Airbus posts profit, plans new jet assembly line in Alabama

Airbus said Wednesday that its profit in the first three months of 2022 more than tripled to 1.22 billion euros ($1.28 billion), helped by an increase in aircraft deliveries as airlines recover from the worst of the pandemic.

Airbus said it plans to speed up production of its A320 family of planes that compete with Boeing 737s to 75 per month by 2025. To hit that rate, Toulouse, France-based Airbus
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will build a second final assembly line at its plant in Mobile, Alabama, CEO Guillaume Faury told reporters.

The ramp-up in A320 production builds on a current Airbus goal to build 65 A320s a month by the middle of 2023. The company hopes to take advantage of strong demand for short- and medium-range planes. Boeing
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is also trying to churn out more 737 Max jets but is producing only about 30 a month.

Richard Aboulafia, an analyst for the consultant AeroDynamic Advisory, said Airbus’ aggressive plans should worry the European company’s rival, Chicago-based Boeing Co.

“The market for single-aisle jets is extremely strong, and the A321neo is doing particularly well,” Aboulafia said. He said Airbus’ objective is to gain 70% of that market, leaving only 30% for Boeing, “and they just might get there.”

While it is forging ahead with ambitious production plans, Airbus suffered a setback in building a new plane, the A321 XLR. Airbus now expects the plane to begin carrying passengers in early 2024, not late 2023. Airbus has encountered more difficulty than it anticipated in meeting certification requirements set by Europe’s aviation regulator.

The market for “narrowbody” planes like the A320 and 737 families is much stronger than demand for bigger, two-aisle “widebody” planes that are mostly for long-haul international flights — a segment of the travel market that has been slower to recover.

Some analysts question whether the supply chain is strong enough to let Airbus hit production targets. Airbus officials said on a call with analysts that suppliers have assured the company they can produce the necessary parts.

Airbus said, however, that Russia’s invasion of Ukraine and the resulting ban on Russian imports has increased the company’s exposure to supply-chain disruptions. Before the sanctions, the company used titanium from Russia in aircraft parts.

In the first quarter, Airbus delivered 142 airline planes, up from 125 a year ago. Revenue rose 15% from a year earlier, to 12 billion euros ($12.645 billion).

The company stood by its targets of delivering 720 airliners this year and producing 5.5 billion euros ($5.8 billion) in adjusted profit before taxes, even with rising risks due to the “complex geopolitical and economic environment,” Faury said.

William Murphy

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