Airbus slams skeptical supplier Raytheon over jet production

Airbus slams skeptical supplier Raytheon over jet production

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Written by Tim Hever

PARIS (Reuters) – Europe’s Airbus battled with U.S. giant Raytheon Technologies on Friday over plans for a record jump in aircraft production after the industry’s largest contractor questioned whether a faltering supply chain could survive.

The world’s largest planemaker said it was committed to a two-part plan to increase production by 50% from current levels in 2025 – a goal that would help Airbus become the first civilian planemaker to deliver 1,000 planes in one year.

CEO Guillaume Faury said demand is likely to outpace supply for more mass-produced mid-range models as Airbus enjoys an advantage over rival Boeing (NYSE: NYSE).

But speaking at the company’s first large-scale investor event in four years, he acknowledged concerns from inflation to interest rates and said a broad-based recovery was not certain.

“We are in a period where things are accelerating, and we have multiple crises to manage,” Faury said.

He spoke of a potential share buyback as Airbus rebuilds liquidity depleted by what he called the “existential crisis” of COVID-19, but cautioned that “we are not there yet.”

Airbus shares floated in and out of positive territory and by mid-afternoon were up 0.4%.

Travel outside China has seen a rebound in demand for the medium-haul A320neo and Boeing 737 MAX, recovering faster than expected. But Airbus’ plans to build 75 A320neo planes a month in 2025, up from about 50 now, has been met with some skepticism.

The president of Raytheon (NYSE::) Technologies, which owns engine maker Pratt & Whitney, said at a conference last week that Faurie “might say a rate of 75, but we believe a rate of 65 is doable” by 2025.

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Faury called the comments “really unhelpful” and said engine makers were concerned about timing, not number. He told the investors, “They believe in 75. He can quote me because I checked.”

Raytheon had no immediate comment.

Reuters reported this week that Airbus has eased pressure on suppliers to meet the 2025 deadline, leaving room for it to fall back to 2026, but it has been committed to the goals for now. The company did not say that in 2025 it may reach the target 75.

Suppliers say the key is when targets can be hit consistently.

“We’ll see when we plan to get to 75 in (20) 25 hopefully,” Fury said on Friday. “I’m sticking with (20) 25. That’s probably something we’ll be communicating more precisely in our results for the full year.” .

A220 . upgrade

Meanwhile, Airbus has given the strongest hint yet that it is planning to launch a larger version of its 110-to-130-seat A220, but has not offered clues about the timing of the decision.

Faury said an extended version of the lightweight aircraft made a lot of sense, “but we don’t want to be too early.”

The A220 was developed with a focus on the major portion of the aircraft market, but Canada’s Bombardier (OTC πŸ™‚ struggled to keep pace with the investments needed to replace Airbus and Boeing and sold the space gem to Airbus in 2018.

Airbus has faced higher-than-expected costs in its loss program but believes they could offset by mid-decade.

The A220-500 will begin the process of replacing the 150-seat A320neo, the European aviation and aerospace cash cow and a major battleground in the transatlantic war for sales with Boeing.

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Airbus has taken the lead in the major part of the single-aisle market, most recently with the larger A321neo, which chief financial officer Dominic Asam said would generate an increasing percentage of sales.

Although Airbus was born as a producer of long-range wide-body jets with the A300, which took flight 50 years ago next month, its biggest commercial success to date has been in the single-aisle, single-spine jets that have become popular with airlines. low cost.

Improvements in the largest single-aisle aircraft affected the lower end of the market, reserved for decades for wide-body aircraft such as the Boeing 747, 777 and 787 or the Airbus A350.

Faury said Airbus aims to ramp up competition with Boeing in the widebody market, starting with the new A350 Freighter. Experts say Boeing dominates air freight and has so far outflanked the A350 with its futuristic 777X Freighter.

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