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Airbus in talks on sales of A350 freighter -exec

Stock MarketsSep 22, 2021 00:50
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© Reuters. FILE PHOTO: A logo of Airbus is seen at the entrance of its factory in Blagnac near Toulouse, France, July 2, 2020. REUTERS/Benoit Tessier/File Photo

By Tim Hepher

TOULOUSE, France (Reuters) - Airbus (Pa:AIR) is in talks with several potential customers for a new A350 freighter while seeing signs of demand for smaller A320 passenger jets in Europe, its sales chief said on Tuesday.

With e-commerce booming, Airbus formally began marketing a proposed freight variant of its A350 passenger jet in July, taking aim at Boeing’s tight grip on the global cargo market.

“We are in a number of very encouraging discussions,” Chief Commercial Officer Christian Scherer told reporters in Toulouse, where the European planemaker is based.

“It is available for sale and is selling,” he added.

Boeing (NYSE:BA) has for years dominated the market for purpose-built freighters, even as its European rival grabbed the crown as the world's largest maker of passenger jets.

Boeing is preparing to launch its own new freighter, a cargo version of its upcoming 777X jetliner, industry sources say.

Freighters can sell for higher prices than passenger planes and help to prop up depressed production for wide-body models at a time when long-haul travel is weak, industry experts say.

While demand for wide-body passenger jets remains stagnant, demand for smaller planes used in regional and domestic markets is rising.

"Demand is coming back," Scherer said. "We need to be very careful - we are not out of the woods and we are still in a very fragile environment - but Europe is rallying quite nicely at this moment."

Airbus plans to increase production of the medium-haul A320neo family, which competes with Boeing's 737 MAX, to a record 63 a month from 40 now, surpassing pre-crisis levels.

It has said it is also looking at pushing output as high as 75 a month, but such levels have drawn concerns about supply chains from engine makers like France's Safran (PA:SAF).

Scherer defended the existing production commitments, which he said were justified by contracts with airlines even after an industry shakeout brought about by the coronavirusus crisis.

"If anything in my world I am challenging them to be steeper," he said.

Airbus is talking to Hungary's Wizz Air over a sale of at least 100 more narrowbody jets, Reuters reported earlier this month.

Among other European prospects, British Airways parent IAG (LON:ICAG) has reopened a fresh competition between Airbus and Boeing for narrowbody jets, revisiting a large provisional order for 200 MAX jets that was never finalised, the sources said.

Finnair is looking at a narrowbody purchase but a formal tender has yet to be launched.

Air France-KLM in July said it had launched a tender to extend the medium-haul fleets of Dutch unit KLM and the French and Dutch arms of low-cost subsidiary Transavia.

Airbus in talks on sales of A350 freighter -exec
 

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