation regarding the longer-term trajectory,” while adding that the market is seen recovering to pre-Covid-19 levels in the 2023 to 2025 time-frame.

The latest output plans are still a far cry from the Toulouse, France-based firm’s pre-pandemic production rate of 60 A320s a month, a figure once slated to reach 63 this year and potentially climb to 70.

Fresh Blow

The manufacturer has already reined in its recovery effort once, stepping back in January from moves to build 47 jets monthly by July as a global surge in the virus dealt a fresh blow to its airline customers.

Chief Executive Officer Guillaume Faury said April 29 that Airbus had yet to determine narrow-body rates beyond this year but faced a “steep ramp-up” to meet required deliveries in 2022 and 2023.

The company’s current thinking seeks to balance uncertainties over the pace of recovering jetliner demand against concerns about being overbooked for 2023 and 2024 given the number of deliveries deferred to those years as a result of the pandemic, one person said.

Rival Boeing Co. plans to increase production of its rival 737 Max, grounded until late last year after two fatal crashes and currently battling engineering issues, to 31 per month by early 2022.

©2021 Bloomberg L.P.

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