Despite most professionals envisioning a multi-year-recovery for the aviation industry, European planemaker Airbus will be sticking with its planned A320 family production rate increase. The news comes in the midst of subsequent coronavirus waves across Europe but also promising news regarding vaccine approval and distribution.
Continuing with existing plans for 2021
An anonymous source tells Bloomberg that Airbus will go ahead with its 2021 production-rate-increase for its popular single-aisle A320 family, from 40 to 47 per month, despite intense coronavirus outbreaks in many parts of the world.
Reports earlier in the year had suggested that a cut in A320 family production of as much as 50% was a possibility. Airbus was previously producing at a rate of 60 per month and had planned to increase this to 63 by the end of 2020 and to 67 by 2023.
Over the course of 2020, the production rate dropped to 40, but last month, Simple Flying noted that this would ramp up to 47 jets the following year, with Airbus telling its supply-chain partners to be ready by July 2021 as it anticipates a strong recovery for the industry.
The anonymous source also tells Bloomberg that the company has “extensively stress-tested its backlog of orders” for the A320 family. Indeed, after this examination of orders, Airbus remains comfortable with its strategy to bump up production.
This confidence to increase production may have also been bolstered by the past month of good news regarding effective vaccines. This has subsequently led to airlines and airports around the world promoting their abilities to effectively distribute pharmaceuticals when the time comes.
While business travel could take some time to recover, there is undoubtedly a good deal of pent-up leisure demand as well as what is known as “VFR travel,” or “visiting friends and relatives.” Upon widespread distribution of a vaccine, this pent-up demand could very well result in a travel spike when the time comes.
Canceled orders find new homes
Additional good news came for Airbus this week came in the form of six A320neos finding new owners. The six jets were earmarked for Southeast Asian airline group AirAsia, but the budget carrier said it wouldn’t be taking any more deliveries this year. The following statement was made in April:
“We do not intend to take any new aircraft deliveries this year with the target to end 2020 with 242 aircraft, a net reduction of 1 aircraft from last year. We are relooking at our orderbook with Airbus.” Executive Chairman of AirAsia Group, Datuk Kamarudin Meranun
While the planemaker has more canceled and deferred aircraft to deal with, Airbus’ Chief Financial Officer Dominik Asam said in October that the number of “white tails” stood at “very low double digits.”
What do you think of Airbus’ decision to bump up production next year? Do you think the industry will have recovered enough by then? Let us know in the comments.