Airbus Set to Beat Targets as CEO Cautions on Challenges Ahead

Airbus SAS Chief Executive Officer Fabrice Bregier told employees that the aircraft manufacturer will beat its targets for orders and deliveries this year, even as the company cedes the industry crown to rival Boeing Co. (BA)

Airbus had set a goal for 580 aircraft deliveries in 2012 and orders of 650 units. By the end of last month, the French company had handed over 516 airliners, predominantly single- aisle jets that form the backbone of the industry.

In a letter to employees obtained by Bloomberg, Bregier said the order target was “a real challenge” to achieve because Airbus had enjoyed record demand for an upgraded variant of its A320 single-aisle in the previous year.

The Airbus CEO is in his first year at the helm of the Toulouse, France-based company, after moving up from chief operating officer. Bregier said while there will be “speculation about our performance against Boeing,” he is pursuing his own goals, cautioning that 2013 will be rife with challenges that Airbus needs to overcome.

In his review of Airbus’s progress on the A380 superjumbo, Bregier conceded that the discovery of hairline cracks in the wings “were a real crisis,” harming the plane’s reputation.

Airbus will face the “huge challenge” of having to retrofit 11 Singapore Airlines (SIA) Ltd. A380s in parallel with regular, scheduled aircraft output, while the facility that builds the wings imbeds a new design for routine production.

Airbus expects to deliver a total of 60 A380s over the next two years, Bregier said. Airbus is scheduled to hand over its 30th A380 for the year in the last week of December.

Achieving first test flights by mid 2013 for the long-range A350 wide-body is the “key objective” for 2013, and Bregier called results from engine tests “promising.” The first A350 after construction is on track for ground testing of mechanical, electrical and avionics systems, he said.

To contact the reporter on this story: Andrea Rothman in Toulouse at aerothman@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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