Airbus sets ambitious goal to lift output above 2019 levels

Paris

AIRBUS SE is preparing to gear up production of its best-selling A320-series jets beyond pre-pandemic levels within two years, lending a jolt of optimism for a recovery in global aviation.

The shares jumped after the world's largest producer of commercial jetliners told suppliers to be ready to raise output of its top-selling narrow-body to a rate of 64 per month by the second quarter of 2023. That figure could rise to 70 a month early the following year and could reach 75 by 2025, Airbus said in a statement on Thursday.

The ambitious plan stands out in an industry that's still struggling to gain traction after the Covid-19 pandemic wiped out demand for air travel. Despite short-term flare-ups in the outbreak, the longer-term picture has brightened with the global rollout of vaccines. Airbus and its US rival Boeing Co have been showing more confidence even as pressure to lower emissions presents the next challenge for the industry.

"We think it is premature, but Airbus is the one with a constant dialogue with airline customers, and it has called things pretty well to date," said Sandy Morris, an analyst with Jefferies. He said he's concerned about further disruption from the pandemic and initiatives to cut emissions.

Airbus shares gained as much as 5.3 per cent. They were up 4.9 per cent to 102.48 euros (S$165.41) as of 9.10am in Paris. Engine and component supplier Safran SA rose 2.7 per cent, while Rolls-Royce Holdings Plc was up 2 per cent.

The announcement will give makers of parts ranging from engines to seats and avionics time to invest in their own operations to be ready when demand returns. Airbus and Boeing count on thousands of suppliers to contribute to commercial jetliners that can cost US$100 million or more.

"The message to our supplier community provides visibility to the entire industrial ecosystem to secure the necessary capabilities and be ready when market conditions call for it," chief executive officer Guillaume Faury said in the statement.

In signalling to suppliers to prepare for the ramp up, Airbus is hoping to avoid a repeat of the delays in handovers that it struggled with prior to the pandemic.

Earlier this month, Airbus said that it had restarted work to convert a French assembly line once used for its A380 super-jumbo to build single-aisle jets. The assembly line for the A320 and A321 aircraft had been delayed last year during the early ravages of the coronavirus crisis. It should be operational by the end of 2022. BLOOMBERG