Airbus Still Struggling to Hit Delivery Targets -- 2nd Update
27 Avril 2017 - 3:55PM
Dow Jones News
By Robert Wall
European plane maker Airbus SE faces another year of scrambling
to meet full-year delivery targets after falling behind in the
first three months because of problems with a key engine
supplier.
Airbus expects to build a record 720 planes this year including
200 of its new A320neo single-aisle jet. But it only delivered 26
of those A320neo airliners in the first three months, fewer than
expected, Chief Financial Officer Harald Wilhelm said Thursday.
A rush to the finish line is nothing new for Airbus, the world's
No. 2 plane maker behind Boeing. The Toulouse, France-based plane
maker was forced to crank out a record number of planes in December
to meet its full-year target after it fell behind earlier. Airbus
was hoping this year would be less of a wild ride, even if it
projected in January most plane deliveries would fall in the second
half.
Pratt & Whitney, a unit of United Technologies Corp., has
had to replace faulty engines, called the geared turbofan, on some
A320neo planes already delivered to airline customers, which has
reduced the number of turbines available for new airliners. United
Technologies Wednesday said 26 of 70 geared turbofans delivered
last quarter were used as spares.
Mr. Wilhelm said it was a "tough quarter" for the Pratt engine
and that the demonstrated performance was "not satisfactory."
Airbus is sticking to its A320neo plane delivery target for now, he
said, but still is awaiting proof from Pratt that the engine issue
will be fixed as promised.
United Technologies Chief Executive Gregory Hayes said fixes to
the engine were either approved or in development and that
additional tests were being performed to identify any other
potential faults early. He acknowledged the reliability issue was
painful for customers. The company stuck to its target of building
350 to 400 geared turbofan engines this year, also for other plane
makers.
JetBlue Airways Corp. this week said it would swap some A321neo
planes due to arrive next year for an older version with a
different engine, calling the move "good contingency planning."
Airbus also gets A320neo engines from a joint venture of General
Electric Co. and France's Safran SA. Each engine supplier is
expected to power about half the planes due for delivery this
year.
French cabin interiors specialist Zodiac Aerospace SA also has
been a longstanding headache for Airbus. The supplier is behind on
building seats and toilets for the Airbus A350 long-range jet. Only
13 A350s made it to customers in the first three months. Airbus is
expected to deliver around 80 such planes this year.
Mr. Wilhelm said the situation was improving even if seat supply
issues remain. Despite slow deliveries of the new A350, Airbus said
it remained on track to start producing 10 of them a month at the
end of 2018.
Airbus and Boeing also are grappling with demand weakness for
some of their long-range planes. American Airlines Group Inc.
Thursday said it pushed back the start of delivery of its A350s
from Airbus to late 2020 from 2018. It also delayed some Boeing 787
Dreamliners. Delta Air Lines Inc. this month said it was reviewing
widebody plans.
Airbus reported a sharp drop in first-quarter profit, hobbled by
delivery of less profitable planes and higher costs on new models
even as its net result benefited from the sale of some defense
activities. The company's closely watched earnings before interest
and taxes stripping out some one-time items fell 52% to EUR240
million ($261.7 million). Airbus delivered 136 planes in the first
three months of 2017, 11 more than a year earlier, but those
included less-profitable versions.
Net profit rose 52%, boosted by a EUR560 million gain from the
divestment of Airbus's defense electronics unit.
Airbus CEO Tom Enders said the company was on track to meet
full-year targets.
Robert Stallard, an analyst at Vertical Research Partners, said
"there is still a lot of work to be done to hit the 2017
targets."
Write to Robert Wall at robert.wall@wsj.com
(END) Dow Jones Newswires
April 27, 2017 09:40 ET (13:40 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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