Airbus exec says wary engine makers will meet demand for new jets

[October 06, 2021]  By Tim Hepher

BOSTON (Reuters) - Airbus continues to study increases in jet output and believes engine makers who have questioned the plan will be "unable to resist" future demand for jets, its sales chief said, as airlines reported glimmers of a post-pandemic recovery.

Airbus has said it wants to almost double jet production in a few years as borders reopen. Engine makers fear doing so too quickly could upset their own recovery, by forcing existing jets into retirement rather than their repair shops.

Interviewed at the airline industry's main annual event, Airbus Chief Commercial Officer Christian Scherer held out the prospect that Airbus would play on the fierce competition between engine makers to secure its A320-family production plans.

"There will be engines. That is the beauty of having engine competition in the programme," he told Reuters on the sidelines of a meeting of the International Air Transport Association.

"There is a lot of rhetoric ... (but) at the end of the day if customers ... demand more modern airplanes ... no engine maker in the world is going to be able to resist the call of nature. So I’m not concerned about it.”

In May, Airbus issued a mix of firm targets and scenarios that could lift narrowbody A320-family output to 75 jets a month by 2025 from about 40 this year, and 60 pre-COVID.

The head of France's Safran, part of the CFM engine venture with General Electric, said earlier this year he was not sure whether rates above 60 could be sustained.

Also speaking in July, Greg Hayes, CEO of Pratt & Whitney parent Raytheon Technologies, expressed surprise at "pretty aggressive" Airbus output plans.

Both engine makers offer competing engines on the A320neo, the most-sold Airbus jet which competes with the Boeing 737 MAX.

Asked if Airbus had given up on raising output beyond the targeted 63 a month to 70 or 75, Scherer said: "absolutely not".

He added: "It is a scenario right now. It is not a committed plan. But it is a sizing exercise that we must do because it corresponds to demand – verified demand, not theoretical demand – that we are experiencing, including in meetings we are having right here.”

Scherer was speaking on the sidelines of the annual meeting of the International Air Transport Association, where airlines and their suppliers and creditors, including leasing companies, discussed some potential jet orders amidst heavy restructuring.

Scherer also addressed concerns raised by smaller suppliers that the planemaker would raise output, but only temporarily, leaving them to bear the cost of new equipment if the recovery falters.

Several airlines at IATA predicted only a cautious rebound.

“I think recent history has shown Airbus has been able to manage its supply and demand very, very rigorously almost to the dot on the right spot," Scherer said.

"You have to trust that we will continue to do that in the future and not shoot ourselves in the foot by overproducing airplanes that we can’t sell."

(Reporting by Tim Hepher, Editing by Louise Heavens)

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