Airbus Weighs Further Delay in A350 Ramp-Up on Russia War, Qatar Legal Fight

(Bloomberg) -- Airbus SE is weighing a further delay in its production plan for A350 widebody jets after sanctions on Russia and a legal fight with Qatar Airways weakened the outlook for deliveries, according to people familiar with the matter. 

A goal of building six A350s a month by early 2023, which had been reiterated as recently as February, may now slide to the end of that year, said the people, who asked not to be named because the plans haven’t been set.

The ramp-up had already been slowed by six months, with Airbus originally aiming to start accelerating from the current five planes a month this fall.

Airbus continues to expect to increase the A350 production rate to about six in 2023, according to a spokesman -- removing the “early 2023” guidance.

The shares fell as much as 2.7% after the Bloomberg report, and traded 0.7% lower as of Monday’s close.

Airbus had already been contending with a slower return of long-haul travel when the Russian invasion of Ukraine dealt another blow to demand for large aircraft.

Sanctions bar the Toulouse, France-based manufacturer from delivering A350s to Russian customer Aeroflot PJSC, while a legal dispute with Qatar Airways over surface-quality issues has cast doubt over further deliveries to the Gulf carrier, one of the biggest customers for the model. 

Legal Battle

Airbus has canceled a third A350 delivery to Qatar Airways, according to a separate person familiar with the matter, while the airline’s compensation claim in an ongoing legal battle has topped $1 billion, up from $700 million previously.

The spokesman confirmed the planemaker is on its way to increasing the production rate of A330-family jets to nearly three aircraft per month by the end of 2022, as planned. The current rate for the smaller widebody is about two a month.

Airbus has 13 A350 deliveries outstanding for Aeroflot, and had 23 of the model due for delivery to Qatar Airways before the dispute escalated to the courts. 

The A350 production increase could still occur in early 2023 if either of the two issues are resolved, one of the people said.

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