Airbus is projected to reach a new delivery record this year. An order intake to sustain a positive book-to-bill ratio is the strongest signal, yet, that the European commercial aircraft maker has put the global economic crisis firmly behind it.
In reality, 2010 figures, with deliveries of 510 units and 574 net orders (644 gross orders), already showed that after two years of global economic crisis-induced reduction in activity, the commercial airplane market for narrowbodies and widebodies has recovered. But whereas a year ago Airbus and Boeing officials were still cautious about their outlook for market recovery – unable to believe the crisis had passed them by so quickly - last year’s bookings has them looking to 2011 and beyond with an increased sense of optimism.
Airbus CEO Tom Enders notes the company will surpass Boeing in terms of deliveries again this year. Around 520-530 commercial deliveries are planned with more than 20 military aircraft to be handed over. About one third of deliveries will use export credit agency support, about on par with 2010 levels.
The order intake is expected to surpass deliveries, allowing the backlog to grow.
Airbus and Boeing have both been ramping up production rates across their product lines after relatively modest cut backs during the height of the crisis. Airbus is already on course to match pre-crisis plans and, on the narrowbody front, is examining a rate of 44 units a month, a new high for the business.
The backlog, at year-end, stood at 3,552 aircraft valued at around $483.1 billion. Airbus had a strong December order intake, growing its order book by around 200 aircraft, but it also suffered 18 more cancellations.
Given the high backlog, Airbus has a further increase in production rates, particularly for narrowbodies. Around the end of January or early February, the company wants to be in a position to take a decision, although it may not actually increase rates, says Tom Williams, Airbus executive vice president for programs says. The issue under review is what the critical suppliers are and where there might be bottlenecks. What is more, a question is how long such rates could be sustained. “We don’t want to jack the supply chain up, and bring it back down again,” he notes.
On the A380, Enders notes that 2010 was a year of big improvements. “Recurring costs have come down dramatically,” Enders says. Production rates will increase slightly this year beyond two per month, with a goal of reaching three aircraft per month in 2012. “This is still a huge challenge,” he notes, though, in part because there are “more ‘head of versions’ during the year than in the past.”
Airbus is still working through the after-effects of the Rolls-Royce Trent 900 uncontained engine failure on a Qantas A380 last year. Most of the aircraft are now flying again, but some aircraft in the final assembly line still await their powerplants, Williams says. There will be an impact on 2011 deliveries, although the scale will not become clear until May or June, with deliveries likely weighted to the second half of the year. Enders projects around 22-25 aircraft.
Williams notes that the redesigned bearing housing module is now widely installed by operators, reducing their inspection burden associated with the Trent 900.
Airbus COO Fabrice Bregier notes that 2011 will also be a key year for the A350; work on the final assembly line should commence at the end of the year, with nine months planned to build the first aircraft to lead to a 12 month flight testing for service introduction in the second half of 2013. “We are making reasonable good progress,” Bregier says, but adding that “we know it is very challenging.”
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