Airbus criticizes skeptical supplier Raytheon over aircraft production

Airbus criticizes skeptical supplier Raytheon over aircraft production

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PARIS, Sept 23 (Reuters) – Europe’s Airbus (AIR.PA) clashed with U.S. giant Raytheon Technologies (RTX.N) on Friday over plans for a record jump in passenger jet production, after the largest contractor in the industry questioned whether a broken supply chain could hold.

The world’s largest aircraft maker said it would stick to a two-part plan to increase production by 50% from current levels by 2025, a goal that would help Airbus become the number one civil aircraft maker in the world. deliver 1,000 aircraft in a single year.

Chief Executive Guillaume Faury said demand was likely to outstrip supply for the most widely produced mid-haul models, in which Airbus enjoys an advantage over US rival Boeing. .

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But speaking at the company’s first large-scale investor event in four years, he acknowledged concerns from inflation to interest rates and said the overall recovery was less certain.

“We are in a period where things are accelerating; we have multiple crises to manage,” Faury said.

He spoke of a possible share buyback as Airbus rebuilds cash depleted by what he called the “existential crisis” of COVID-19, but warned that “we are not there yet”.

Airbus shares moved in and out of positive territory, rising 0.4% by mid-afternoon.

The recovery in travel outside of China has seen demand for medium-haul A320neo and Boeing 737 MAX aircraft recover faster than expected. But Airbus’ plans to build 75 A320neo Family planes a month by 2025, up from 50 today, have met with some skepticism.

The boss of Raytheon Technologies, which owns engine maker Pratt & Whitney, told a conference last week that Faury “could say rate 75, but we think rate 65 is feasible” by 2025.

Faury called the comments “really pointless” and said engine makers were worried about timing, not numbers. “They believe in 75. I can be quoted because I checked it out,” he told investors.

Raytheon did not immediately comment.

Reuters reported this week that Airbus had eased pressure on suppliers to commit to the 2025 deadline, leaving room for it to be pushed back to 2026, but was sticking to targets for now. The company has not said when in 2025 it might reach the goal of 75. Read more

The key, providers say, is when goals can be consistently achieved.

“We’ll see when we plan to hit the 75 rate, at (20)25 hopefully. I’m committed to (20)25. That’s probably something we’ll communicate more precisely about in our full-year results,” Faury said Friday. . .

A220 UPGRADE

Meanwhile, Airbus gave the strongest hint yet that it plans to launch a larger version of its A220 airliner from 110 to 130 seats, but gave no hint as to the timing of the decision.

A stretched version of the light aircraft makes a lot of sense, “but we don’t want to be right too soon,” Faury said.

The A220 was developed with the main share of the jet market in mind, but Canada’s Bombardier struggled to keep up with the investments needed to displace Airbus and Boeing and sold its aerospace jewel to Airbus in 2018.

Airbus has faced higher-than-expected costs on the loss-making program but believes it can break even by the middle of the decade.

An A220-500 would begin the process of replacing the 150-plus-seat A320neo, Europe’s aerospace earner and a major battleground in the transatlantic sales war with Boeing.

Airbus has taken a leading position in the main part of the single-aisle market, most recently through the larger A321neo, which finance chief Dominik Asam says would take a growing share of sales.

Although Airbus was born as a manufacturer of long-haul wide-body aircraft with the A300, which took off 50 years ago next month, by far its greatest commercial success has been the single-aisle aircraft that became popular with low-cost airlines. cost.

Improvements to larger single-aisle jets have eaten up the low end of a market reserved for decades for wide-body jets like Boeing’s 747, 777 and 787 or the Airbus A350.

Faury said Airbus aimed to step up competition with Boeing in the wide-body market, starting with the new A350 Freighter. Experts say Boeing dominates air cargo and has so far outsold the A350 with its future 777X Freighter.

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Information from Tim Hepher; Edited by Edmund Blair and Mark Potter

Our standards: the Thomson Reuters Trust Principles.

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