Story ID: 758 Airbus Commercial update
Airbus Approaches Delivery Crunch
By: Ian Goold
Caption: Airbus faces heavy year-end delivery rate, warns Bregier.
Word Count: 842
Fabrice Bregier, president and CEO of Airbus, has warned that the closing weeks of 2016 will see heavy demands on flight-testing and aircraft-delivery departments if the manufacturer is to meet projected deliveries. He openly concedes that a wait for upgraded engines and a lack of out-sourced parts and equipment have delayed, respectively, single-aisle A320neo and twin-aisle A350 aircraft output.

Airbus (the commercial division of Airbus Group) expects to deliver about 650 airliners this year, despite executives acknowledging a slow start to 2016 because of the delays. Indeed, executives had warned as early as January that A320neo deliveries would be “back-loaded” (that is, earmarked for late-year delivery).

Now, with a clearer picture of aircraft-production and engine-delivery realities, Airbus (Outdoor Exhibit) can see that the closing weeks of 2016 will prove particularly manic for the company, at a time when it also is seeking to increase overall final-assembly rates. Asked if manufacturing issues and production ramp-up plans mean that the company is becoming over-stretched, Bregier replied: “We need to make a judgment. I believe if we have the parts and engines, we will deliver the aircraft.

“We know that December will be awful for people in program management and flight-test.” He pointed out that recent record levels of new aircraft orders cannot be sustained, and that the European manufacturer must concentrate on managing deliveries. Both Bregier and chief operating officer (customers) John Leahy say they will be happy this year to match each aircraft leaving an Airbus delivery center (when final payments are made) with a balancing new order—a so-called “bill-to-book” ratio of one—after several years at higher ratios that have driven the order backlog to more than 6,700 aircraft.

Accordingly, delivering new aircraft is the company’s main preoccupation as the industry meets here at Farnborough International. At least one delayed A320neo was cancelled by Qatar Airways last month, even though Pratt & Whitney (P&W) is delivering its updated PW1130G-JM geared-turbofan (GTF) engines to Airbus.

By mid-June, at least 10 GTFs had been dispatched with the required upgrades incorporated in production, according to P&W, with five more undergoing assembly. (Initial A320neo final-assembly began with 20 original-standard engines that had been subject to an overly time-consuming re-starting procedure that delayed scheduled airport departures.)

Ahead of the resumption of engine deliveries, as many as 25 single-aisle A320 Neos sans moteurs had been parked around the final-assembly buildings at the Toulouse factory (and more in Hamburg). In late May, chief operating officer Tom Williams said that once upgraded GTFs had been received by Airbus, then “very soon” the number of A320 “gliders” would reduce as Neo deliveries resumed.

Slow Supply Chain

Another challenge concerns the stretched A350-1000 variant, which Airbus expects to fly in September. Earlier this year it entered customization, a stage recognized by Williams as “the real cause of the ‘meltdown’ on the A380.” The manufacturer wants to deliver at least 50 A350s in 2016 but cabin-equipment supply problems have meant that only nine had been released to customers by June.

Also last month, China Airlines said that four aircraft scheduled for 2017 delivery from July onwards would arrive late, starting in September, while the first A350 for Thai Airways has slipped from July to August. Deliveries to Cathay Pacific Airways, Qatar Airways and Singapore Airlines are understood to be behind schedule and South America’s largest carrier, Latam Airlines of Brazil, has said it is reviewing orders for the A350 and Boeing 787 because of reduced traffic.

Williams points out that apart from new-aircraft deliveries, other challenges include management of “traveling work”—outstanding tasks to complete sub-assemblies (for example) when they move to the next production stage, often to final assembly in another country—and maintaining relationships with customers, who now are “probably even more demanding than in the past.”

He is encouraged by the “very strong” order backlog and claimed a continuing increase in Airbus “market dominance,” especially in Asia and South America. He also said that the 6 percent annual growth in airline traffic is consistent with the company’s global market forecast. As Airbus works to increase production rates, Williams claimed its manufacturing is becoming “faster, smarter and more innovative,” with step changes in processing times along with new tooling, machines and skills management.

“The latest digital and automation technologies [make] significant differences to how we do things,” according to Williams. He said that A320 production still involves “a lot of paperwork” and provides further opportunities to become more “smart.”

One “big step” involves the introduction of robotics with some manual input, said Williams, who cited the introduction of such technology in a new structural assembly system to be used in a “pulse” line for A320 wing production at Broughton in the UK. New procedures mean that by the beginning of next year Airbus will be enjoying “huge” savings in costs while increasing production to 50 wing sets a month, Williams concluded. o