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Airbus deliveries back on track after record August

Published 06/09/2016, 15:57
Updated 06/09/2016, 16:00
© Reuters.  Airbus deliveries back on track after record August
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By Tim Hepher

PARIS (Reuters) - A surge in Airbus (PA:AIR) jet deliveries in August has put the European planemaker back on course to meet an annual target which had been threatened by delays in parts supplies.

Airbus said it had delivered 61 jets in August, 30 percent more than its previous record for the traditionally quiet summer month, bringing the total for the year so far to 400 aircraft.

The European planemaker, whose deliveries had started the year below trend because of problems with supplies of engines and cabin parts, posted a sharp increase in deliveries after putting workers on an overtime drive to help clear the backlog.

Its planemaking chief Fabrice Bregier, who anticipated the record deliveries in an interview with Reuters last week, told a French newspaper on Tuesday Airbus was now capable of meeting its annual delivery goal of 650 aircraft.

August had been shaping up as a make-or-break month for full-year deliveries after earlier delays. The January-August period is traditionally a solid indicator of progress towards full-year deliveries, representing an average of 62 percent of the ultimate full-year total in the past five years.

At the current rate, Airbus is on course to deliver some 645 jets this year, needing a small extra kick to reach the target for 650, which underpins Airbus Group's revenue expectations.

August's increase, from the previous August peak of 47 in 2013, was mainly due to accelerated deliveries of the existing version of the Airbus A320, the company's best-selling model.

It is gradually being replaced by the upgraded A320neo, but deliveries of the newer model have been hampered by technical problems and delays with engines from Pratt & Whitney (N:UTX).

On Tuesday, Canada's Bombardier (TO:BBDb) slashed delivery forecasts for its new CSeries jet, citing delays in deliveries of a similar model of engine from Pratt & Whitney.

Deliveries of the A320neo show signs of recovering, with 5 aircraft handed over in August or one more than the previous best month, but deliveries remain behind the planemaker's original plans with up to 20 jets parked and awaiting engines.

Airbus said it had delivered 16 A320neo jets so far, 13 of them equipped with Pratt & Whitney engines and 3 with alternative powerplants from CFM (N:GE) (PA:SAF).

It confirmed a sharp increase in deliveries of its long-haul A350 jet in August. It delivered six of the aircraft after delays in cabin fittings, but needs to push the average rate above 7 to meet a goal of 50 of the carbon-fibre planes in 2016.

With cabin suppliers like Zodiac Aerospace (PA:ZODC) still struggling to iron out production problems, some analysts question how quickly Airbus will push the supply chain to higher rates as it prepares for 10 A350s a month by the end of 2018.

Airbus meanwhile said it had booked 517 orders in the first eight months, including a 100-plane order from AirAsia (KL:AIRA) held over from the previous month. After cancellations, Airbus had 438 net orders, putting it ahead of rival Boeing (N:BA) even though both are bracing for a drop in 2016 orders compared to last year, due to fragile economies.

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