By Robert Wall
TOULOUSE, France-- Airbus Group SE is considering increasing
output of its popular A320 single-aisle jetliner by as much as 26%
to more than 60 a month, stretching a global supply chain also
grappling with surging demand from Boeing Co.
Airbus and rival Boeing Co., the world's largest plane makers,
have enjoyed a period of record order intake for new planes,
principally their single-aisle jets that are the backbone of global
flying. The growth of low-cost carriers has helped fuel demand for
narrowbody planes that propelled Airbus's backlog of
yet-to-be-delivered A320 type jets to 5,144 planes at the end of
last month.
"It is more a matter of when we ramp up, than if we ramp up,"
Airbus jetliner boss Fabrice Brégier said Thursday.
Airbus in February announced plans to increase output of its
A320 jetliner to 50 planes a month in early 2017 from 42 currently.
A decision to build more of the single-aisle planes could come
before year-end, he said. The ability of suppliers to support
higher output levels is being examined, he said.
"I, for one, am looking for a rate over 60" single-aisle
aircraft a month, said John Leahy, Airbus chief operating officer
for customers. Building 63 narrowbody jets a month "is clearly
justified" by market conditions, Mr. Leahy said.
Airbus could start building around 60 single-aisle planes a
month from 2018, said Tom Williams, chief operating officer for the
plane maker. Airbus, at the time, will be building mainly A320neo
jets which feature new engines. "We've got to make sure the engine
guys can also match that rate," Mr. Williams said.
Producing that many more planes could boost Airbus annual sales
by $70 billion at list price, though airlines typically get big
discounts.
There will also be pressure on other suppliers, he said. Airbus
has 7,500 direct suppliers, though often trouble spots are further
down the supply chain. Pressure on suppliers is amplified by Boeing
also increasing output. Mr. Williams said Airbus shares around 60%
of suppliers with its Chicago-based rival.
Boeing Co. is also raising output of its rival 737 jetliner to
52 aircraft a month from 2018. It currently builds 42 such planes a
month and has said it could accommodate production of 60 737 jets
each month.
Airbus believes its A320neo can continue to outsell Boeing's
rival 737 Max jetliner, which also will sport new engines. The new
Airbus jet currently holds about 60% of the next-generation
single-aisle market.
Mr. Leahy played down concerns the big order backlogs that
Airbus andBoeing have built up can't be sustained. The appetite for
air travel among the emerging middle class in developing economies
will help sustain demand, he said. Boeing chairman Jim McNerney
this month also assured investors demand for planes remained
robust.
From next year Airbus will start building A320 jetliners in
Mobile, Alabama, adding a fourth assembly site to those in
Toulouse; Hamburg, Germany; and Tianjin, China.
Mr. Leahy also said the plane maker is poised to win
"significant" orders for its A330 long-range jets at the Paris Air
Show, scheduled to take place next month. Airbus has announced
plans to reduce output of the plane from 10 aircraft a month to six
a month from next year amid weak demand. A further cut in output
might be averted if Airbus secures the orders it currently is
pursuing, he said.
Airbus continues to assess the business case to upgrade its
poorly selling A380 superjumbo, Mr. Brégier said, though detailed
studies haven't yet been undertaken.
Emirates Airline, the largest customer for the plane, has been
pushing Airbus to build an upgraded version with new engines,
dubbed the A380neo. Emirates Airline President Tim Clark has said
he would buy as many as 200 of the new planes.
Mr. Leahy said the plane maker isn't yet ready to launch the
program and that it would be difficult to do with just one
customer, though he suggested there could be strong demand for such
a plane.
Write to Robert Wall at robert.wall@wsj.com
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