According to one published report, the ongoing consternation for Airbus related to maintaining the production rate of the highly in-demand A320 neo aircraft remains challenging. The European commercial aerospace manufacturer is reportedly currently managing a production scheduling and supply chain support plan that parks upwards of 100 semi-finished aircraft to await completed engines. Needless to state, such an action is unprecedented as well as bold, but could cost Airbus additional millions.

The report, published by Air Transport World Online, cites Airbus’s Commercial Aircraft President as indicating that the manufacturer has “an industrial crisis to manage” and “a rather unique situation” with the company “…trying to communicate with our customers as best we can.”  Airbus A320neo airplane

Readers will recall that the ongoing challenge stems from delays of completed new aircraft engines from neo model suppliers Pratt & Whitney and CFM International. The Airbus executive indicated to ATW that both engine manufacturers are “more or less” sticking to recovery plans for new engine deliveries that they presented at the beginning of the year. It would appear that Airbus has elected to “backload” deliveries of the CFM International LEAP engine powered aircraft into the second-half of 2018. More than likely, the decision relates to having to catch-up with customer delivery commitments of Pratt GTF powered neo aircraft that have lagged in the first-half of the year.

According to the report, rather than further jeopardize this year’s stated full-year A320 neo and total aircraft delivery schedule, the aerospace manufacturer has elected  a “linear” manufacturing schedule that will, in-essence, front-load aircraft production levels at current rates, but schedule a number of customer deliveries toward the second-half of this year. That impact was defined as upwards of 100 aircraft produced and parked, awaiting on-wing installation on specified new engines.

While the parking of mostly completed A320 neo aircraft has occurred in past quarters, the sheer number of 100 parked aircraft at a given time is significant, not to mention the added working-capital inventory expense burden of such a strategy. Picture the sheer runway landscape required for parking such a number of idle aircraft.

Meanwhile, the report emphasizes that Airbus is pushing ahead with plans to boost monthly production rates upwards of 60 aircraft per-month, as well as studying a level of 70 to 75 single-aisle aircraft per-month, despite a described “lukewarm” response from the critical supply network weak link, the two engine manufacturers. Airbus’s Commercial Aircraft President indicated in the report that the 60 level of production would not happen until “the beginning of the next decade” because of added automation needs.

If the report is accurate, it is an indication of a gutsy strategy to maintain customer delivery commitments and to respond to what is likely building pressures from airline and leasing firm customers to make good on delivery commitments of in-demand aircraft. Many new route structures have been planned based on the timely delivery of a new fleet of more modern, fuel-efficient aircraft. Airbus is therefore attempting to make good on commitments to customers and to supply network partners, who expect timely payments for component supply.

 

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