Airbus CEO Guillaume Faury says getting to 75 narrowbodies per month is “only a matter of speed.”
On Wednesday night, Airbus CEO Guillaume Faury told an audience of aviation luminaries that aviation’s full recovery was still some way off. At the UK Aviation Club, Faury told guests that returning to 2019 traffic levels was unlikely to happen before 2024.
According to the news agency Reuters, Faury said that while Airbus was sticking to its recovery forecast between 2023 and 2025, 2023 was now looking increasingly unlikely. He put that down to heavy airline losses and ongoing travel restrictions in China. Of course, geopolitical unpredictability means that China could throw open its doors tomorrow, prompting a surge in Asia-Pacific demand that would blow a hole in Faury’s forecast. That’s the nature of forecasting, particularly about aviation and the weather.
It’s all about production rates
It seems the burning topic for Airbus is its monthly production rate and reaching the magical 75 narrowbody aircraft per month output by 2025. Despite some reservations from engine makers and others in the supply chain, Faury said making that target was likely.
“We think that 75 is the right place to be for the second half of the decade…there is more demand than 75, but 75 is a robust place to be from the demand side. It is more challenging for 75, for the time it takes to get there, but we will get there. It is just a matter of speed.”
At the end of September, Airbus and Boeing reported they were sitting on orders for 12,530 commercial aircraft. Combined, they have un-filled orders for 10,855 narrowbody aircraft, with Airbus reporting 6,661 in backlog and Boeing 4,194. The dominant type for Airbus is the A321neo, while at Boeing, 80% of its backlog is for 737 MAX airplanes. What is not said is when the airlines or lessors who ordered the planes need or want them delivered. There is a lot of chatter and reporting on monthly production rates, mainly as barometers of how well each OEM is doing, but how meaningful are they?
A race to the finish line in 2022
By September 30, Airbus had delivered 437 airplanes, well short of its revised (down) target of 700 in 2022. Getting aircraft out the door pays the bills and keeps shareholders happy, but Faury said there was more to it. He sees reaching 700 deliveries as the first step in a chain toward the 75 narrowbody monthly deliveries goal set for 2025, explaining,
“There is a lot on our plate…for the last three months of the year, but it is not very different from what we have done in ’17, ’18 and ’19. That’s for 2022. And we need to get there to be on our way [to] reaching 65.”
On average, Airbus has delivered 49 aircraft per month in 2022 and will have to lift that to 88 to reach its goal. As Faury said, sprinting to the finish line is not unusual, so we will have to wait and see how the next three months pan out for Airbus. More interesting is his reference to this domino effect of what must happen to reach the set-in-stone 75 per month in 2025. The next step from the current 50 per month is to be at 65 in early 2024, with Faury telling the audience, “early 2024 is the best assessment we have.”
Although Airbus had expressed concerns about the UK leaving the European Union, Faury said it had “turned the page” on its public opposition to Brexit. He told the audience that Airbus was still building all of its wings in Wales and relied heavily on engine maker Rolls-Royce, adding, “we don’t intend to change this.” Reuters also reported that Faury later met with UK Prime Minister Liz Truss and Secretary of State for Business Jacob Rees-Mogg.
