Story ID: 505airbusFboro16.doc
Airbus Seeks to Ease Investor Anxiety
By: Gregory Polek
Caption: Lays out plan to address production, profitability challenges.
Word Count: 379
Airbus executives attempted to allay concerns over production-rate cuts on the A380 and ramp-up challenges associated with the A350 and A320 during an investors meeting held in London Wednesday. Airbus Group CEO Tom Enders said the European company and its partners have “ironed out” most of the problems with the A320neo as it takes the first newly updated Pratt & Whitney PW1100G geared turbofan (GTF) engines this month.

Enders reminded attendees that although Airbus didn’t necessarily expect problems with the airplane, it knew that the biggest risk centered on the engine. He applauded Pratt & Whitney’s “strong commitment” to addressing the extended start intervals on the GTF.

In the military realm, engine problems also continue to plague the A400M, and Enders admitted that they’ve proved “very frustrating,” representing “an operational nightmare.” However, he welcomed the acquisition of Italy’s Avio by GE, and said the U.S. engine company has proved itself completely committed to improving the situation.

Meanwhile, market challenges on the commercial side have prompted Airbus to cut production of the A380 to 12 airplanes a year by 2018 from 27 last year, when it turned a profit on the program for the first time since its introduction in 2000.

Airbus chief executive Fabrice Bregier insisted that he remained “very confident” that the A380 program will continue to break even at the rate of 20, which is what it has planned for next year. However, he acknowledged Airbus’s struggle to sell the airplane and admitted that doing so stands as his top priority. “Eventually it will find its way,” Bregier insisted.

Finally, as seat supply “issues” begin to ease, Airbus has managed to get the A350’s industrial process under control, said Bregier. However, after noting that Airbus delivered only 13 airplanes by July 1, he admitted to the challenge of a “back-loaded” production schedule for the model and a “big jump” to building a total of 50 airplanes by the end of the year. “The progress has not been at the speed I would expect,” said Bregier, who nevertheless expressed confidence that as long as Airbus’s suppliers cooperate as he expects, building another 37 of the airplanes by the end of the year is achievable.