Airbus will consider A320 production higher than 44/mo: Enders

Here’s a story we did from the Paris Air Show for Commercial Aviation Online.

Date: 30/06/2011 11:43
Source: Commercial Aviation Online
Location: Paris
By: Scott Hamilton

Airbus and Boeing are boosting production of their bread-and-butter single-aisle aircraft, the A320 and 737, to unprecedented rates. Airbus is planning to go to 42 per month and is considering 44; Boeing has announced taking its rates to 42 per month.

Airbus came away from the Paris Air Show with more than 1,000 orders and commitments for the A320neo family, an unprecedented sales success in commercial aviation, since the programme launch in December 2010.

In an interview following the closing air show Airbus press conference, Enders has already moved on from the stunning sales. Instead of being on a euphoric high, Enders acted as if this had been just another day at the office.

CAO: You seem pretty subdued. What does it take to get you excited?

Enders: “As a CEO you enjoy the sales but you always think about the production and deliveries.”

Strategically, tactically, setting aside the practicalities of implementation, do you see the need to take rates beyond 42-44 per month to meet the new aircraft demand?

“I do, not because of Boeing [and the prospect of a New Small aircraft] but because the demand is there. The market demand is there. Principally speaking we can take the rates way beyond 42 but the question is we need to be realistic about our own capabilities, what does it cost us and can the supply chain [do it]. We will think hard about that but I don’t want to rush to any conclusions.

“We will put some smart guys on that job and thorough analyze what we can do. As everybody knows, it is not just about us. [It is about the suppliers.] The mood is very upbeat in the supply chain.”

Would you consider expanding to Mobile (AL) for the A320neo demand?

“Mobile was a solution for the tanker and on top of that, the 330 freighter. We lost the tanker. I don’t see a basis for Mobile. I’m not speculating right now about the neo. We have great facilities in Toulouse and Hamburg, also in Tianjin-we can ramp up. We will carefully look at the investments and the business case that it will take. But it is not the final assembly line (FAL) that is the bottleneck. We’ve shown in Tianjin that we can replicate the final assembly line. Again, it is the supply chain.”

Is the A330 freighter viable? A number of leasing company customers have switched from the freighter to passenger models and Intrepid Aviation is expected to do the same with some of its order for 20. Why has this programme stalled or reversed?

“I don’t think it has stalled. The demand of passenger aircraft is going up. I think the jury is still out on the freighter one. I am absolutely convinced that this will find its market.”

Akbar Al-Baker, the CEO of Qatar Airways and the launch customer of the A350-1000, suggested Airbus did not go far enough in revising the airplane. He thinks it should be bigger, longer ranged. What is your response?

“You always find customers who are not satisfied, who would like to have additional range, additional payload. I can only say we do carefully listen to our customers. The -1000 decision we announced is the result of customer comments. I am not surprised there are some customers who want more than we are able or willing to offer.”

The EU said it will comply with the WTO ruling finding Airbus received illegal subsidies. What does this mean for Airbus? Will you have to write a big check or two or three?

“No, not at all. The ruling against the EU was a big success (for the EU) because most of the claims were dismissed. We see this as a big success for Airbus because the launch aid as a principal has not been condemned. There were no prohibited subsidies.”

If launch aid has to be on commercial terms, why even bother to go to the governments that are of no better preference than in commercial markets?

Rainer Ohler, Airbus Communication chief jumped in here: “The reason is that as long as Boeing gets it (government subsidies), we want it. It’s a level playing field, nothing more, nothing less. For the next six months we will work on taking away the [negative] affects. It’s a large basket and we have to make it a lighter basket.”

Enders: “This is good business for our governments. The return they get [in royalties, interest income] outweighs what they have to pay in.”

A few years ago, you said you would rather not engage in this type of activity.

Absolutely.

That being the case, you could retain more profits if you stopped. Why don’t you?

“We’ve always said we’re open to abolishing the whole damn launch aid for Airbus if we have a level playing field with the other side. I’m still at that point. I’ve also said at the outset that this is an anachronistic regime. We have to include the other countries (China, Russia, Canada, Brazil, Japan) in a new agreement.”

When might we see an A380-900?

“Maybe in the second half of this decade.”

10 Comments on “Airbus will consider A320 production higher than 44/mo: Enders

  1. When is the WTO ruling on illegal subsidies Boeing got scheduled ?

  2. This is the other shoe that will drop. At the moment Airbus looks like they have no significant availability this side of 2018. Another rate increase could fix this and make life even more difficult for the other OEM.

  3. I don’t recall Airbus putting a date on the A380-900 before. That’s a scoop!

  4. “Maybe in the second half of this decade.”

    I rather doubt it…

  5. To FF and UKair
    If the large number of orders for small to medium range aircraft at the PAS
    is any indication of the huge traffic increases expected by the airline industry
    for the next decade or two, especially in the Pacific/Middle Eastern areas,
    there is no reason to assume that this trend will not be affecting the large to
    very large aircraft market, i.e. the 777/747-8 and A350/A380, as well.

    I am afraid, however, that based on the totally underestimated potential for
    the A380 by Boeing Management, the A380STR will appear rather sooner
    than later, because of its ability to reduce traffic congestion at major hubs!
    Once that has taken place, that airplane with its unbeatable seat mile cost,
    will have no competition whatsoever, because it will be too late to build a
    competitive aircraft by Boeing or any other manufacture, as happened with
    the 747 in the late 70,s, a decade after it went into service in 1970.

    Only a radically new aerodynamic aircraft configuration, i.e. BWB, could
    improve on the seat mile costs of the A380STR.
    However, the chances of the BWB coming on the scene as a commercial
    airplane anytime in the near future, appear to be less likely at this time, the
    Tanker/Transport requirement having been filled with conventional 767.

    • Rudy, you have reasoned very well why there should be an A380-900 on the market and I have no doubt there will be…. just in this decade, in my opinion. It may get launched, but EIS probably in the first half of the next decade. Reasons:
      – plenty of development work currently with A350-900, NEO and A350-1000.
      – A380 production is still lagging way behind where it should be.

      I think the -900 version will be launched around the EIS of the A350-1000, 2018.

  6. He said, “Maybe in the second half of this decade.”

    Yes, Maybe …. or Maybe not.

    • A well running production line was said by Airbus to be prerequisite for kicking off the A380-900 ( and any other derivative ? )
      Wonder how much weight will be ( and has already been) shaved of the base model
      compared to EIS as datum.

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