Airbus to ramp up production as Boeing is embroiled in 737 Max crisis

Airbus to ramp up production as Boeing is embroiled in 737 Max crisis

Europe’s Airbus is planning to ramp up production of its A320neo single-aisle jet, putting the squeeze on Boeing shortly after its U.S. rival registered its worst annual orders in decades.

Airbus is widely thought to be well-placed to benefit from Boeing’s protracted demise. The U.S. aviation company has been embroiled in a crisis since its best-selling 737 Max airliner was grounded last March, following two deadly crashes.

Earlier this week, Boeing reported zero plane orders for new airplanes in the month of January. It also recorded a negative order rate for 2019 for the first time in decades, as customers either canceled or converted orders.

In contrast, Airbus reported Thursday that deliveries of the A320neo aircraft — the direct competitor to Boeing’s 737 Max — rose by 43% year-on-year to 551 in 2019.

The “ramp-up” continued for Airbus Cabin Flex (ACF) version of the A321 plane too, the company said, with almost 100 more deliveries than in 2018.

The aerospace group also confirmed it was discussing “further ramp-up potential” for the A320 program beyond a rate of 63 planes per month. It already sees a “clear path” to further increase the monthly production rate by one or two planes that would mean it could produce 67 planes per month, by 2023.

‘We put a lot behind us in 2019’

“The direct competitor to the 737 Max is the A320 in the Airbus family of products. And on the A320, as you know, we are sold out until 2025 so we have no real opportunity in the short-term to offset the consequences of the grounding,” Airbus CEO Guillaume Faury told CNBC on Thursday.

His comments came shortly after Airbus announced it had reached a deal to buy the remaining stake of Bombardier’s A220 passenger jet program.

Like the A320neo aircraft, the A220 is also a single-aisle plane, but it is of a smaller size.

Faury said the group’s decision to purchase the remaining stake of the A220 passenger jet program “highlights and confirms the commitment of Airbus to that plane.”

“We really believe in the very strong potential of the 220. Now, it can be the solution for some of the operators of the 737 but it is a bit of a different segment, so it is a case-by-case analysis,” Faury said.

Airbus reported a net loss for 2019 on Thursday, following an international bribery settlement and problems with the A400M transport plane.

Shares of Airbus were more than 1% lower Thursday afternoon.

“We put a lot behind us in 2019 and especially the end of the compliance investigation and the settlement that has been reached with the U.K. and the U.S. and the French authorities a bit earlier this year,” Faury said.

“Our results reflect, as well, a very strong improvement on the underlying performance,” he added.

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