European planemaker Airbus is looking to slash the production rates of its A320 family of narrowbody aircraft. The A320, currently produced at a rate of 60 planes per month, could see production cut by as much as 50%, with no ramp-up expected until at least the end of the year, and possibly much later.
Airbus will cut A320 production for the rest of the year
The Financial Times reports today that Airbus is planning a significant production cut of its A320 family of narrowbody aircraft. This comes following its suspension of near-term 2020 delivery guidance last month amid the worst aviation downturn in the history of the industry.
The popular A320 family of aircraft is currently produced at a rate of 60 aircraft a month. Just a couple of months ago, Airbus had been gearing up to increase production to 63 by the end of next year, and to 67 a month by 2023. It was in the process of repurposing the A380 production line to support this increased rate.
There are concerns that widebody production could be impacted too. The A350 is currently produced at a rate of 9 – 10 per month, and the planemaker was expecting to produce a total of 40 A330 family jets over the course of the year. With so much uncertainty in the market and airlines looking to defer deliveries, those targets are now looking to be abandoned.
Could production be cut by 50%?
The extent of the production cut has not yet been specified by Airbus, but is expected to update the market at its annual meeting on April 16th. This is being held virtually so as to avoid unnecessary travel. However, Reuters has spoken with people familiar with the matter who have suggested the cut could be as much as half the current production rate.
In a statement sent to Simple Flying, Airbus was clear that it would not provide additional comment on the outlook at this stage. It said,
“Airbus is closely monitoring the evolving COVID-19 situation worldwide and is in constant dialogue with its customers, suppliers and institutional partners.
“Airbus is in the process of assessing the implications of the pandemic on its operations and the potential mitigation measures that could be implemented.
“The Company will not provide further comment at this stage.”
Sources talking to Reuters suggested that the 50% cut could last for up to two quarters, meaning ramp up would likely not start until after September. Even then, it could be hard for the planemaker to get back to the current production levels quickly, suggesting it may be some years before we see output returning to today’s rate.
Sash Tusa of Agency Partners agrees on this point, telling the Financial Times,
“Manufacturers are always very careful about changes in production rates in either direction … They will not change unless they can sustain the rate for two to three years.”
Airbus’ rival Boeing has also been hard hit by the pressures on the aviation industry right now. Just this week it has announced plans for job cuts and expressed concern over future aircraft demand. With both major planemakers in damage limitation mode, we will inevitably see ripples of production cuts and job losses throughout the supply chain in the coming months.
What do you think about Airbus’ production cuts? Let us know in the comments.