Airbus rebuffs lessor complaints over plans to carry jet output By Reuters


© Reuters. FILE PHOTO: An Airbus logo can be seen at the entrance to its facility in Blagnac near Toulouse, France on July 2, 2020. REUTERS / Benoit Tessier / File Photo

From Tim Hepher

PARIS (Reuters) – Airbus has denied calls from aircraft leasing companies to curb plans to nearly double production on its best-selling A320 family of jetliners, telling them that its ambitions are justified by expectations of demand for COVID-19, it said Industry sources with.

Major lessors have joined engine manufacturers to warn Airbus that aggressive production increases could upset the market and hurt aircraft values ​​if the recovery remains fragile.

The latest approach came in separate letters to Airbus from at least two of the world’s largest leasing companies, the sources said, confirming a report by the Financial Times.

Airbus has responded that it is sticking to its plans of having a firm target of 64 A320 Family jets per month in the second quarter of 2023, as well as studies to increase monthly production to 70 in early 2024 and 75 by 2025 from around 40 now.

It told leasing companies complaining about the plans that “the demand is there,” a person familiar with the matter who spoke on condition of anonymity.

“We are continuing to work on our production ramp-up for commercial aircraft according to the plan communicated in May 2021,” said an Airbus spokesman.

The landlords AerCap and Avolon, who are said to have written to Airbus, were not immediately available for comment.

The exchange deepens a dispute over the speed of recovery from a coronavirus travel break that resulted in thousands of planes on the ground last year.

While most analysts agree that a rebound will initially benefit small jets like the A320 and Boeing (NYSE 🙂 737, the dispute centers on whether it makes sense to ramp up production sharply before a flurry of parked ones Jets are back in service, a step that is needed to save their earning potential for lessors and engine manufacturers.

Airbus says its demand forecast is based on verified contracts and that the supply chain needs visibility into its future production plans in order to fund future capacity.

However, the company has yet to reach an agreement with its suppliers on the most ambitious part of its plan.

“There is no agreement beyond 64, discussions are still ongoing,” said one supplier. Another warned that even these levels of production will face new challenges in the face of labor shortages.

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