Airbus CEO sticks to A320 ramp-up plans despite supply woes

Airbus SE is confident its global supplier base can overcome pandemic-induced pressures and boost output for the company’s workhorse A320 aircraft family despite the “unprecedented” labor and materials strains currently complicating that effort, Chief Executive Officer Guillaume Faury said.

In an interview Sunday with Bloomberg News, Faury reaffirmed the company’s plan to boost A320 output from 40 per month today to 64 a month in 2023, and said Airbus remains interested in potentially reaching 75 per month around mid-decade. It’s essential the planemaker’s vast supply chain have those ambitious, longer-term targets in mind as they manage through the current turmoil, he said.

“That anticipation is required for the supply chain to do the right things because we’re in an unprecedented situation in terms of tension in the supply chain. And we need to start the ramp-up,” said Faury, who’s in Boston for a global aviation summit hosted by the International Air Transport Association.

Airbus suppliers have been hit by raw material shortages, surging logistics costs and labor deficiencies. The challenges are broad, versus the critical shortage of semiconductors that’s idled automobile assembly lines from Detroit to Tokyo, for example, Faury said. 

Despite the issues, Airbus recently reaffirmed its ramp-up plans to the supply chain, the CEO said. The company has sent teams to supplier locations to help sort out problems, among other steps to address the issues, he added.

“We think they’ll manage to get on top of it but it will take time because we’re just restarting from a very low level of activity,” he said. “But it needs to go fast for the A320 family, which is the biggest driver for us.”

Airbus is currently assessing the business case of going beyond 64 A320 jets per month and potentially reaching as many as 75 a month by mid-decade and that internal study is slated to conclude next year, Faury said.

“We’re just at the beginning of a journey from 40 to 64,” he said. “In 2022, we’ll need to have a good understanding of what we want to do in 2025 or 2026.”

On other topics, the CEO said: 

• The company is “quite clear” that it will one day do a stretch version of the A220 known as the -500, but it’s not the right time yet, Faury said. “We want to be close to breakeven, we want to see the market really recovering, post Covid-19, post pandemic, and we need to see the financial equation making sense for us with more operators of the 220 in the world,” he said.
  • NOTE, Sept. 29, Air France-KLM CEO says he’s interested in stretch version of A220
• Airbus is having discussions with numerous potential customers for its A35 freighter, Faury said, though the planemaker isn’t in a hurry to secure launch customers.
  • “Customers will have to take orders if they want to be the first ones—that’s more the momentum at the moment, to decide who will be first, but we’re not in a hurry,” he said.

Airbus shares fell 0.9% to 115.54 euros as of 10:49 a.m. in Paris, and are up 29% year-to-date.