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

[NEW YORK] 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" labour and materials strains currently complicating that effort, its chief executive officer Guillaume Faury has said.

In an interview on Sunday, he 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 is essential that the plane-maker'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 Mr Faury, who is in Boston for a global aviation summit hosted by the International Air Transport Association (Iata).

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

"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."

Airbus shares fell 0.9 per cent to 115.54 euros late on Monday morning in Paris, and are up 29 per cent year-to-date.

BLOOMBERG