Airbus Looks at Building 50 A320s a Month as Forecast Is Raised
Airbus SAS said it’s looking at accelerating production of its single-aisle A320 series to 50 planes a month after projections for Asian economic growth prompted a 7.5 percent increase in its 20-year sales forecast.
Chief Operating Officer John Leahy said he’s “confident” Airbus will soon decide to switch to building 44 narrowbody planes a month, two more than the level planned for the end of 2012, and that it’s also “studying” the still higher rate.
Airbus forecasts that 27,800 jets valued at $3.5 trillion will be required between now and 2030, including 19,200 single- aisle examples, according to its latest Global Market Forecast released today. U.S. rival Boeing Co. (BA) sees a need for 30,900 planes over the same period and has said it will need to build 60 narrowbodies a month by the decade's end to meet demand.
“There’s always the possibility we could go higher,” Leahy said in an interview at a presentation in London. “But there’s no timeframe and we’re not looking at going beyond 50. I think the 60 Boeing’s talking about is ridiculous.”
Single-aisle planes will account for 40 percent of new aircraft by value and 69 percent by units over the next 20 years, the European company said. About 6,900 widebody planes will also be required, plus 1,781 so-called very large aircraft, such as the Airbus A380 superjumbo, it estimates.
Airbus is concerned that Europe’s sovereign debt crisis may hurt the ability of airlines to raise bank financing for purchases in the short term, Leahy said. Still, the Toulouse, France-based manufacturer has financing commitments for all deliveries this year, and even events such as the Sept. 11, 2001, terror attacks amount only to “minor blips” in the long- term growth trend, he added.
“The aviation sector is expected to remain resilient to cyclical economic conditions, as in the past,” Airbus said in a statement, adding that orders will be spurred by growth in emerging markets, greater urbanization, increasing wealth, replacement of older planes and expansion of discount carriers.
Higher fuel prices are aiding immediate demand as carriers switch to more-efficient models. Since offering new engines for the A320, a version it’s dubbing the neo, last December, Airbus has garnered orders and commitments for more than 1,200 planes. Chicago-based Boeing has won almost 500 commitments since agreeing to do likewise with the 737 in July.
Airbus, a unit of European Aeronautic, Defence & Space Co. and the world’s biggest maker of commercial aircraft, ahead of Boeing, predicts that passenger traffic will grow by 4.8 percent a year on average over the next two decades, with the global passenger fleet more than doubling to 31,500 planes.
Asia will account for 34 percent of new jets, and Europe and North America will each take 22 percent, Airbus said, with growth led by long-haul routes. Traffic will quadruple in India and triple in China, where Leahy said Airbus’s joint-venture plant in Tianjin will make A320neos in the future.
Airbus’s prediction for widebody planes represents an 11 percent increase from the forecast published in December and the single-aisle figure is up 7.4 percent.
The prediction for very large aircraft amounts to an increase of just 43 planes, or 2.5 percent, from the earlier outlook, and any stretched version of the double-decker A380 will have to wait until the end of the decade, Airbus said. Boeing sees less need for very large planes, 45 percent of which will operate in the Asia-Pacific, according to its rival.
Randy Tinseth, Boeing’s marketing chief, said separately today that Airbus’s view of demand for very-large aircraft is high because the company underestimates sales of smaller planes, its analysis of demand for which usually lags behind production.
“We view our own forecast as driving our production plans and helping to assist our suppliers,” he said of the U.S. company’s ramp-up strategy while speaking at the ISTAT aircraft- trading conference in Barcelona.
Airbus’s forecast also includes 900 newly built freighters. Two thirds of the world’s cargo planes are older passenger models that have been converted.