Airbus and its rival Boeing are finding their record order backlogs no longer offer protection against the impact of the global recession, which is forcing them to cut output. Tom Enders, Airbus chief executive, said the group had reached record production rates late last year, “but now we see a drop of air traffic in most regions. Many airlines are taking capacity out of the market. I do not exclude further production cuts if the need arises”.
Airbus said production rates of its A330/A340 family of long-haul jets – which includes its new freighter variant, the A330-200F – would be held at the current level of 8.5 aircraft a month and not increased as previously planned to between 10 and 11.
The airframe manufacturer said it was cutting output of its A320 family of shorthaul jets – which account for the bulk of its production – by 6 per cent from 36 to 34 aircraft per month from October.
The group first signalled its growing nervousness about the commercial air market last October, when it halted further increases in A320 family production and said it would hold deliveries of A320s at 36 a month rather than rising to the planned 40 a month by the end of this year.
Production of A320s by late this year will be 15 per cent lower than originally planned and the impact of the cutback will be felt throughout the group’s extended global supply chain.
It is currently in the process of commissioning a new A320 assembly line in China, its first outside Europe, which was due to produce up to four a month.
Airbus delivered a record 483 aircraft last year and said it aimed to achieve a similar figure this year. The production cuts announced yesterday would not affect the 2009 delivery target.
The Airbus announcement came on the same day that International Air Transport Association (IATA) director general and CEO Giovanni Bisignani predicted both Airbus and Boeing will fail to deliver more than half of the aircraft they will produce in 2009.
Bisignani noted that IATA members are struggling to secure financing for their 2009 deliveries in the current environment. His comments are based on what he said were frank conversations with several airline CEOs. “I’m a Catholic priest. I know all the sins but can’t tell,” Bisignani said.
He added a lack of available credit in particular is making it difficult for airlines to secure financing for new aircraft. As for traffic, Bisignani warned that, “the worst is coming in January and February”.