26 October 2020

Airbus Set To Ramp Up A320 Production In Anticipation Of LCC Recovery

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Airbus could ramp up production on its A320 narrow-body jet by nearly 20% in anticipation of recovering demand for new aircraft from low-cost carriers in the wake of the coronavirus crisis.
The European planemaker has asked suppliers to be ready to support a higher production rate of 47 A320s a month if needed, compared to 40 aircraft currently.
A decision on post-Covid production rates has not yet been taken and the increase would not take effect until July 2021 at the earliest, according to a report by the FT.
Airbus’ surprise move follows a prediction from European LCC Wizz Air that budget airlines would likely recover quickest from the current aviation crisis.
Wizz Air is one of a handful or airlines to have maintained a relatively strong balance sheet throughout the crisis and holds significantly higher cash reserves than most legacy carriers. Most airlines have deferred aircraft deliveries in recent months but Wizz Air – soon to launch in the UAE – has continued with is schedule.
Indian low-cost giant IndiGo, which is the world’s largest A320 customer, has also said it will go ahead with its massive Airbus order made 12 months ago.
Airbus was forced to slash production rates by a third earlier this year following the onset of the pandemic and the subsequent drop in air travel demand. Before the pandemic, Airbus was producing 60 A320s a month and planned to increase this up to 63 in 2021. This rate was set to increase by 1-2 jets per month throuh 2022 and 2023.
A plan to reinstate A320 production rates would require a recovery from some of Airbus’ largest customers to ensure that orders for hundreds of planes are fulfilled and aircraft are delivered.
Airbus’ latest aircraft data showed the OEM increased its deliveries in September as international travel restrictions begin to ease and demand for air travel slowly returns.
Global passenger demand is expected to return to pre-Covid levels in around 2024 but the demand for wide-body aircraft is likely to plunge as airlines struggle to fill flights over the next few years.
It is unsurprising that Airbus has decided to focus on narrow-bodies in the next few years, especially given main rival Boeing’s 737 Max woes, which has cost it millions in orders.
While the likes of Wizz Air and IndiGo mean Airbus can guarantee some stability in orders, the OEM still needs struggling customers AirAsia and Lion Air to pick up so they can take deliveries.

Source: Aviation Business Middle East

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