Airbus exec says latest order wins strengthen case for jet output hike

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FILE PHOTO: Airbus' Scherer is pictured in Boston

By Tim Hepher

PARIS – Recent order wins by Airbus have strengthened the European planemaker’s case for raising production of its A320-family narrowbody jets beyond a firm target of 65 a month, a senior executive said on Thursday.

Asked whether deals with Qantas and Air France-KLM had reinforced Airbus’ ambitions to go ahead with further increases, opposed by some suppliers and leasing firms, Chief Commercial Officer Christian Scherer said “yes.”

“What we are seeing materialise in formal decisions is something that we could see coming for months now,” Scherer told Reuters in an interview.

“It now publicly strengthens what we kind of knew all along,” he said, adding he did not want to seem over-confident.

Airbus has been arguing for months that post-pandemic demand for the industry’s most widely used narrowbody models will justify an increase in output to well above pre-crisis rates.

Airbus A320-family output reached a record 60 a month in 2019 before falling back to 40 a month when the crisis hit air travel last year.

Airbus now plans to increase output to 65 a month and has said it is pondering rates as high as 75.

Engine makers and some other suppliers have voiced reservations, fearing the snapback in demand would either be short-lived or would push existing jets into retirement too quickly, harming their maintenance profits for older jets.

Others say supply chains remain too tight to raise rates.

However, the latest Airbus orders generated a significant breakthrough for U.S. engine maker Pratt & Whitney at Qantas.

“It would seem that Pratt & Whitney’s recent success indicates they are in agreement with the Airbus view of the market,” Scherer said.

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He hailed the sale of new A350 freighters to two airlines – Singapore Airlines and Air France-KLM – in as many days.

After launching the jet mid-year, Airbus had to wait several months to win the first order at last month’s Dubai Airshow.

This week’s tentative deals for a combined total of 11 freighters are the first from major network carriers.

“We were right to believe in it and were … surprised by how quickly and how forcefully the market has endorsed the product,” Scherer said.

Boeing Co is expected to hit back with a freighter version of its future 777X in an effort to maintain its dominance of the air cargo market, with Qatar Airways dangling a large order.

(Reporting by Tim Hepher in Paris; Editing by Tassilo Hummel and Matthew Lewis)