Airbus CEO Sees Big-Plane Preference as A350 Work Starts
Stock Chart for European Aeronautic Defence and Space Co NV (EAD)
Airbus SAS (EAD) Chief Executive Officer Fabrice Bregier said he’s confident that the world’s largest maker of commercial aircraft can sell more of its largest A350 wide-body aircraft as customers upgrade to bigger airliners.
Airbus may be able to sell 70 to 80 of the A350-1000 annually when the jet goes into production in 2017, compared with its previous planning assumption of 40 to 50 units, Bregier said in an interview from Toulouse, southern France, where Airbus inaugurated the A350 final assembly line today.
“There is a trend to slightly bigger aircraft everywhere in the world, and we’ll probably sell more than we expected,” Bregier told Bloomberg Television. “We will need extra capacity and we are prepared for that.”
The A350, more than 50 percent built from lightweight composite materials, is Airbus’s attempt to win more business from Boeing Co. (BA) in the market for larger passenger aircraft. The A350-1000 can accommodate about 350 passengers and competes with Boeing’s popular 777 airliner. Airbus is now starting assembly of the mid-sized A350-900, with wings arriving in Toulouse and the first unit probably pieced together next month.
Airbus parent European Aeronautic, Defence & Space Co. narrowed its share decline after Bregier’s comments. The stock fell 45 cents, or 1.7 percent, to 26.11 euros as of 2:37 p.m. in Paris, in line with the general market trend.
The A350 has 558 firm orders from 35 customers, the majority for the A350-900. The smaller A350-800 version and the A350-1000 variant aren’t scheduled for service until 2017. Bregier said today that the cost for the program’s three members exceeds 10 billion euros ($13 billion).
Airbus invested 140 million euros in the A350 facility, which includes aircraft halls, taxiways and roads. The opening of the factory, named Roger Beteille to celebrate one of Airbus’s founders, was attended by French Prime Minister Jean- Marc Ayrault, who reiterated his government’s commitment to the A350 program.
Governments in France, Germany, the U.K. and Spain agreed to provide 3.3 billion euros in loans toward developing the plane, with each country’s contribution in proportion to the country’s work share on the plane.
While France, the U.K. and Spain have come forward with the money, Germany has held back some funds because the government is dissatisfied with the German share of work. Bregier said he’d seek to persuade the Germans to pay, since the final assembly line is only a small piece of the A350. Factories in German cities including Hamburg, Bremen, Stade, and Nordenham are all involved in building the plane, he said.
Airbus expects to ramp up to building 10 A350s a month by 2018. Toward the latter part of 2013, it will be at one a month, moving to two monthly from 2014 and then doubling to four by 2015, said Didier Evrard, the A350 program director.
The structure of the A350 is about 50 percent composite materials, compared with 25 percent on the A380. Airbus also makes the A380 jumbo and the A330 wide-body in Toulouse, while factories in both Toulouse and Hamburg assemble the A320 single- aisle models.
Bregier, who took over his position earlier this year from Tom Enders, who now leads EADS, said the first aircraft will be assembled next month, and Airbus will then begin a “very long process” of preparing for first flight slated for next year.
“I can say with a high degree of confidence that we have started the assembly of the first flyable aircraft and that we will be ready for first flight mid 2013,” Bregier said.
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